Saturday, 04 February 2012
Highway robbery in broad daylight!
28 May 2010
Corporate greediness exposedDuring the last week, two interesting reports have been released that paint a harrowing picture of how Europe’s manufacturing industry is profiting from the current climate regime in the EU.
A new report by Sandbag, an NGO expert in EU Emissions Trading Scheme (EU ETS) data, estimates that the European manufacturing industry under the EU ETS will hoard up to 18 Billion EUROs worth of surplus allowances during the trading period 2008-2012. These are, in fact, allowances that they received from EU governments for free. Sandbag also states that this surplus, which can be used until 2020 and beyond, will lead to no domestic emission reductions in the EU until 2017 at least. Ten of the EU's most polluting firms, including ArcelorMittal, Lafarge, CEZ and CEMEX, will have surplus carbon dioxide (CO2) allowances worth over €3 billion after 2012. With these assets in play, those sectors would certainly be able to absorb the move to a higher reduction target, such as the 30% target presented by the European Commission this week. Another study released by Dutch institute CE Delft provides further evidence that energy-intensive industries have made profits from free carbon allowances delivered to them under the EU ETS.
According to the study there is "significant" evidence these sectors have passed on the cost of allowances they have received for free since 2005. This activity may have generated additional windfall profits up to €14 billion for the refining and iron and steel sectors through 2008. These multi-billion EURO windfalls come in addition to the surplus profits from excess allowances as mentioned above. The study clearly dismisses the argument that energy-intensive industries cannot pass the cost of allowances on to the consumers.
To summarize: right now Europe’s emission reduction flagship programme, the EU ETS, will not lead to domestic emission reductions within the next 7 years (at least). At the same time it is generating tens of billions in windfall profits for the manufacturing industries. In addition, some of these windfalls are paid for by European consumers.
CAN-Europe finds it hard to believe that European policy makers will not act and do their utmost to intervene in the EU ETS and make it really reduce emissions while at the same time pulling some wagons off the corporate gravy-train.
