Redcar MP's fears over £100m credits for Corus plant

Jan 14 2010 by Peter McCusker, The Journal

CONCERNS have been raised over the future of the £100m worth of carbon credits which steelmaker Corus is set to receive despite planning to mothball its plant site on Teesside.

Redcar MP Vera Baird has written to Corus asking it to hold on to its Carbon Emission Trading (CET) allowances, or carbon credits, in relation to the Teesside Cast Products (TCP) plant in Redcar to maintain its attractiveness to potential buyers.

Each year the plant gets around seven million free CETs from the European Union, which at the current price of around £15 per tonne of carbon equates to more than £100m for this year.

And Corus recently learnt that under EU rules it will be the owner of the credits for this year, despite planning to mothball the plant with the loss of 1,600 jobs in the coming weeks.

Ms Baird has now written to Corus CEO Kirby Adams asking him not to trade this year’s credits.

She said: “I am determined that Corus should put its plans on paper so that local people can be quite certain that the carbon credits will remain with the plant in case any future buyer wants to acquire them.

“They should not be traded, since that is to take the risk that a would-be buyer will be put off the deal.”

Late last year Ms Baird wrote to Mr Adams asking him to quash rumours that Corus owner Tata’s decision to mothball the plant was related to its potential to gain potentially £300m in three years’ carbon credits.

Ms Baird added: “I received a reply from his assistant, Shaun Doherty, on January 11. Although Mr Doherty denied that financial gain through allowance trading was a motivating factor he did not answer the main point of my letter on the commitment to keep the TCP allowance.”

Corus said the company could not comment on its plans for this year’s carbon credits as it was commercially sensitive information.

A Corus statement said: “Any allegation that Corus has been motivated by the desire to profit from the mothballing via the EU Emission Trading Scheme, or any other emissions trading mechanism, is totally without foundation.

“It insults the efforts of all those who have spent the past eight months desperately searching for a long-term viable future for the plant.”