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Corus in £250m carbon credits wrangle

Feb 25 2010 by Peter McCusker, The Journal

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STEELMAKER Corus looks set to receive at least £250m in carbon credits over the next three years - despite mothballing its Teesside steel plant.

The future of these credits for its Redcar steelmaking complex is likely to play a key part in ongoing negotiations between the company and three prospective purchases.

Corus confirmed last night that it will bank this year’s credits for use by a prospective purchaser, with the likelihood they will also be passed on in the succeeding two years if the plant is sold.

If the plant is not sold then the credits for the three years are likely to stay with Corus, as CO2-emitting activity will continue at the site from the two coke plants and the power station.

Last night the Community Union called on the Environment Agency to hold in trust the carbon credits until such a time as steel making is resumed.

Meanwhile, talks between Corus and three potential purchases are continuing as the mothballing of the plant gets under way and the 1,600 staff enter the redundancy process.

The Teesside Cast Products site at Redcar, which consists of the steelworks including the blast furnace, two coke plants and a power station, receives seven million carbon credits each year under the EU Carbon Emission Trading (CET) allowance system.

When Corus announced the mothballing of the plant it revealed it was able to keep the carbon credits for 2010, but said it was unsure about those for 2011 and 2012.

However it now appears they will still receive the allocation as a result of CO2 emissions from the two coke plants and the power station.

A spokesperson for the Environment Agency said: “We have to follow the legally binding rules under the EU Emissions Trading System (ETS).

“In this instance, it is not clear that all the ETS activities at the Corus Teesside plant have closed. While ETS activities continue at the site, it is likely that Corus will retain its free allocation and no allowances will return to the Government.”