Corus in £250m carbon credits wrangle

Feb 25 2010 by Peter McCusker, The Journal

A spokesman for Corus said: “As Corus has already made clear in written evidence to the North East Regional Select Committee, EU emissions’ trading rules provide for the regulator to reduce allocations if they consider a site has closed and will not reopen, but this only happens in the year following closure.

“Corus’s ability to retain TCP’s 2011 and 2012 credits for its iron and steelmaking operations, therefore, is in the hands of the regulator and is for the present not resolved.”

A spokesperson for the Department of Environment and Climate Change said: “Because some activities covered under the Emission Trading Scheme will continue at the Corus Teesside site, EU ETS rules state that the plant will retain its free allocation for 2010. Future allocations will depend on the extent to which the site has closed all of its operations covered by the EU ETS.

“To tackle this kind of issue in future, the Government has successfully argued that from 2013, for companies which continue to receive free allowances, allocations will be reduced to installations when they partially close.”

Community Union general secretary, Michael Leahy said: “I have written to the Environment Agency asking for the carbon credits for Teesside to be held in trust until the resumption of production on Teesside.

“Tata Corus could also demonstrate their intention to stand by Teesside by placing any allocation related to Teesside steel making in the hands of the Environment Agency.

“This would be a responsible act that could reassure the Teesside community.”

WHAT’S THE DEAL?
Companies whose factories emit carbon dioxide are given carbon credits by the EU under the Carbon Emission Trading (CET) allowance system. Rules governing their current allocation are set out in Emissions Trading System (ETS) which cover the period 2008-2012. These credits can be traded on Carbon Exchanges. The price of carbon has slumped to 10 euros (£8.85) a tonne from around 30 euros eight months ago.