01 April 2011

EU Emissions Trading 2010: analysis of newly released figures

Once again, the EU Emissions Trading Scheme has awarded massive subsidies to the steel sector and other energy-intensive industries. It has even given out permits to pollute to factories that are partially closed. This has nothing to do with addressing climate change. Emissions trading is being used as an industrial subsidy scheme for polluters....

A provisional analysis of EU greenhouse gas emissions data for industries covered by the Emissions Trading System (ETS) shows that emissions rose by over 3.5 per cent in 2010, compared to 2009 levels.1

For a fifth time out of the last six years, the “cap” that the ETS is supposed to imposed was set too high. Complete data is only available for 8,833 installations (77 per cent of the total), but this shows that the allocation of permits under the scheme was 3.2 per cent (57.36 MtCO2e) higher than the actual emissions measured from installations covered by it.

These figures make a mockery of the claim that emissions trading reduces emissions. Factories polluted more, and the scheme set no limit on this additional pollution.

The 10 plants with the largest surplus of permits are all from the steel sector, and account for a combined surplus of 54.7 million permits. These 10 plants alone have received a a windfall profit of around €650 million. 2

The plant with the third largest surplus (Teeside steelworks in the UK, which was sold by Tata to Sahaviriya Steel Industries, Thailand's largest producer, in February 2011) has been partially mothballed, yet still managed to accrue a surplus of 5.76 million permits. This amounts to a windfall profit of around €70 million.

The breakdown (in sequence) of the most significantly over-allocated plants is as follows:

Allocation Actual Surplus Owner
19622025 8695288 10926737 ThyssenKrupp Steelworks, Duisburg, Germany
11335573 4583475 6752098 ArcelorMittal Galati, Romania
6953226 1188865 5764361 Tata, Teeside, UK (since sold)
11557631 6227169 5330462 Tata, Ijmuiden, Netherlands
9276102 4011551 5264551 Glocke Salzgitter, Salzgitter, Germany
13255657 8606105 4649552 ILVA (Riva Group), Taranto, Italy
8918495 4386583 4531912 ArcelorMittal, Gent, Belgium
9323815 5291346 4032469 ArcelorMittal, Gijon and Aviles, Spain
8655981 4771369 3884612 Krupp Mannesmann, Duisburg, Germany
5832055 2245809 3586246 ArcelorMittal Bremen, Germany


1This is based on data from 9579 installations, which account for 83.9 per cent of the total. The rest are excluded because data is not available yet. It is based on a total of 11409 installations (a figure that excludes the “closed” accounts which are listed in the EU database).

2These figures for the steel sector assume a €13 per ton price of carbon permits (EUAs), and incorporate a 10 per cent downward adjustment to take account of permit transfers relating to waste gases.

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