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

Notes

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.