July 16, 2010
This story about Chinese firms cashing in on the EU carbon trade was published by EurActiv on 16th July 2010.
European industries as subsidising direct competitors in China and India by buying international credits to offset their carbon dioxide emissions, an NGO said in a new report.
EU companies spent around €860 million last year buying 78 million international offset credits (CERs) in order to meet their emission caps under the EU’s cap-and-trade scheme.
The credits, issued under the UN’s Clean Development Mechanism (CDM), are designed to allow companies to meet their targets more cost-effectively by financing projects that reduce greenhouse gas emissions in developing countries.
An analysis of UN and EU data on credits bought in the EU last year by green NGO Sandbag showed that steel companies in China and India were benefiting directly from money flowing from European competitors.
German steel company Salzgitter’s ‘Glock Salzgitter’ plant, for instance, bought 40,000 credits from an Indian steel project, the NGO said. The company offset 99.5% of its emissions with CERs, escaping the need to improve domestically, it added.
Indeed, over two million steel CERs worth some €22 million were surrendered by EU companies in 2009, according to Sandbag. The NGO argues that this contradicts the European steel industry’s vocal lobbying against tight emissions caps, which they claim would put them at a competitive disadvantage and force them to relocate abroad.
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