French government should remember carbon allowances in ArcelorMittal dispute
posted by Damien on 26th Nov 2012
The French industrial minister, Arnaud Montebourg, recently clashed with steelmaker ArcelorMittal over the company's plan to close blast furnaces in its Florange steelworks, putting 629 jobs at stake.
The French government has struggled to find buyers for the furnaces alone, but ArcelorMittal refuses offers for the entire Florange works. The tensions have led to Montebourg accusing ArcelorMittal of "lying", "blackmail" and "never holding to its engagements".
In this context, climate NGO Sandbag notes that the steelmaker has received 20 million spare carbon allowances from the French government over the past four years, with a current value roughly €138 million.  The Florange installation alone has accrued 4.7 million spare carbon allowances over 2008-2011, with a current value of €33 million. This amounts to over €50,000 for each of the workers facing redundancy.
Commenting on the developments, Damien Morris from Sandbag said:
"The carbon allowances awarded to ArcelorMittal by the French government were meant to help fight climate change but since the recession they have been used as a form of corporate welfare, with the company selling off spare allowances to generate income while production has been low. Instead of awarding allowances to ArcelorMittal for reducing its output and laying off staff, the French government might have sold these allowances and invested the revenues in low-carbon projects that could have created new jobs and fought climate change at the same time. As President Hollande prepares to meet with Mr Mittal on Tuesday he should keep in mind the carbon assets the government has conferred on the steelmaker."
Data is from Sandbag and the EU Transaction Log. ArcelorMittal was approached to corroborate this data ahead of Sandbag's ETS report Losing the Lead launched in July 2012, but declined to respond. The carbon price is taken from Blue Next exchange (current as of 23/11/2012)
ArcelorMittal has topped Sandbag's European list of Carbon Fatcat companies benefitting from the EU ETS for three consecutive years