The companies profiting through Europe's flagship climate policy
Europe controls half of its carbon emissions through the EU Emissions Trading System (ETS). It's one of the world's biggest policies aimed at promoting a low-carbon, clean energy future. Unfortunately, the environmental limits the ETS was supposed to provide have been compromised by the recession and overallocation – some of Europe's biggest polluters have been handed millions more carbon allowances than they need - for free.
Carbon Fat Cats 2012 finds that:
the top ten Fat Cats are all Iron & Steel and Cement companies
between 2008-2011 they accumulated 304 million tonnes of surplus allowances1,
almost enough to cover the annual emissions of Spain.2
We estimate these companies could have made as much as €3.8 billion3 from selling their surplus allowances, more than four times Europe’s environment budget over the period.
We have confirmed revenues of at least €1.8 billion4. Any unsold allowances can be used to buffer these companies against their environmental obligations for many years into the future.
In spite of this, these companies are prominent members of trade associations that are actively lobbying to undermine reforms that would increase the environmental ambition of the ETS and Europe.
Europe cannot let a small group of entrenched industries derail its chance of a prosperous, low-carbon future.
1 After consulting with companies on allowances transferred alongside process gases
2 Spain’s economy-wide emissions were were 369Mt in 2009 excluding LULUCF. See data viewer at unfccc.int
3 Based on the average EUA spot price in each year surpluses were generated. Prices taken from http://www.bluenext.eu. EUA/offset swaps also included.
4 From the ten companies Annual Reports over 2008-11