ArcelorMittal may gain 1 b pounds on carbon credits

LONDON: Arcelormittal, the steel giant headed by Indian billionaire Lakshmi Mittal, stands to gain around 1 billion pounds from a European scheme aimed at curbing global warming, a newspaper reported on Sunday. ArcelorMittal, the world’s largest steelmaker of which Mittal is chairman and main owner, will make the gain on ‘carbon credits’ that are given to companies under the European Union Emissions Trading Scheme (ETS).

The ETC grants European-based companies ‘permits’ to emit carbon dioxide, which is among greenhouse gases that cause climate change, up to a specified limit. Companies are also allowed to buy and sell unused permits on the open market. ArcelorMittal could make at least 1 billion pounds by 2012 by selling its unused permits, the Sunday Times reported, quoting an investigation by a campaigning NGO.

The eventual value could be much greater than 1 billion pounds, as the European Union wants to drive the price of each carbon permit from the current 12.70 pounds to above 30 pounds, according to ETS specialist Anna Pearson of Sandbag.

“Between 2008 and 2012 ArcelorMittal stands to gain assets worth 1 billion pounds at today’s prices for scant effort. For them, the ETS has been turned into a system for generating free subsidies,” said Pearson, who analysed the Community Independent Transaction Log for carbon permits issued to European factories and power stations.

“Following intense lobbying and claims that the scheme would harm business, the cap on emissions was set too high and too many permits were issued,” said Pearson.