Big industrial companies in Europe are earning billions of euros selling their free ‘pollution rights’ to other companies, according to environmental research group CE Delft.
The research, carried out on behalf of British NGO Carbon Market Watch, found European companies earned at least €24bn between 2008 and 2014 from trading emission rights.
The rights – which essentially allowed companies to emit a certain volume of carbon dioxide – were allocated to some companies free of charge as part of European efforts to reduce pollution.
They were mainly given to companies in the oil, steel, cement and petrochemicals industries who argued that EU restrictions on carbon dioxide emissions would have an unfair impact on their businesses.
The report shows energy-intensive companies in the Netherlands made over €1bn from the EU emission tradings system during the period 2008-2014. Tata Steel (over €300m), Shell (over €200m) and industrial estate Chemelot (€90m) were the biggest earners.
The report says the Dutch government gave out 533 million free pollution permits and so missed out on at least €6.4bn in revenue from auctioning off those rights. Over the same period, it earned just €265m from auctioning pollution allowances.
Among its key proposals for overhauling the emission tradings system, CE Delft says free permits have to be phased out.
Environment minister Sharon Dijksma told the Volkskrant that the way free emission rights are currently issued must be changed. ‘Companies which are playing around with their rights and earning money on them without using cleaner production processes are turning the world upside down,’ she said.
Tata Steel, which owns the massive steelworks in Eindhoven, told the paper the findings do not take into account the fact it has to compete with steel firms in China where emissions trading is unknown.
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