GOVERNMENT MUST INTERVENE ON STEEL WINDFALL PROFIT, SAY LIB DEMS (Bishop Auckland Liberal Democrats)

Bishop Auckland Liberal Democrats <mark@bishoplibdems.org.uk>

GOVERNMENT MUST INTERVENE ON STEEL WINDFALL PROFIT, SAY LIB DEMS

December 10, 2009 12:00 AM
Originally published by Fiona Hall MEP

Fiona and Ian Swales in front of the Corus plant in Redcar

Labour ministers must act immediately to halt profiteering by Corus owners Tata Steel, says Redcar Lib Dem parliamentary spokesman Ian Swales.

Tata Steel is taking advantage of a loophole in EU Emissions trading legislation which will enable the company to hold onto - and sell - its carbon allowances even though the Corus plant will not actually be producing steel after its announced mothballing in January.

The steel industry has a generous free allocation of carbon allowances until 2012. Even in 2008, Corus did not use its full allocation (2008 allowance 6,953,226 tonnes of CO2, 2008 emissions 6,222,710 tonnes CO2). After the plant is mothballed, none of the allocation will be used, allowing Tata to sell the allowances on the open market and bag a windfall profit of an estimated £250m over the next three years.

Explained North East Lib Dem MEP Fiona Hall:

"Lib Dem MEPs have fought throughout for a rigorous and tight Emissions Trading Scheme. But UK Labour Ministers along with other European governments preferred to allow a loose scheme full of loopholes.

"Because it is mothballing the Teesside plant instead of closing it down completely, Tata is able to keep its carbon allowances and sell them for 100% profit."

Ian Swales said:

"The Government must intervene immediately to stop this immoral free-riding.

"Tata is making a huge windfall profit. The Government should impose a windfall tax on the company, ear-marked for investment in new jobs on Teesside.

"As for Tata, it should choose to use this windfall to invest in Corus, reversing the years of neglect which have undermined the viability of steel on Teesside."