How Corus could cash in on closure

Dec 13 2009 by Phil Doherty, Sunday Sun

TROUBLED steel maker Corus has green allowances worth millions of pounds despite mothballing its Teesside plant and throwing hundreds on the dole.

The firm, owned by giant Indian steel company Tata, has £6.9m worth of emission allowances - permits that enable a company to emit CO² - from the Teesside Cast Products (TCP) plant at Redcar.

The "carbon trading permits" were issued to let the company stay in business despite climate change worries.

Now it’s feared it could sell them on, making the plant less attractive to potential buyers and increasing the prospect that it will close permanently.

Corus could now potentially make a huge profit – up to £56.6m – by selling on the emissions allowances.

However, there is no suggestion any cash it makes would go to the former workforce.

Vera Baird, MP for Redcar, said: "If the TCP plant were to be mothballed at the end of January it would potentially benefit from the sale of its unused allowance.

"At the current carbon price of € £12 per tonne, and based upon Tata Corus’ average emission of 1.8 tonnes of CO² per tonne of steel produced, it has been estimated that Tata Corus could make up to £56 million by selling its emissions allowances.

"If Tata Corus stands to gain this huge financial benefit it is difficult to see how mothballing at TCP would not lead ultimately to full closure.

"It is my intention to fight the mothballing of TCP and all the more so to campaign against any closure.

"Any potential purchaser of the TCP plant will, of course, look more favourably on a deal that includes a full emissions allowance than on one which would require it to purchase new allowances elsewhere.