ArcelorMittal says new EU plans for CO2 permits pose business threat

Thu Nov 10, 2016 1:01pm EST
 
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By Tom Käckenhoff

DUESSELDORF, Germany (Reuters) - ArcelorMittal <ISPA.AS sees EU plans to scrap some free carbon permits for energy-intensive industries as a threat to its European business, a senior executive at the world's biggest steelmaker told Reuters on Thursday.

In April, Europe's highest court ruled that such industries had received too many carbon permits under the European Union's Emissions Trading System (ETS), which charges power plants and factories for every tonne of carbon dioxide (CO2) they emit.

It also said the European Commission's calculation for handing out the free permits was flawed and gave the EU executive 10 months to review the policy.

"This scenario is threatening the existence of plants in Germany, but also across Europe," Frank Schulz, the chief executive of ArcelorMittal's German unit told Reuters in an interview.

The permits are part of EU policy to limit greenhouse gas emissions and keep global warming to an internationally agreed target.

Under the new system, steel makers would receive a sharply reduced number of permits from 2021 to 2030, forcing them to purchase the required licences.

"Experts calculate that this would leave the industry with additional costs of ten to 30 euros ($33) per tonne of steel," Schulz said.

Average earnings before interest, taxes, depreciation and amortization (EBITDA) were 35 to 40 euros per tonne last year, Schulz added.   Continued...

 
Workers stand near the logo of ArcelorMittal, the world's largest producer of steel, at the steel plant in Ghent, Belgium, July 7, 2016. REUTERS/Francois Lenoir