Ireland's top three cement firms secure €128m in carbon credit bonanza
Three Irish cement companies have secured an estimated €128m profit windfall from the sale of surplus carbon credits.
CRH, Lagan Cement and Quinn Cement have netted massive cash piles from an EU emissions 'cap-and-trade' scheme aimed at reducing industrial greenhouse gas emissions, a new study claims.
Research into the EU's controversial emissions trading system (EU ETS) has revealed that, from 2008 to 2014, CRH received some €95m, Quinn netted €21m and Lagan secured €11m in profits from selling over-allocated carbon credits granted by the Irish Government.
The three largest players in Ireland's cement industry benefited from an over-allocation under a 2008 National Allocation Plan over a six-year period.
The plan, drawn up by the Environmental Protection Agency, was based on a forecast that predicted demand for cement would soar by 30pc between 2007 and 2012.
But the collapse of the construction boom in Ireland saw production fall by more than 60pc. This resulted in an industry-wide glut of 'free' carbon credits on the market, which has led to 27pc of Ireland's allocated allowances being used to generate profits, according to the study by CE Delft, a Netherlands-based environmental consultancy, for Carbon Market Watch.
Over-allocation was highest in the cement sector, which takes more than 40pc of Irish EU ETS credits.
The EU emissions trading system is a cornerstone of Europe's policy to combat climate change. It is the biggest international system for trading greenhouse gas emission allowances, covering more than 11,000 power stations and industrial plants in 31 countries, as well as airlines. But the European Commission is coming under pressure to reform the scheme.
A case in point is that Irish cement firms made huge profits from carbon credit trading at a time of lower productivity while greenhouse gas emissions from Ireland's cement sector actually rose by 31pc in 2014, according to the EPA.
"This industry-wide increase was largely due to increased emissions from the cement sector and reflects increased production due to a rising demand for cement," said the EPA.
Donal O'Riain, founder of Ecocem, Ireland's manufacturer of low-carbon green cement, said: "The Irish cement industry makes massive wind-fall profits and ignores most potential to reduce its pollution, all this under an ETS scheme that is supposed to impose an economic incentive to reduce emissions from cement manufacturers. The EU bears a lot of this responsibility, while the Irish cement industry, keeping its head down and quietly pocketing from continuing to pollute, is hardly the best example of corporate responsibility."
Industry group Cement Manufacturers Ireland (CMI) said it has "taken note" of the study. The CMI said: "It would not be appropriate for CMI as a trade body to make any comment regarding purported financial data related to individual members. However it is appropriate to point out that the allocations to installations and verified emissions are a matter of historical record."
A spokesman added: "CMI member companies have invested over €300m in lower carbon production technology in recent years and continue to invest in reducing the carbon footprint of its production processes and products."
Sunday Indo Business