Three major UK manufacturers have allegedly been granted substantial quantities of unused carbon emission allowances for factories that were either idled or reducing production.
According to the Financial Times, the government allocated nearly £46 million worth of surplus carbon credits to CF Fertilisers and INEOS for sites that they subsequently permanently closed.
Additionally, Liberty Steel received surplus emissions allowances for a Welsh steel mill that was temporarily halted this year.
These findings, based on government data, have prompted questions about how the UK administers its carbon market.
In the UK, large manufacturers receive carbon credits on a per-site basis to offset their emissions.
These awards are determined based on production levels over the preceding two years, allowing idled factories to accumulate excess allowances.
Although the Emissions Trading System scheme is designed to offer flexibility for companies to adjust production levels, there is no mechanism to reclaim surplus allowances if a site remains inactive or is permanently closed.
CF Fertilisers did not respond to requests for comment.
INEOS affirmed that it had “fully complied with the rules and reporting requirements of the UK ETS scheme.”
Liberty Steel’s parent company, GFG Alliance, declined to comment on the matter.
The Department for Energy Security and Net Zero has indicated that it is reassessing the allocation of free allowances to enhance its robustness.
