Companies have been slammed by environmental campaigners for making millions of pounds by exploiting a loophole in the UK’s carbon emission trading scheme.
According to Greenpeace Unearthed, companies are able to shut down plants to reduce emissions but still hold on to free carbon credits, originally allocated by the UK government.
These are allocated to prevent emitting companies from being at a disadvantage against those based in less-strict countries, with credits used to offset emissions.
However, by simply closing plants, firms can be left with hundreds of thousands of unused carbon credits, which they can then sell on themselves.
Greenpeace highlighted US firm CF Industries, which shut down its Cheshire fertiliser plant midway through last year due to high energy costs, prompting job losses.
This left the company with hundreds of thousands of unused credits, given the site’s hefty reduction in emissions, worth tens of millions of pounds.
According to its latest accounts, CF Industries has made £32 million through trading credits in the UK, Greenpeace added.
The environmental group also laid the spotlight on Mitsubishi, which shut a chemical plant in Billingham Teeside in May last year.
Again, this prompted a massive drop in the site’s emissions, leaving Mitsubishi with credits worth around £12.1 million, Greenpeace said.
Calls have been made for the government to address the loophole and reform the scheme as a result of the research.
“Turning carbon emissions into a commodity for trade has never been about what’s best for the planet or for people, but what’s best for financial markets,” Leo Murray, co-founder of advocacy group, commented.
"It is no surprise to find that companies are being richly rewarded under the UK’s scheme for closing factories and sacking workers, chalking this up as somehow about the net zero target, even while in the real world no meaningful progress on industrial decarbonisation has been made."