Belgium to buy EUAs in market for Arcelor
The Belgian government will buy carbon credits in the market to give to ArcelorMittal, in return for the steelmaker keeping a furnace running in the city of Liège.
A source from the regional Walloon government revealed to ICIS Heren on Thursday that Belgian authorities have pledged to buy 13m EU allowances (EUAs) and certified emission reductions (CERs) on behalf of ArcelorMittal over the next three years.
The agreement will come as a blow to the Walloon environment ministry, which had earlier attempted to claw back EUAs allocated to ArcelorMittal for two furnaces at its Liège site, idled since November 2008 and May 2009 respectively.
Belgium has not yet appointed an agent to buy the EUAs and CERs, the source said. However, an agreement is already in place that splits the outlay between the Walloon and the federal governments. The split could be determined by the price difference between EUAs and CERs in the market.
The carbon credits were not allocated to ArcelorMittal under the regular national allocation plan (NAP), but were promised to the steelmaker after it threatened to close down the Liège site.
The original plan was to allocate the credits from the Walloon new entrant reserve, before the government decided to source them from the market instead.
ArcelorMittal has still not received any of the 5.45m EUAs pledged for the 2008-2010 period, a spokesman for the Walloon government said. There is no timeframe yet for when this will happen.
"It is too early to say .... We need to hold some more meetings with ArcelorMittal," the spokesman said.
The Walloon government has won one concession from ArcelorMittal in return for the EUA allocation. The steelmaker has promised to make heavy investments into upgrading technology at the Liège sites.
"This will keep [the company] in Belgium - it will be cheaper to remain here than undertake the same investments somewhere else," the spokesman said.
ArcelorMittal posted a surplus of 20.8m EUAs in 2008, according to verified emissions data, and is likely to have even more allowances left over after 2009 compliance, having run plants at record-low rates. IS
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