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Steelmills likely to fight CO2 allocation terms in court - Eurofer

08 Jun 2012 17:31:29 | edcm

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Europe's steel companies are being urged by their representative body to challenge the terms of their allocations of carbon allowances in court, in a bid to receive more of the free permits during phase III of the EU's emissions trading system (ETS), which will run from 2013-2020.

Trade body Eurofer wrote to its members in March and again on Thursday to tell them that steel companies must take on such court cases at national level before the rules on phase III free allocations of carbon allowances can be challenged in the European Court of Justice (ECJ).

If the steel industry wins such a case in the ECJ in the next few years, it could be eligible to receive free allowances retroactively to early 2013, Eurofer's environment director, Danny Croon, said on Friday.

Legal battle setback

Eurofer's advice came one day after it learnt that a case it had taken directly to the ECJ against the European Commission's rules on free allocations to steel mills had been thrown out.

The ECJ sent Eurofer a fax on Thursday saying its case was inadmissible because no court had made a judgement on the matter at national level, Croon said.

But he said the ECJ had not made a judgement in relation to the European Commission rule in question, which relates to the inclusion or exclusion of recycled waste gases in the efficiency benchmark against which steel mills will be judged when applying for free allowances.

"I would say the case is definitely not lost if our national industries are going to submit court cases, which I believe they will do because it costs too much not to do so," Croon said.

"So I believe they will do so, but of course the thing is, it will take some time before any decision will be taken on that and, if the case is successful, the steel industry may be compensated retroactively."

A parallel case was taken to the ECJ by steelmakers ThyssenKrupp and Voestalpine, neither of which was available for comment on Friday.

The steel sector already stands to enter phase III of the ETS with a massive surplus of EU carbon allowances, having been allocated far more free allowances than it has actually used during phase II, which ends this year.

The sector has accumulated at least 269m surplus allowances since phase II began in 2008 (see EDCM 13 April 2012). VF

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