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Italian government to step in on steel major ILVA impasse

29 Nov 2012 12:38:58 | edcm

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The Italian government on Friday will try to solve an impasse affecting the country's largest steelmaker, ILVA, after a judge ordered the precautionary seizure of a second part of the group's main Taranto plant - Italy's largest carbon emitter - as part of a preliminary inquiry into its pollution. If the site is shut down, the company could sell the plant's surplus emissions allowances.

Following the order - which also resulted in seven arrests - the company closed down the "cold" part of its southern Italy plant. According to the country's Phase III national implementation measures (NIMs) plan, the site is due to receive 15.5m EU allowances (EUAs) annually for the period 2013-2020, which now appear in doubt (see EDCM 31 July 2012).

The "hot" part of the plant has been under precautionary seizure since July as part of the inquiry a measure that the company has appealed - but operations continue.

"[The closure of the 'cold' part] will lead to the immediate and irreversible impossibility of commercialising our products and, subsequently, the suspension of all operations and the closure of the Taranto plant and of all the other plant of the group depending on it for their supply," said the company. It has always denied that emissions from the plant led to higher mortality in the area.

The move sparked panic in Italy, as metal unions jointly warned that the closure would led to at least 5,000 redundancies, with further thousands possibly following because of a cascade effect on the plants depending on the Taranto facility for supply.

"[Metal unions] Fim, Fiom and Uilm are convinced that the situation which is emerging for the group is very serious and needs a clear and immediate answer from the government," the unions said in a statement this week.

They will meet the government on Thursday together with representatives from the company and local authorities.

"We expect the government to show us the draft of an urgent decree on Thursday which could overcome the impasse and enable production to restart in line with the environmental go-ahead gained earlier this year," a union source told ICIS.

He was referring to the so-called AIA authorisation, which the Taranto plant received in October by the environment ministry a measure also containing some necessary steps to be put in place to clean up the area.

The cabinet is to discuss a possible urgent decree on Friday, a government source told ICIS.

The European Commission still has to confirm the final number of approved EUAs in member states' NIMs. Industrials that are pressured by the current difficult economic climate, and which might have a surplus that they can carry over from Phase II to Phase III, could sell any excess allowances on the market, which could put more bearish pressure on already low carbon prices. SM

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