The European Union (EU) has been criticised by the head of
the Financial Services Authority for allowing billions of pounds to be given to
manufacturers through windfall profits made from the Emission Trading Scheme
In a study – the Carbon
Leakage Report – by research outfit Climate Strategies, found some
industries could make £18bn over the coming years without having to reduce their
emissions if they receive more emissions allowances than they use and sell the
“We can’t solve the problem by giving out emission allowances for free,” FSA
chairman Adair Turner told The Daily Telegraph, following the
publication of the report.
The ETS, introduced in 2005, includes the heaviest emitters in the European
Union – generally in manufacturing – and allocates allowance emissions to an
organisation. The company can then buy and sell surplus allowances with other
companies in the ETS.
The research also finds cases of companies moving its production outside the
EU and continuing to sell its products within it. The FSA’s Turner called for a
“border-levelling duty to prevent this from happening in the future”.
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