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The European commission has quietly put a figure on the vast windfall that some of the most polluting corporations in Europe will get, courtesy of the badly thought out European Union emissions trading system (ETS).

And what a windfall it is! Steel firms, petrochemical companies, cement makers and the like are in line to share up to £10.5 billion as they cash in unused carbon credits given to them for free.

The ETS was trumpeted as a clever way to cut greenhouse-gas emissions but there were two crucial flaws.

First, governments were allowed to hand out carbon credits to their favourite industries, leading to massive over allocations to big polluters that threatened to re-locate if they didn’t get huge surpluses.

Second, those polluters can carry the unused allowances from the current phase of  the ETS (2008-2012) to the next (2013-2020).The commission now admits that because of the over allocation, combined with the sudden drop in emissions caused by the recession, up to 8% of the free 2009-2012 allowances could be carried over.

This would 765.5 million allowances which presently retail at £13 a throw.One big winner would be the French cement firm Lafarge, whose UK plants, whilst shedding jobs, stacked up a 1.4 million surplus in 2008 alone (worth 18.2 million at current prices).

But this pales besides Lakshmi Mittal . His Arcelor Mittal empire gained 4 million allowances (or £52 million) in 2008 even before the recession started to bite.The commission is now putting out arguments about increasing the EU’s emission reduction targets up to 2020.

All well and good, but should this happen, demand for carbon allowances will rise, meaning the windfall for the biggest polluters will double.

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