NZ Steel pockets nearly $10 million in free carbon credits

October 1, 2011

Media release

Carbon News: NZ Steel pockets nearly $10 million in free carbon credits

New Zealand Steel was given nearly 500,000 free carbon credits last year - worth nearly $10 million – to cushion it from the impact of a price on carbon,

And, with a bit of trading, it could potentially earn itself $250,000 off this year’s allocation, according to the country's specialist carbon market intelligence service, Carbon News (www.carbonnnews.co.nz).

Details of last year’s allocation of free credits to trade-exposed industrial emitters (based on production levels), were published without fanfare last week on the Government’s climate change website.

New Zealand Steel was by far the biggest beneficiary of the allocation, receiving 494,704 New Zealand emission units (NZUs). Other significant allocations were:

New Zealand Aluminium Smelters 201,421
Methanex New Zealand 143,074
Fletcher Concrete and Infrastructure 122,925
Norske Skog Tasman 122,826
Ballance Agri-Nutrients 93,275
Panpac 60,593
Winstone Pulp International 42,254
Carter Holt Harvey Pulp and Paper total allocations of 139,458

At today’s price of $14.50, New Zealand Steel’s credits would be worth $7.2 million, but at last year’s price of $20 they would have been worth nearly $10 million, Carbon News says.

And with a similar allocation this year, the company could pocket $250,000 by swapping out the allocated NZUs for CERs, which are currently trading 50 cents below NZUs and can be surrendered into the New Zealand ETS.

Carbon News understands that some industrial emitters have traded allocated NZUs.

Ends

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