May 19, 2014 / 3:49 PM / in 4 years

Steel firms top carbon permit surplus list for 2013 - analyst

* ArcelorMittal had a 2013 surplus of 10 mln EUAs - report

* Riva Group had surplus of 8 mln

LONDON, May 19 (Reuters) - Three steelmakers had the biggest surplus of free carbon credits in the EU carbon market last year, an analyst report said on Monday, potentially netting the firms tens of millions of euros.

ArcelorMittal chalked up a surplus of 10 million EU Allowances (EUAs) in 2013 while Riva Group, which owns Italy ILVA, had a surplus of 8 million and Tata Steel a surplus of 4.7 million EUAs, said the report by France-based analysts at Carbon Market Data.

The EU Emissions Trading System (ETS) is the bloc’s main policy aimed at cutting emissions of heat-trapping gases and forces over 13,000 power plants, factories and airlines to surrender a permit for every tonne of carbon dioxide (CO2) emitted.

However heavy industry, such as steel plants and cement producers receive a number of free carbon permits each year to reduce the costs of complying with the scheme and to help them compete in global markets.

The report said ArcelorMittal was awarded 61 million free EUAs to cover its emissions in 2013 but only emitted 51 million tonnes of CO2.

Riva Group received 16 million EUAs but emitted just 8 million tonnes of CO2 while Tata Steel received 25.4 million EUAs versus emissions of 20.7 million tonnes of CO2.

Based on average closing prices for front-year EUAs in 2013, if the companies had sold their excess allowances the EU scheme could have netted ArcelorMittal around 45 million euros ($62 million), Riva Group 36 million euros and Tata Steel around 21 million euros in 2013.

ArcelorMittal said many estimates of the industry’s EUA surplus have been wrong, because the forecasts don’t take into account that steel mills have to earmark most of their free allowances to cover waste gas emissions from captive power plants.

Tata Steel did not immediately respond to request for comment and Riva Group could not be reached for comment.

Environmental groups have long criticised steel makers for lobbying against environmental regulations, despite benefitting financially from the EU carbon market.

Carbon Market Data compiles publicly available figures for installations in the EU carbon registry by corporate ownership.

$1 = 0.7297 Euros Reporting by Susanna Twidale; Editing by Mark Potter

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