Oxfam calls on dirty industries to clean up their act and stop sabotaging the EU’s fight against climate change

Dirty industries are blocking the European Union from making more ambitious cuts to its greenhouse gas emissions while, at the same time, making millions in profits from existing environment policy, says a new report by international agency Oxfam.

With less than a week to go before the start of crucial UN climate change talks in Cancun, the new report, Crying Wolf: Industry Lobbying and Climate Change in Europe, says groups representing carbon-intensive sectors such as cement, steel and chemical production are lobbying against the EU sharpening its emissions cuts from 20 per cent to 30 per cent below 1990 levels by 2020.

Report author Jodie Thorpe says: “These industries are scare-mongering and greedy. Their lobbying will contribute to the worsening impact that climate change is having on millions of the poorest people in the world - who are least responsible for causing the problem.

“At the same time, the industries appear blind to the huge economic benefits of moving towards a low-carbon economy.”

Many carbon-intensive European companies - including the world’s largest private steel company, ArcelorMittal - are massively benefiting from existing climate policy, notably the EU Emissions Trading Scheme (ETS). The 10 largest beneficiaries from the ETS can expect to accumulate a stockpile worth €3bn at the end of the current phase of the ETS in 2012 (for full breakdown see Notes to Editors).

“This windfall is even more than the €2.4bn promised by the EU at Copenhagen to help the poorest communities cope with the impacts of climate change this year,” said Thorpe.

“It is inconceivable that Europe can effectively subsidize dirty industry with more money than it’s prepared to pledge to those suffering most from climate change.”

The agency refutes the claim, made by groups such as Brussels-based BusinessEurope, which has 40 member federations in 34 countries including the UK’s Confederation of British Industry that Europe cannot afford to unilaterally adopt a 30 per cent target.

In fact, Europe risks falling behind the likes of China and the US – both now poised to profit from huge investment into low-carbon technologies. Europe’s environmental sector already employs 3.4m people and accounts for 2.2 per cent of GDP. Meeting the new 30 per cent target would incur limited additional costs, while potentially creating more jobs and reducing unemployment.

Oxfam says the private sector has a vital role to play in tackling climate change and welcomes the fact that not all European companies support the position of carbon-intensive companies. Many major firms, as well as investors, believe that the EU must take strong measures. Companies including Unilever, Centrica, Johnson Matthey, Lloyds, Nestle, Philips, Tesco and Vodafone, have all supported the call for a 30% EU target.

“Big business can provide both the vision and the means to help swing changes to public practices and to pave the way for progressive policy, as we have seen with the European Corporate Leaders’ Group,” Thorpe said.

“Many more companies are recognizing that stronger political action on climate change will spark new business opportunities. They are telling their investors as much in their financial disclosures. However, too few are actually speaking out publicly,” Thorpe said.

“Dirty industry groups are filling this vacuum but they are not representing the best interests of all.”

Notes to editors

1. For more information on the new report or to arrange an interview with the author of the report:

In Brussels – Angela Corbalan - + 32 2234 1110 or +32 473 562260

In the UK – Zahra Akkerhuys - +44 1865 472498 or +44 7525 901932 

2. See table below for full breakdown of top 10 company potential emission surpluses and windfall profits. Adapted from The Carbon Rich List: The Companies profiting from the EU Emissions Trading Scheme, Sandbag 2010.
The table shows current estimates of the CO2 allowance surpluses that these companies can expect at the end of ETS phase II, in 2012 and the potential value of these surpluses based on a carbon price of €14 per ton.

‘Carbon fat cats’: potential emission surpluses and windfall profits

Company Sector Country Net surplus permits 2008–09 Value (millions) Estimated surplus Phase II Value (millions)

ArcelorMittal

Iron & steel

Luxembourg

50,365,245

 €705

102,104,390

€1,429

Lafarge

Cement & lime

France

15,505,854

  €217

 31,515,921

  €441

Corus

Iron & steel

UK

12,726,650

  €178

 25,220,095

  €353

Cemex

Cement & lime

Mexico

8,097,132

  €113

 17,677,527

  €247

CEZ

Power & heat

Czech Republic

6,913,073

  €97

 13,899,614

  €195

HeidelbergCement

Cement & lime

Germany

6,838,069

  €96

 13,725,134

  €192

Salzgitter

Iron & steel

Germany

5,579,820

  €78

 12,309,646

  €172

US Steel

Iron & steel

USA

5,071,633

  €71

11,274,280

  €158

SSAB

Iron & steel

Sweden

4,634,495

  €65

 9,038,136

  €127

Slovenske

Power & heat

Slovakia

3,390,293

  €47

7,740,434

  €108

Total

 

 

 

119,122,264

€1,668

244,505,177

 €3,423

Adapted from Sandbag (2010)

3. Oxfam is partnering the 2010 World Lobby Awards in the climate category, which exposes business attempts to undermine effective European action on climate change. Three organizations have been nominated for the ‘award’: 

BusinessEurope: Nominated for aggressive lobbying to block effective climate action in the EU while claiming to support action to protect the climate.

ArcelorMittal: Largest steel producing company in the world, nominated for lobbying on CO2 cuts under the Emissions Trading Scheme (ETS) and profiting from free ETS emission permits.

RWE (npower): Nominated for claiming to be green while lobbying to keep its dirty coal- and oil-fired power plants open.

Organized by Friends of the Earth Europe, Corporate Europe Observatory, LobbyControl and Spinwatch, the awards have been running since 2005 to raise public awareness of how negative business lobbying impacts EU policy-making and to call for greater transparency.  For more information on the awards visit: http://www.worstlobby.eu/

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