European cement producers ’could make more from carbon trading than from exports’ In essence, producers could make more cash by reducing exports and trading surplus carbon emission allowances under European plans to cut greenhouse gases. City analysts claimed that the current high price of carbon dioxide makes shipping cement from European Union countries uneconomical. Instead it would be more prof itable for companies to sell on the freed up carbon dioxide allowances under the EU’s Emission Trading Scheme.
A report by investment bank Dresdner Kleinwort Wasserstein revealed that cement producers such as Lafarge and Castle Cement would be better off importing the material from non-European Union countries such as Egypt and Turkey because they would be unable to pass increased costs due to emission trading on to customers.
Under the ETS, companies are allocated carbon dioxide emission allowances each year. Should a company exceed its allowance it would be forced to pay fines on each extra tonne of carbon dioxide produced or buy more allowances on the open market from companies that have managed to come in under their emission targets.
With the current market price of carbon dioxide standing at around UK£5.5 per tonne, cement producers could stop production in the European Union and replace it with imports from non-EU countries without hitting profits.