GENEROUS ALLOCATIONS of carbon emissions to cement manufacturers at a time when the economy was booming mean that they can now make money by selling carbon credits in a "perversion of the 'polluter pays' principle", it has been claimed.
Donal Ó Riain, managing director of Ecocem - Ireland's only "green" cement manufacturer - said that with cement production expected to fall by a third because of the downturn in construction, the main beneficiaries would be its competitors. He explained that traditional cement producers had been given generous allocations to cover their carbon dioxide (CO2) emissions based on production levels at the height of the boom - so much so that they were now in a position to sell credits.
A lucrative international trade has developed in selling unused carbon credits.
"The over-allocation was something in the order of one million tonnes and, at €25 per tonne of CO2, that works out at €125 million over five years," he said. "So they'll be making windfall profits when sales fall because of the huge gap between allocation and use."
Mr Ó Riain said the Department of the Environment would not accept an Ecocem proposal that it should go back to Brussels to renegotiate the National Allocation Plan, approved last year.
He said a report commissioned by Ecocem and compiled by Prof Peter Clinch of UCD - who is now a policy adviser to Taoiseach Brian Cowen - had shown that the current Emissions Trading Scheme for CO2 "discriminates very severely" against Ecocem.
By producing cement from the slag by-product of steel manufacturing, the company is saving 300,000 tonnes of CO2 emissions per year - "more than the annual savings of 240,000 tonnes that the Minister expects from long-life lightbulbs", Mr Ó Riain said.
"For every tonne we sell, the traditional cement manufacturers lose market share, but still get credits . . . effectively what it means is that the polluter gets paid here - and that's perverse."
Ecocem had warned in November 2005, after the National Allocation Plan was first drafted, of the "potentially disastrous" outcome of being too generous to cement producers.
"They bent over backwards to facilitate the cement industry, and it's a bigger scandal because they can't blame anyone else. The fingerprints of the Department of the Environment are all over it. Even they're embarrassed by this spectacular own goal."
Ecocem has proposed a solution that would involve using unallocated credits and giving some of those to the company. Mr Ó Riain said it "would cost the Government nothing" but civil servants were not enthusiastic about tinkering with the emissions scheme.
He also complained that, although the promotion of "green" cement was proposed in the Government's National Climate Change Strategy (2000), only the Office of Public Works was doing so while the Department of the Environment "sits on its hands".
He urged Minister John Gormley to ensure "green" cement is used in the construction of 5,000 local authority houses per annum, saying this would cut their embodied CO2 by a quarter.
A spokesman for the Minister said there was "no mechanism" to revisit the allocations. But he said the carbon budget had pledged to introduce public sector "green procurement" of low-energy, low-carbon products.
