News round-up, June 21, 2023
Quote of the day…
Europe cannot reach net zero without nuclear, Rolls-Royce chief says
…”Claims come against backdrop of division within EU over how to approach clean energy
The Telegraph by Howard Mustoe, 20 June 2023Most Read…
Biden equates China's Xi with 'dictators' at donors reception
Speaking at a campaign fundraiser in California, Biden said said Xi had been angered over an incident in February when a Chinese spy balloon was shot down by American military jets.
Le Monde with AFP, Published today at 5:10 am (Paris)U.S. Tracked Huawei, ZTE Workers at Suspected Chinese Spy Sites in Cuba
Intelligence bolstered suspicions telecom giants might be playing role in expansion of China’s capabilities on island
WSJ by Kate O’Keeffe, updated June 21, 2023 How Europe's polluting industries turned free CO₂ quotas into a market worth billions
'The right to pollute' (1/2). Cement and steel manufacturers have used a European Union aid system to boost their profits.
Le Monde by Guillaume Delacroix, Emmanuelle Picaud and Luc Martinon, published today at 5:00 am (Paris) Europe cannot reach net zero without nuclear, Rolls-Royce chief says
Claims come against backdrop of division within EU over how to approach clean energy
The Telegraph by Howard Mustoe, 20 June 2023Clean Geothermal, Green Earth: Sinopec to Host World Geothermal Congress 2023
In 22 cities, Sinopec Star has built 10 "smoke-free cities" and has installed more than 1 million square meters of geothermal heating. Over 85 million square meters of clean energy heating capacity have been built in Tianjin, Shaanxi, Hebei, Henan, Shandong provinces, and more, reducing carbon emissions by 4.2 million tons and benefiting millions of households.
BEIJING, June 21, 2023 /PRNewswire/ 
The AES Corporation President Andrés Gluski, Dominican Republic Minister of Industry and Commerce Victor Bisonó, and Rolando González-Bunster, CEO of InterEnergy Group, spoke at the Latin American Cities Conferences panel on "Facilitating Sustainable Investment in Strategic Sectors" on April 12 in Santo Domingo, Dominican Republic.How can strategic investment achieve both economic growth and social progress?… What is the role of renewable energy and battery storage in achieving the goals of the low-carbon economy?…
Image: Germán & CoCooperate with objective and ethical thinking…
President Biden equates China's Xi with 'dictators' / Image by Germán & CoBiden equates China's Xi with 'dictators' at donors reception
Speaking at a campaign fundraiser in California, Biden said said Xi had been angered over an incident in February when a Chinese spy balloon was shot down by American military jets.
Crossing the line can be dangerous…
In September 2002, I published on Energycentral.com an essay titled: *"Beware of Starving the Enemy of Oxygen." The paper delved into the dangerous tactic of depriving the adversary of oxygen. The praxis entails maintaining an open door to any potential solution that has been identified. The article "Biden Shows Growing Appetite to Cross Putin's Red Lines," published in the Wall Street Journal, offers valuable insights into President Biden's inclination to confront the limitations imposed by the Russian leader, Putin. Despite the suspicions of a potential global conflict, this action is a subject of significant apprehension. The former Secretary of State, Henry Kissinger, has warned that when two powers of similar strength oppose, it often results in armed conflict. The need for clearly defined principles for conflict management is reminiscent of the period preceding the onset of World War I. The unresolved inquiry concerns the feasibility of peaceful coexistence between China and the United States and whether it can be achieved without the potential risk of military conflict. Kissinger proposes the implementation of measures to foster competition in strategic domains, as well as the establishment of an ongoing high-level dialogue between Beijing and Washington. Unfortunately, there has been a significant increase in the frequency of reports concerning drone attacks targeting Russian infrastructure and military installations. The extent of these attacks has exceeded the confines of the front line. It can be categorized as shaping operations, which may serve as a preliminary step towards a counteroffensive by Kyiv. The recent fire incident at the Afipsky refinery has brought attention to the potential outcomes and advantages of pushing against the limits set by President Putin, as there is a possibility that a drone caused the incident.
*HTTPS://ENERGYCENTRAL.COM/C/OG/BEWARE-STARVING-ENEMY-OXYGENUS President Joe Biden (R) and China's President Xi Jinping (L) meet on the sidelines of the G20 Summit in Nusa Dua on the Indonesian resort island of Bali on November 14, 2022. SAUL LOEB / AFP
US President Joe Biden equated his Chinese counterpart Xi Jinping with "dictators" on Tuesday, June 20, as he addressed a Democratic Party donors reception in the presence of journalists.
Speaking at a campaign fundraiser in northern California, Biden said Xi had been angered over an incident in February when a Chinese balloon, which Washington says was used for spying, flew over the United States before being shot down by American military jets.
"The reason why Xi Jinping got very upset in terms of when I shot that balloon down with two box cars full of spy equipment is he didn't know it was there," Biden said. "I'm serious. That was the great embarrassment for dictators, when they didn't know what happened. "That wasn't supposed to be going where it was (...) and he didn't know about it," Biden said of Xi. "When it got shot down he was very embarrassed and he denied it was even there."
Biden, who at 80 is running for re-election, on Tuesday waived off concerns about the Asian giant, telling donors that "China has real economic difficulties." The remarks are likely to raise strong objections from Beijing, where US Secretary of State Antony Blinken visited just days earlier in an attempt to lower the temperature between the two global powers.
Still on the subject of China and Xi, Biden said "we're in a situation now where he wants to have a relationship again." Blinken "did a good job" on his Beijing trip, but "it's going to take time," Biden added.
The US president did bring up another prickly point regarding communist-ruled China: a recent summit in which leaders of Australia, India, Japan and the US, known as the Quad group, sought to boost peace and stability in the Indo-Pacific maritime region. The four countries are "working hand in glove in the South China Sea and the Indian Ocean," Biden said. "What he [Xi] was really upset about was that I insisted that we unite the (...) so-called Quad," Biden said.
Tuesday was not the first time Biden has made significant, even provocative, statements at fund-raising receptions, usually small-scale events at which cameras and recordings are forbidden but where journalists may listen to and transcribe the president's opening remarks. At one such event last October, for example, Biden spoke of the threat of nuclear "Armageddon" from Russia.
Seaboard: pioneers in power generation in the country…
…“More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.
Despite U.S. restrictions on Huawei, exporters have sold large amounts of technology to the Chinese company. PHOTO: ERIC GAILLARD/REUTERS/ Editing by Germán & Co U.S. Tracked Huawei, ZTE Workers at Suspected Chinese Spy Sites in Cuba
Intelligence bolstered suspicions telecom giants might be playing role in expansion of China’s capabilities on island
WSJ by Kate O’Keeffe, updated June 21, 2023 …”China's military involvement in the region is a cause for concern. They supply armaments, train personnel, send warships and military delegations, and covertly involve themselves in strategic infrastructure development, such as ports (Honduras). Recent information on a base in Cuba highlights the extent of their involvement.
Ursula von der Leyen's perilous journey to Latin America as President of the European Union by Germán & Co , 20 June, 2023WASHINGTON—During the Trump administration, U.S. officials reviewed intelligence that tracked workers from the Chinese telecom giants Huawei Technologies and ZTE entering and exiting facilities suspected of housing Chinese eavesdropping operations in Cuba, according to people familiar with the matter.
The intelligence contributed to suspicions within the Trump administration that the telecommunications companies might be playing a role in expanding China’s ability to spy on the U.S. from the island, according to people familiar with the matter. It couldn’t be learned whether the Biden administration has pursued that line of inquiry.
While neither Huawei nor ZTE is known to make the sophisticated tools governments would use for eavesdropping, both specialize in the technology needed to facilitate such an operation, such as servers and network equipment that could be used to transmit data to China, the people familiar with the matter said.
In a statement, Huawei said it denied “such groundless accusations,” adding that it was “committed to full compliance with the applicable laws and regulations where we operate. ”ZTE didn’t respond to a request for comment.
China has maintained a spy base in Cuba since at least 2019, when Donald Trump was president, and the two countries already jointly run four eavesdropping stations on the island, according to U.S. officials. In addition, Beijing and Havana are negotiating to establish a new joint military training facility on Cuba’s northern coast, The Wall Street Journal has reported.
Beijing’s efforts to expand its intelligence gathering from Cuba are ongoing, the White House has said. Following a 2019 upgrade to its intelligence-collection facilities on the island, Beijing “will keep trying to enhance its presence in Cuba, and we will keep working to disrupt it,” a White House official said Monday.
U.S. officials have long said China’s government might use the nation’s telecom companies to spy. The U.S. has been engaged in a yearslong campaign to persuade allies to shut Huawei in particular out of their next-generation telecommunications networks. Huawei has said it wouldn’t spy for China.
The Chinese Embassy didn’t respond to requests for comment. The Chinese Foreign Ministry has denied that China is spying in Cuba. The Cuban Embassy in Washington didn’t respond to a request for comment, but has called the Journal’s earlier report on a Chinese spy station on the island “totally mendacious and unfounded.”
The U.S. Office of the Director of National Intelligence didn’t respond to requests for comment.
On Tuesday, Secretary of State Antony Blinken said he had told his counterparts in Beijing that the U.S. had “deep concerns” about Chinese spying and military activities in Cuba.
“This is something we’re going to be monitoring very, very closely, and we’ve been very clear about that,” he told reporters. “And we will protect our homeland; we will protect our interests.”
The White House didn’t respond to a request for comment on Huawei’s and ZTE’s potential roles in China’s spying operation in Cuba. National Security Council spokesman John Kirby said Tuesday it was “no secret or surprise that the PRC has been trying to improve their influence, their reach, and their intelligence collection capabilities in the Western Hemisphere and that includes the relationship that they had had for quite some time with Cuba.”
“It’s not like we aren’t aware of it, it’s not like we haven’t been monitoring it,” he said. “And quite frankly, it’s not like we haven’t taken steps and we’ll continue to take steps to thwart it and to be able to protect our own secrets and our own national security, and that’s the case in this space as well.”
Rep. Mike Gallagher (R., Wis.), chairman of the bipartisan Select Committee on the Chinese Communist Party, on Tuesday sent a letter to Director of National Intelligence Avril Haines and Commerce Department Secretary Gina Raimondo seeking clarity on U.S. policies to control the export of U.S. technology to Chinese telecom companies.
In the letter, which was reviewed by the Journal, he said Huawei has assisted the Cuban government in modernizing its telecommunications and internet infrastructure since the 2000s and that the company, along with ZTE and Great Dragon Information Technology Group, maintains a regular business presence on the island.
Great Dragon couldn’t be reached for comment.
Gallagher wrote that because of China’s official policy of using Chinese commercial entities to build up its military, any enhancement of China’s intelligence capabilities in Cuba “is likely” to be aided by Chinese telecommunications companies.
He speculated that these companies’ existing business operations in Cuba could provide cover for Chinese intelligence officials to travel to and from the island without creating the same suspicion as official travel.
Gallagher posed a series of questions to the officials regarding the intelligence community’s awareness of the connections between Chinese signals-intelligence operations and commercial activities in Cuba and whether the information has been used to inform ongoing export-licensing decisions.
In 2019, the U.S. Commerce Department added Huawei to a so-called entity list requiring companies to get licenses to ship many goods to Huawei. In 2020, officials significantly expanded the licensing requirements. But the Commerce Department has issued many such licenses, enabling exporters to continue selling large amounts of tech to Huawei.
The chair of the House Foreign Affairs Committee, Rep. Michael McCaul (R., Texas), has been spearheading an effort to pressure the Commerce Department to change its policy. In 2021, he released data showing the department had granted 113 export licenses enabling companies to sell about $61 billion of goods to Huawei from Nov. 9, 2020, through April 20, 2021.
The Commerce Department had restricted exports to ZTE on and off since 2016 until Trump said in 2018 that he would allow the company to resume buying U.S. goods in exchange for a fine of $1.3 billion and a leadership shake-up.
Alan Estevez, the Commerce Department’s undersecretary for industry and security, has told lawmakers that his team is reviewing its policies and doing everything possible to prevent sensitive U.S. technology from getting into the hands of adversaries.
A Commerce Department spokesman said Huawei still faces “significant export restrictions” and noted that the agency in April imposed the largest stand-alone civil penalty in its history against a U.S. company for selling hard-disk drives to Huawei without a license.
The spokesman added that ZTE remains subject to a settlement agreement with the Commerce Department that subjects it to additional oversight.
Image by Germán & CoHow Europe's polluting industries turned free CO₂ quotas into a market worth billions
'The right to pollute' (1/2). Cement and steel manufacturers have used a European Union aid system to boost their profits.
Le Monde by Guillaume Delacroix, Emmanuelle Picaud and Luc Martinon, published today at 5:00 am (Paris) It's a 30-year story worth billions of euros. Thirty long years that will not go down in the European Union's (EU) history as the most successful in its fight against global warming. Three decades during which Europe's most polluting industries – steel, cement, oil, and aluminum, among others – received free CO2 emission quotas; a kind of "right to pollute" that is supposed to be reduced over time to encourage them to reduce their greenhouse gas emissions.
However, the scheme quickly became a financial tool enabling its beneficiaries to increase their profits through the resale of these quotas. Between 2013 and 2021 alone, the World Wide Fund for Nature estimates that the biggest emitting industries pocketed €98.5 billion, and only a quarter of this sum (€25 billion) was devoted to climate action.
The free quota system, which was launched on January 1, 2005, and is still in force, is set to disappear in 2034. On April 18, the European Parliament adopted a new climate plan to gradually replace it with a "carbon border adjustment mechanism" at the Union's borders, this time with the aim of making imports from the sectors with the highest CO2 emissions green. By opting for a simpler scheme, the EU did not officially make its mea culpa. But implicitly, that was the admission.
'Legal' detour
After eight months of investigation with financial support from the Investigative Journalism for Europe (IJ4EU) fund, Le Monde can reveal that this system, which was intended to be benevolent toward industrialists, has been diverted from its original purpose. Le Monde took a closer look at the steel and cement industries in France and Spain, which are two of the biggest beneficiaries.
An in-depth analysis of the financial transactions recorded by these players on the EU Emissions Trading Scheme (SEQE-EU-ETS) confirms what some people have long assumed: Companies have resold part of their free allowances for hundreds of millions of euros, sometimes billions. But unlike the huge VAT fraud that rocked the scheme in its early days, costing EU countries €6 billion and leading to court convictions many years later, this form of embezzlement is legal.
This story began at the Rio Summit in 1992. It was then that the idea of a carbon tax on industries in developed countries, in a bid to make the economy more environmentally friendly, was born. The initiative failed to win the unanimous support of member states, with France in particular blocking the decision. In 1997, the Kyoto Protocol put the issue back on the table. Al Gore, vice president of the United States, found the idea interesting but feared that this approach would not be approved by the US Congress. So, a system more compatible with the capitalist model had to be devised, with a view to a possible rapprochement of transatlantic markets in the future.
Europe then set up a carbon market, within which manufacturers could buy and sell quotas to regulate their CO2 emissions. "The EU created a market that had never existed before from scratch. It was a first in the history of mankind," said Thomas Pellerin-Carlin, director of the Europe program at the Institut de l'Economie pour le Climat. Today, this market is the world's leading financial center of its kind, although others are emerging, for example in China.
"From the outset, a number of key questions were raised. What model should be used to allocate the quotas that companies will trade with each other? Should they be given away for free or sold? Who will be covered by the measure? Will companies be able to save quotas from one year to the next?" said Julien Hanoteau, professor of economics and sustainable development at Kedge Business School in Aix-Marseille. A model was rapidly taking shape, even if it had not been met with unanimous approval. The European Union decided that every year it would allocate free CO2 quotas to manufacturers, based on the greenhouse gases they estimated they would emit over the following 12 months. One quota is equivalent to one tonne of CO2.
Sale of CO2 quotas with no strings attached
After one year, industrial facilities must surrender the number of allowances equivalent to their actual CO2 emissions. If they have emitted more CO2 than expected, they can buy additional allowances from companies that have not used all of theirs, according to the "polluter pays" principle devised by the market's creators. Conversely, if they have emitted less CO2 than expected, they can resell the surplus allowances they hold. Quotas have no sell-by date. And when they are in surplus, they become stocks in the form of simple financial assets that companies can sell at will, with no strings attached, or supplement by buying others on the market if the price of carbon has fallen.
In its 2022 annual report, ArcelorMittal stated that it held €154 million in "intangible financial assets" in respect of CO2 quotas on December 31, 2021, and €691 million on December 31, 2022, as noted by the London-based international journalist organization Finance Uncovered, which was contacted for the purposes of this investigation. This is the result, said the company, of "mature" purchases that have enabled it to strengthen the assets side of its balance sheet for considerable amounts.
The pilot phase of the European free quota scheme began 20 years ago in 2003. Distribution began timidly in 2005, reaching cruising speed in 2008. In retrospect, the initial logic was surprising. The more CO2 an industrial facility plans to emit, the more rights to pollute it receives. From 2008 until 2012, quotas were allocated on the basis of production years prior to the economic crisis. As a result, manufacturers received far more allowances than they actually needed. Some manufacturers themselves were quick to express reservations about the SEQE system's methods, such as the Spanish cement manufacturer Cementos Tudela Veguin and the French cement manufacturer Vicat.
"We told ourselves that we were on a slippery slope, that we were potentially going to have to give back the stocks granted in excess. We were aware that it couldn't last, that someone was going to ring the bell at some point," said Eric Bourdon, deputy managing director of the French cement manufacturer, which chose not to touch the surplus quotas that had been distributed to it, a strategy that ran counter to its competitors. "We sold a little at the beginning, but we stopped very quickly. We now have 4.5 million tonnes of CO2 quotas. We'll have to decide how best to use them," he said.
The allocation rules were changed in 2012 and again in 2018. But the excess has continued, as shown by the latest report on the state of the EU ETS, published in 2022 by the European Roundtable on Climate Change and Sustainable Transition. Cumulative surpluses of free allowances only stabilized in 2013, and even then at a very high level, for the equivalent of 1.3 billion tonnes of CO2 per year. And it was only in 2017 that CO2 emissions across all sectors began to fall significantly.
'A market created from scratch'
MEP Yannick Jadot (Europe Ecologie-Les Verts, France's Green party), who has been calling for the abolition of free quotas for years, is bitterly disappointed. "The public authorities have created a market from scratch, accepting from the outset all the intolerable excesses of the financialization of the economy," said the former Green candidate in the 2022 presidential election. "The State could very well have recuperated the money generated by the sale of quotas to environmentally compensate polluting activities, lower VAT or to reduce income tax. However, this is not the choice that was made, but instead to let companies operate freely," said Hanoteau.
Allowances are auctioned every morning at 11 am. In the early days, transactions represented a few million tonnes of CO2 per day. Since then, the market has become more sophisticated. It now covers almost 18,000 installations, and manufacturers, through banks, investment funds, brokers and a dozen trading companies, now trade 20 to 30 million tonnes of CO2 every day, anticipating future variations in the price of carbon.
"The market has become very attractive to investors. The price of carbon was initially €7 per tonne, in August 2008 it rose to €24, and now it's hovering around €100. Some predict that it will reach €150 in 2030, and in the meantime, more than 80% of transactions are speculative rather than related to environmental issues," said Ismael Romeo, director of SendeCO2, a trading company based in Barcelona.
Ivan Pavlovic, an energy transition specialist at Natixis (a subsidiary of the Banque Populaire Caisse d'Epargne group), confirmed this: "Even if they remain a minority for the moment, speculative investment funds specializing in carbon markets, which bet on these quotas, now exist." In 2021, almost 11 billion tonnes of CO2 were traded on the market, with a value of €683 billion, said British financial analysis company Refinitiv.
'It's a black box'
The system soon proved to be flawed. Transactions were difficult to trace, even for experts in the field. "The system is rather esoteric. At all levels, including the European Commission, nobody has a global, unanimous vision. It's a black box. Only the financial directors or industrial directors of the companies concerned know exactly what is being done with these quotas," said the head of a CO2 quota trading company.
Sometimes, transactions are not only justified by financial reasoning. "They can also be inspired by climatic or political events. Energy companies, which were excluded from the system of free quotas in 2013 because they used them to increase the price of electricity, are obliged to buy them at their own expense. They may resell them at the end of the winter if the temperature was higher than expected and their CO2 emissions were consequently lower. The same applies if there is inflation in energy prices, as in the summer of 2022, when gas prices soared," said Gregory Idil, a trader at Vertis Environmental Finance, a Brussels-based company.
In any case, companies are reluctant to disclose this information, which they consider sensitive for their industrial competitiveness. "Transactions are a reflection of economic activity. If a company says it has sold quotas, it is potentially acknowledging that its production has fallen," said Barcelona-based trader Romeo. Not everyone is equal when it comes to the right to pollute. British Steel learned this the hard way. After getting rid of its free quotas to make up for its financial losses, it had to buy back pollution rights to be able to continue its activities and be authorized to emit CO2. Except that, in the meantime, the price of carbon had soared. In the end, the company became over-indebted and, a victim of its speculation, it eventually went bankrupt in 2019.
Opacity
Quota sales are subject to "business secrecy." This was an argument put forward by several of the companies interviewed by Le Monde when commenting on the information in our database. In Spain, cement manufacturers referred us to their employers' federation, Oficemen, for consolidated sector data. But the federation refused to comment. "Oficemen doesn't have any data. These questions relate to specific company issues. Only they can answer you," said a spokesperson. None of them did.
Another difficulty is that the financial transactions carried out by each of the 18,000 industrial sites that benefited from free allowances are published retrospectively by the EU, with a three-year time lag. At present, while allocations of free allowances are known up to 2022, the latest available figures for resales are for 2019. And they don't tell the whole story.
As some plants have changed hands, it is impossible to reconstruct the history of transactions site by site. The European Union Transaction Logs (EUTL) – which Le Monde worked on with the help of the database on the EUETS.info website, make it possible to trace, by date and time, the exchanges of allowances carried out between operators. However, they do not reveal any changes in ownership of industrial facilities that may have occurred over the period studied (2005-2019), which contributes to the opacity of this market.
Swiss cement manufacturer Holcim refused to comment on the figures, on the grounds that its scope of consolidation has changed since its 2015 merger with Lafarge, which led to the sale of cement plants by the new entity. The same goes for Germany's Heidelberg Materials (ex-HeidelbergCement), which has radically altered its network of cement plants in Europe, following its 2016 takeover of Italy's Italcementi and its French branch Ciments Calcia.
Spain's Cementos Portland Valderrivas became the leader on the Iberian Peninsula when it took control of Uniland in 2006, but only regained full ownership of the company in 2013 after selling its subsidiary Cementos Lemona to Ireland's CRH. Its competitor, Cementos Molins, pointed out that in 2013 it acquired a plant from Mexico's Cemex in Barcelona, which it claims "distorts" the balance of its quota exchanges. Their Brazilian colleague Votorantim Cimentos is in the same situation, having only entered the Iberian market in 2012 by taking over the sites of Portugal's Cimpor.
'Surplus' companies
One thing is certain: A group like ArcelorMittal has always received more free quotas than it emitted in CO2. And that's still the case today. The steel giant resold large quantities in 2008, and again in 2011 and 2012. However, the level of its emissions remained such that it also had to reach into its pocket in some years, in order to acquire some on the carbon market. In total, according to EUTL records, between 2005 and 2019, the steel giant sold €3.7 billion worth of allowances and bought €1.8 billion, generating a margin of €1.9 billion. When contacted by Le Monde, ArcelorMittal France was unable to confirm these figures.
Again according to EUTL records, Holcim had a surplus of pollution rights until 2017. It sold many allowances from 2008 to 2012 before merging with Lafarge, which also sold a lot of allowances. In total, the two companies now merged would have sold €1.3 billion and bought €339 million to date, for a positive balance of €986 million. The amounts are buried in the Group's accounts and are impossible to trace in annual reports. "Transaction data is business data, which we do not communicate," said Lafarge France.
Their competitor, Heidelberg Materials, had a surplus until 2016. This major player in European cement, present in France through its Ciments Calcia brand and in Spain with the Sociedad Financiera y Minera cement plants, is also said to have disposed of a significant quantity of allowances after the 2008 financial crisis, for a total of €732 million, but ceased this practice in 2016 and also purchased €364 million, making a profit of €368 million. According to a spokesperson, the German firm "unfortunately does not have this information."
In Spain, Cementos Portland Valderrivas, a subsidiary of public works giant FCC, is one of the biggest CO2 emitters. From 2008 to 2012, it received an inordinate volume of rights to pollute each year, completely out of proportion to its actual emissions. The surplus did not end until 2021. It is said to have sold some of these rights, pocketing €288 million, and buying €11 million, for a profit of €277 million. The company refused to comment on these figures. "Our policy is not to participate in journalistic investigations," Le Monde was told.
'Cut the losses'
Nevertheless, some of these transactions can be found in the annual accounts filed with the Commercial Registry by its subsidiary Cementos Alfa. Until 2021, a line explicitly entitled "sale of greenhouse gas emission rights" appeared in the company's balance sheets, confirming that quotas are indeed considered an asset and that they are managed by the company's finance department, and not by the environment or sustainable development departments.
"Some companies sold a lot [of quotas] in 2012, 2014 or even 2018, years that correspond either to the introduction of stricter free allowance allocation criteria, or to periods when carbon prices were high," said Florian Rothenberg, carbon market analyst at ICIS consulting.
On the ground, testimonials confirm that the financial storm of 2008 precipitated quota sales. "At the time, our managers' only concern was to cut the losses. It was in this climate of crisis that some cement plants began to sell their pollution rights, which they no longer needed, due to the drastic fall in activity. Since then, European and Spanish regulations have evolved considerably to better encourage the gradual reduction of the industry's carbon emissions and discourage speculation on the CO2 market," said Daniel Lopez Caro, representative of the UGT union's industrial federation within the cement sector.
Absolute secrecy
As several French and Spanish trade unionists have said, employee representatives attending meetings with management are bound to absolute secrecy on the subject. They are made to sign confidentiality agreements, which no one dares to break for fear of being taken to court, as has already happened at ArcelorMittal. A source contacted by Le Monde, who had access to the accounts of one of the companies concerned, confirmed that this practice does indeed take place: "As recently as 2022, our managers resold quotas for tens of millions of euros. These sums are used to restore the company's net income when the year has been average."
"I know what my company pocketed by auctioning off quotas that it obtained free of charge, but I swore an oath to the works council not to divulge the figures. All I can say is that the money was used to balance the books to the tune of €6 to €10 million a year when times were tough," said a Spanish trade unionist, under the seal of secrecy. Another anonymous trade union source confirmed this practice at the steelworks: "At the time of the crisis at Florange, ArcelorMittal was receiving free quotas even though the site was shut down. It was a deception because this money was not used to reduce CO2 emissions or to invest in clean energy. It was an unhoped-for windfall of money that they obviously pounced on," she said.
"We were given figures orally and, most of the time, we said nothing, because management explained to us that by selling the quotas, they had saved our jobs. So we turned a blind eye. We preferred not to know," said a former Holcim Spain employee. "Everyone knows where the money ended up, but unfortunately it's impossible to demonstrate a direct link between the sale of quotas and the dividends distributed to these companies' shareholders," said Judith Kirton-Darling, general secretary of IndustriALL Europe, the European industrial workers' union.
According to Sam Van den plas, Campaign Director at Carbon Market Watch, an NGO that has been following the free quota affair for several years, the mystery is now over: "We finally know what companies have done with their rights to pollute. Up until now, we only had hypotheses," he said, referring to a study by CE Delft, which estimated in 2016 that free quota sales amounted to several billion euros.
Jadot believes the system of free quotas is "beyond moral judgment": "The whole thing is scandalous, as is the possibility of buying rights to pollute in African countries. It's a way of shirking responsibility and falsely practicing decarbonization," he said. "Companies have hijacked the concept of free quotas to make a profit, which raises an ethical question. At a time when we're trying to save the planet, some people are lining their own pockets. It's shameless," said Ana Isabel Martinez Garcia, a steel sector specialist with the Syndex accounting and consulting firm. It's shameless but legal.
Tufan Erginbilgic believes SMRs will play a pivotal role in helping to decarbonise electricity grids across the continent CREDIT: F. Carter Smith/Bloomberg/ Editing by Germán & Co Europe cannot reach net zero without nuclear, Rolls-Royce chief says
Claims come against backdrop of division within EU over how to approach clean energy
The Telegraph by Howard Mustoe, 20 June 2023Europe cannot reach its target of net zero carbon emissions by 2050 unless it embraces nuclear power, the chief executive of Rolls-Royce has said.
Tufan Erginbilgic claimed that new small reactors of the sort being developed by his company would play a pivotal role in helping to decarbonise electricity grids across the continent.
Speaking at the Paris Air Show, he said: “I’m not sure, without nuclear, Europe can go to a net zero world. SMR [small modular reactors], frankly, relative to the traditional nuclear power plant, has lots of advantages, because it is much smaller. And therefore the risk profile is much smaller.”
Mr Erginbilgic’s comments come against a backdrop of division within the European Union over how to approach nuclear power.
Some members, such as Germany and Denmark, have a more circumspect approach to nuclear and want more wind and solar sources. Others, including France, are keen to push ahead with the development of new nuclear power.
Rolls-Royce is developing so-called SMRs that are far smaller and cheaper than existing large-scale generators. It hopes the plants can offer zero-carbon power to decarbonise homes, industry and also make green hydrogen for the airline industry.
The company is pushing the UK to place cornerstone orders for the products. However, the Government is running a competitive process and looking at various rival designs. An update is expected as early as October.
Mr Erginbilgic said: “Our technology is very robust. I’m confident that our technology will actually prevail in that process.”
However, he renewed his plea for the government to make “firm commitments” on orders for the reactors. Rolls-Royce has argued that orders from the state will help attract private sector buyers and investment to get the technology off the ground.
In February, Mr Erginbilgic warned that Britain risks squandering its role as a leader in mini-nuclear reactor technology if ministers failed to support its SMRs.
Rolls-Royce is competing with dozens of other companies. It has ambitions to eventually build about 30 SMRs, each with a capacity of about 470 megawatts, which will supply millions of homes and businesses with clean electricity.
USA, Nevada: McGinness Hills Geothermal Power Plant Capacity Increased to 138 MW/ Image by Germán & CoClean Geothermal, Green Earth: Sinopec to Host World Geothermal Congress 2023
In 22 cities, Sinopec Star has built 10 "smoke-free cities" and has installed more than 1 million square meters of geothermal heating. Over 85 million square meters of clean energy heating capacity have been built in Tianjin, Shaanxi, Hebei, Henan, Shandong provinces, and more, reducing carbon emissions by 4.2 million tons and benefiting millions of households.
BEIJING, June 21, 2023 /PRNewswire/ -- China Petroleum & Chemical Corporation (HKG: 0386, "Sinopec") will host the 7th World Geothermal Congress (WGC 2023) from September 15 to 17 in Beijing, China, which will be China's first time hosting the international convention known as the "Olympics of Geothermal." The theme for the WGC 2023 is "Clean Geothermal, Green Earth."
Organized by the International Geothermal Association (IGA), a leading global platform on geothermal energy committed to promoting and supporting global geothermal development, the triennial conference is the premier global event convening the leaders of industry, academia, the finance sector, governments, NGOs, and communities to collaborate and provide thoughtful solutions for a sustainable society.
Sinopec Star Co., Ltd., a subsidiary of Sinopec that has been actively exploring the development and utilization of geothermal energy since 2006, is making significant contributions to Sinopec's roadmap of clean energy development and building up a new industry layout.
The company is committed to promoting scaled development of its "Geothermal+" business model to further expand carbon asset volume and improve service quality while integrating into major regional and national economic and ecological development strategies to push forward clean energy heating.
As of now, Sinopec Star has built 10 "smoke-free cities" in China and boasts more than 1 million square meters of geothermal heating capacity in 22 cities. It has built nearly 85 million square meters of clean energy heating capacity, serving more than 60 cities and counties in Tianjin, Shaanxi, Hebei, Henan, Shandong provinces, and more, thereby reducing carbon emissions by 4.2 million tons per year while benefiting millions of households.
Globally, Sinopec Star is actively pursuing cooperation opportunities with international institutions, organizations, and partners. It has established alliances which Icelandic companies, landed a series of pilot geothermal projects in China, led the establishment of a Sino-Icelandic Geothermal R&D Center with Iceland's Arctic Green Energy, and hosted international geothermal conferences and workshops to continually strengthen global cooperation while expanding the brand's influence.
In addition, Sinopec Star has drafted 52 industry standards that have been approved and cover a wide scope, including geothermal resource exploration and evaluation, geothermal heating, and more. It actively participates in constructing the geothermal international standard system, winning the market's trust with leading standards.