Industrial Firms in Rich Countries Profit from Carbon Offsets

Industrial Firms in Rich Countries Profit from Carbon Offsets

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The European Union’s policy for carbon offsets is providing higher profits to industrial companies in rich countries and needs to be updated to deliver clean technology in developing countries, according to a report (PDF) from Sandbag.

A key finding indicates that EU companies are funding abatement projects at their competitors, which Sandbag’s founder and director Bryony Worthington says raises the question of why they choose to subsidize their international competitors, for example, by buying offset credits originating at Chinese and Indian steel works, when they have been raising fears of carbon leakage — moving their business outside the EU.

In particular, EU steel companies have claimed that caps on emissions will force them to move overseas but the report shows that iron and steel companies are voluntarily sending cash to their competitors in developing countries, which undermines their claim