December 22, 2008

Rio Tinto Likely To Receive Free Carbon Permits Worth $462M in 2010

Rio Tinto is likely to be the biggest recipient of public support under the Australian Federal Government’s carbon trading scheme. Free carbon permits worth $462 million are expected to flow to the company in 2010, the Sydney Morning Herald reports.

Under the scheme, the steel and cement industries, along with aluminum smelters, are eligible to cover 90 percent of their carbon emissions with free permits.

The scheme will allocate about $3.5 billion, if carbon permit price is $25, to emissions-intensive, trade-exposed industries during the the scheme’s first year of operation. The total value of free permits allocated to Australia’s heaviest polluters is expected to rise to $5.3 billion in 2015 if the carbon permit price reaches $35.

Don Henry, the executive director of the Australian Conservation Foundation told the paper that “These huge levels of public support mean the Government has bent over backwards for the biggest polluters…It risks entrenching in our economy the emissions-intensive activities that we are supposed to be trying to stamp out.”

In January, Rio Tinto was named one of the 100 most sustainable companies by Corporate Knights Inc. and Innovest Strategic Value Advisers.

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