from Jeanette Fitzsimons
It is perhaps no surprise that our friend Fonterra, as the second biggest coal user in NZ (and a substantial user of gas as well), is among the “dirty dozen” largest users of fraudulent ETS credits identified by the Morgan Foundation in their brilliant piece of research Who’s the Real Cheat Here? Climate Cheats II: The Dozen Dirty Businesses.
What is surprising is that in Zella’s creative graphic below, using figures from that report, Fonterra doesn’t look too bad. It comes tenth in the Morgan list and holds fewer shonky credits than the oil and electricity companies. Fonterra’s 1.2 million units, although still huge, compare favourably with BP’s 6.1 million units.
But Fonterra is worse than they look and here’s why:
The ETS rules give free credits to “trade exposed” companies whose overseas competitors don’t have to pay any price for their carbon emissions. Fonterra is eligible for free credits equal to 60% of its process emissions.
These credits, worth up to $25 per unit on the international market, are paid out courtesy of the NZ taxpayer. Fonterra was expected to use them in part-payment for their emissions.
But they didn’t. Instead, like many other companies benefitting from this largesse, Fonterra cheated. They sold the credits at full price and bought dirt cheap credits from places like Russia and Ukraine which did not represent actual emissions reductions – in other words, they were fraudulent. They used these junk credits to pay their ETS obligation to the Government.