It is reported that steelmaker ArcelorMittal, the biggest surplus holder in the EU Emissions Trading System, sold USD 100 million worth of December 2011 emissions allowances in 2011.

A spokesman for the company said that "The carbon transactions that matured in the fourth quarter of 2011 were the result of several trades done during the course of 2011, based on future price for delivery in December 2011."

The steel producer used these sales to boost its EBITDA, which totaled USD 1.7 billion in the 2011 fourth quarter, down by 7.5% from USD 1.9 billion in the same period a year earlier. As such, sales of carbon allowances made up 6% of ArcelorMittal's EBITDA for the quarter.

Mr Trevor Sikorski analyst from Barclays Capital said that the steelmaker's decision to sell EUAs is typical for industrial companies covered by the ETS when economic indicators are weak and credit is tight. He added that "Most industry has a surplus and they have generally been selling over the last couple of years and sales do get bigger when the outlook is not good."

Asked whether ArcelorMittal would continue to sell EUAs heavily in the current quarter, the spokesman said that the company was not changing its policy of banking most of its surplus CO2 allowances for use in the post 2012 ETS. He added that "Our policy of banking the majority of our allowances for phase III has not changed. All proceeds from these sales go to investment in projects to reduce our CO2 footprint."

ArcelorMittal has fallen on tough times of late in Europe, with both earnings and output down year on year in 2011, while it has temporarily or permanently closed mills across Europe.

(Sourced from www.icis.com)