Ecocem, Ireland's only environment-friendly cement manufacturer, risks being put out of business unless the Government reallocates carbon credits to the cement industry, an Oireachtas committee will be told this week.
The company's chairman, Donal Ó Riain, will tell the Oireachtas Joint Committee on the Environment that, under the current scheme of credits, its production of "green cement" is generating windfall profits of more than €6 million for traditional cement manufacturers.
Ecocem's annual production of 300,000 tonnes of cement from ground granulated blast-furnace slag (GGBS) reduces carbon dioxide (CO2) emissions from the Irish cement industry by 270,000 tonnes a year, all of which are claimed in credits by its rivals.
With carbon trading at €23 per tonne, "this amounts to a staggering €6.2 million per annum", a spokesman said. "In effect, Ecocem is being forced to subsidise its competitors. It's a bit like being the designated driver at a party and being asked to pay for everyone's drinks".
Over the three-year period of the Emissions Trading Scheme (ETS), the subsidy would amount to more than €18 million. "This is the exact opposite of the way the ETS should operate. That's why we're saying it is anti-competitive and needs to be changed".
To reduce their own emissions of a tonne of CO2 for every tonne of cement they produce from crushed limestone, Europe's big cement companies have taken to buying in GGBS from the steel industry in competition with manufacturers of "green cement".
For every tonne of the raw material they purchase, they are reducing their pollution by a tonne of CO2 and, in effect, collecting a subsidy of €23 per tonne courtesy of the ETS. As a result, Ecocem can no longer compete economically for GGBS supplies.
An Ecocem spokesman said this competitive disadvantage "will inevitably force Ecocem to cease its operations in Ireland, with the loss of 25 jobs, additional CO2 emissions of 270,000 tonnes per annum and additional costs for the Irish taxpayer of €6.2 million per annum".
He said the problem could be resolved by reducing the allocation of carbon allowances to the cement sector to reflect the reality of Ecocem's contribution in reducing CO2 emissions and by allocating allowances to the company and others investing in clean technology.
Since 2003, Ecocem has been operating a plant in Dublin Port, which produces 300,000 tonnes of high-quality cement from GGBS, a recycled by-product of the steel industry; unlike traditional cement manufacturing, it does not require the extraction of natural resources.
The company's "green cement" has been used on well-known projects such as the Boyne bridge and the Luas bridge in Dundrum. It has also been specified by the Office of Public Works and the National Roads Authority for their future construction projects.
With the Government due to decide shortly on the allocations for industry under the next round of the ETS, Ecocem wants the ground rules changed to remove "competitive barriers" in line with an EU rule that the scheme should not discriminate between different enterprises.