Holcim mulls next move after EU court rejects carbon theft lawsuit
By Michael Szabo
LONDON (Reuters) - European cement maker Holcim is mulling its options after the European Union's top court dismissed its lawsuit against the European Commission over the theft of 1.6 million emissions allowances in 2010.
The European Court of Justice (ECJ) on Sept. 18 said it had rejected Holcim's arguments that the Commission should compensate the firm for around 17.6 million euros (13.79 million pounds) for damages suffered when the online carbon trading account of its Romanian subsidiary was hacked.
In its judgment, the court ruled that Holcim must bear the losses resulting from the thefts as well as pay the Commission's legal costs in the case, which were not disclosed.
"Holcim has taken note of the General Court's judgement ... (and) we are currently analysing the decision in more detail and cannot comment any further," a Holcim spokeswoman said by email on Friday.
Cyber criminals in November 2010 hacked into Holcim's account at the Romanian emissions trading registry - previously one of around 30 online trading hubs in the EU carbon market - and transferred 1.6 million so-called EU Allowances to two accounts at the Italian and Liechtenstein registries.
According to EU records, the allowances then within hours passed through registry accounts in Britain, France, the Netherlands and the Czech Republic, before eventually being sold on emissions exchanges in Paris and Amsterdam.
Around 695,000 allowances were later returned to Holcim by various European authorities, but the company's spokeswoman said the remaining units have still not been recovered.
Holcim sued the Commission, which administers the bloc’s electronic emissions trading network, in 2012 for failing to freeze the accounts containing the stolen units, for not returning them and for allowing other companies to turn them in for compliance under the EU Emissions Trading System (ETS).
The Commission refused to reveal the location of the allowances, saying that under EU law the details were confidential and could only be passed to European authorities.
"The Commission has no powers to block any such allowances in a registry account ... (and) concerning your request to stop any transfer of allowances ... such action would be disproportionate and lacks legal base," the EU executive said in a Dec. 14, 2010 letter to Holcim, according to the ECJ judgment.
Several European companies including International Power and ScottishPower have since surrendered some of the units to comply with the ETS, but claimed they bought them in good faith without knowing that they had been reported stolen.
Holcim had claimed the EU should pay it the value of any allowances still missing, based on the market price on Nov. 16, 2010 - the day of the theft - plus annual interest of 8 percent.
That amounts to more than 17.6 million euros, based on a spot allowance price of 14.60 euros per unit.
Holcim has also sued Romania's National Environmental Protection Agency (NEPA) over similar claims.
"The court case against NEPA has been suspended by the civil court until DIICOT (Romanian law enforcement agency) finalises the criminal investigation, but as of now we have no indication as to when this might happen," the Holcim spokeswoman said.
Holcim is one of the world's biggest cement producers and one of the EU's top emitters.
The firm's outstanding allowances would be worth around 5.1 million euros based on current market prices, which have fallen by almost two-thirds since the thefts due to chronic oversupply and the euro zone's economic malaise.
(Editing by Michael Urquhart)
