CF Fertilisers received £32m for carbon after site closure

Fertiliser manufacturer CF Fertilisers UK, a subsidiary of CF Industries, has sold millions of pounds worth of carbon credits awarded to it by the UK government through the Emissions Trading System (ETS).

Free carbon allowances were granted through the ETS scheme to provide an incentive for businesses to reduce emissions.

The scheme was launched in January 2021 to replace the UK’s participation in the EU Emissions Trading Scheme, and was designed to encourage large emitting businesses such as factories and airlines to cut their emissions.

See also: CF Fertilisers UK plans to close ammonia plant at Billingham

Under the scheme, companies are given a set allocation of carbon credits each year.

If a business uses more than its allotted number of credits – by emitting more carbon – it needs to purchase more credits on the carbon market, but if it is able to reduce its emissions and produce less carbon, it can sell the surplus credits to other companies.

CF Industries was allocated an allowance for operating its large fertiliser production sites at Billingham and Ince.

It received a total allocation of 601,567 credits in 2021 and 488,602 in 2022 by the Department for Energy Security and Net Zero and the Department for Business, Energy & Industrial Strategy.

The company shut its Ince site in 2022, which resulted in more than 300 job losses. It was then able to sell off its carbon credits at a significant profit.

The Financial Times reported that CF recorded a 481,848-unit surplus in 2022 at its Ince site, worth £37.6m based on an average 2022 price of £78 a unit, and has generated £32m from sales of emission credits so far in 2023.

Farmers Weekly contacted CF Industries for comment but the company did not respond.

The company also announced the closure of its Billingham site in July 2023, increasing the UK’s reliance on imported ammonium nitrate products.