UNSCRUPULOUS companies have been pocketing tens of millions of pounds in unused carbon credits by closing or idling factories, a Greenpeace investigation has found.

Britain’s biggest fertiliser producer CF Industries made nearly £70m from the loophole in the government decarbonisation scheme after shutting its factories in Cheshire and Teeside, the campaign group said.

Mitsubishi Chemical, one of the world’s largest chemical producers, similarly made about £12m after closing its idle Cassel Works chemical plant in Billingham, Teesside, at the end of May this year, making 205 staff redundant, its probe found.

Greenpeace UK’s policy director Dr Doug Parr said: “This is an absurd loophole that the government can and should close.

“This scheme is supposed to reward businesses that make genuine efforts to clean up their operations, not give carbon freebies to firms who shut down plants.”

Britain’s emissions trading scheme (ETS) is a government-run cap and trade system designed to reward firms that cut emissions from their operations.

Greenpeace’s Unearthed unit found that the US fertiliser giant, CF, received hundreds of thousands of unused carbon credits under ETS after closing its factory in Ince, Cheshire, last June, with the loss of 350 jobs, as its annual emissions were much lower for 2022 than the previous year.

Last July, the company also announced that it would close its ammonia plant in Billingham after the facility had been idle since the previous September, causing 38 job losses.

There is nothing stopping firms selling unused credits generated from closing a factory and the government has no way to claw back unused credits once they have been allocated to a company under the scheme’s rules, Unearthed found.

This left CF free to sell the Ince facility’s leftover 630,000 credits from 2021 and 2022 and the 249,000 leftover credits from the Billingham site.

The unused carbon credits were respectively worth £49m and £19.4m at the average carbon price in Britain from last year, with its latest company filings showing CF made £32m from the sale of carbon credits via ETS.

Labour MP for Stockton North Alex Cunningham said: “The government should look to close these loopholes immediately, and put a stop to this shameful profiteering on the back of lost livelihoods.”

The Department for Energy Security and Net Zero said that it was reviewing free allocation rules.

The Morning Star contacted both companies for comment.