The Czechs are demanding a probe for the sale of carbon credits at the Sanjeev Gupta steel plant

A Czech minister has called for an investigation into the sale of carbon emissions allowances by Sanjeev Gupta in the country, and said the metal tycoon company had broken its order not to do so.

Lubomir Zaoral said the Czech Minister of Culture last year a document published on his department’s website that he would request an investigation into the transaction on Friday.

“Today I learned that Liberty Ostrava had broken its order and sold emission allowances in excess of Kcs1bn to Romania on the night of April 29-30,” he said.

The proposal to sell carbon credits has sparked controversy in the Czech Republic, and unions have protested against the plan, fearing the plant would lose funds to modernize its operations.

The conflict raises GFG, a major concern over the fate of Liberty’s parent, as Greensill Capital’s main lender, Greensill Capital, struggled to refinance its operations after it collapsed in March.

GFG has confirmed that the plant has sold 1 million emission awards worth 40 million euros to the group’s sister plant, Liberty Galati, Romania.

“The purchase has been made at the current market price, and will be paid to Liberty Ostrava immediately, with the option to buy the bonuses again at a lower price in the future,” GFG said.

“The initial legal proposal to fund part of the company’s oversupply, with multiple measures to protect Ostrava’s business, was hampered by unions and the Czech government earlier this month,” the GFG added, noting that it has been able to move forward ever since. change the transaction.

The European carbon trading scheme is part of its policies to tackle climate change.

Large pollutants, such as steel, are given a certain amount of carbon for free every year. Credits are tied to individual plants and are given out every February. Companies must provide enough allowances to cover each ton of emissions by the end of April next year.

Liberty Ostrava is now understood to have emission allowances of around Kcs5.6bn. Earlier this month the Financial Times reported that it was facing a sister plant in Romania lack of carbon credit. The market price of these allowances is at an all-time high.

The GFG Alliance, a conglomerate of Gupta metals, bought the country’s largest steelmaker in July 2019 from ArcelorMittal.