SBB 25 April The merits of the European Union’s Emissions Trading System and other carbon reduction initiatives generated a spirited debate during Platts Steel Business Briefing’s third-annual Green Steel Strategies conference in Berlin.
A panel including; Steve Rowlan, Nucor’s gm of environmental affairs; Baroness Worthington, a member of British Parliament and founder of Sandbag; Christopher Beauman, senior adviser to the European Bank for Reconstruction and Development; and Mike Romano, vp of strategic accounts for NALCO; discussed the challenges of operating under current and proposed mandates.
Worthington argued a number of European steelmakers are “sitting on a large set of allowances” under the EU’s carbon trading scheme, as emissions have been below previous estimates.
Some say that’s simply due to reduced steel production amid the recessionary economic climate, and when one panelist questioned whether steel producers believe in the initiative, Worthington fired back: “It’s not whether you believe in it or not. It’s not a ghost or God. It’s actually a functioning policy that’s in place right now to bring carbon [emissions} down.”
Many involved in European carbon trading argue there should be intervention to prop up the sagging carbon price (a result of surplus emissions), such as a set-aside of allowances, as low prices do nothing to spur investment into new technology.
European steelmakers have told Platts SBB there should be no “manipulation” of the market, which is just designed to cut emissions.
Rowlan said cap-and-trade initiatives like those in place in Europe and being considered in the US put steelmakers at a cost disadvantage to competitors in regions without such policies. “To an industry that wants to be competitive, it is all about cost,” he said. “How does the steel industry survive?”
Beauman conceded higher costs “are inevitable” in the effort to reduce global CO2. “The question is at what spread and at what fairness?” he said.
Still, Romano said unproven and costly technologies like carbon sequestration aren’t the answer in the near term. “The technologies aren’t coming to the forefront in the next five years,” he said.