Posts Tagged ‘Climate Change’

CSA major source of CO2 emissions in Rio de Janeiro

SBB 14 November Companhia Siderúrgica do Atlântico (CSA) – the new Brazilian slab plant owned by ThyssenKrupp and Vale – is being blamed for a large rise in carbon emissions in Rio de Janeiro, Steel Business Briefing learns from local environmental authorities.

From June 2010 to June 2011, city chiefs estimate 5.7m tonnes of CO2 were released into the atmosphere by CSA’s activities, half the city’s total 11.35m t of CO2 emissions in 2005.

Rio de Janeiro aims to reduce CO2 emissions 8% (from 2005’s CO2 total) by 2012 and the policy on climate change and sustainable development requires emissions to be cut 16% in 2016 and 20% by 2020.

Authorities have yet to decide whether to penalize CSA or if the company can receive its definitive operating license. To date, the mill has functioned with a pre-operation license that expires in September 2012, SBB notes.

Nucor exec says ‘let market drive’ GHG reduction

While integrated steelmakers are very concerned about the direct costs of cap and trade schemes, EAF producers are more worried about the effect on electricity prices.

SBB 7 April Competition and self-directed technological innovation should drive the global steel industry’s efforts to reduce its carbon footprint, not government initiatives, according to a high-ranking Nucor executive.

Speaking on 6 April during Steel Business Briefing’s Green Steel Strategies conference in Brussels, Nucor GM of environmental affairs Steve Rowlan said the US steel industry has already reduced CO2 emissions by some 28-30% since 1990.

“That was not because of any government edict. Competition drives it,” Rowlan said. “We’re looking at more technologies that would make us more efficient. Let the market drive it.”

Controversial climate change legislation that died in the US Congress likely would have resulted in a net temperature reduction of less than 0.1% Celsius. “In statistics, that’s in the chatter,” Rowlan said.

“We’re trading carbon. We’re buying carbon. We’ve got governments involved,” he said. “But in the meantime, nobody’s talking about whether it will make a difference.”

He said various GHG reduction schemes being pursued in the US and abroad could potentially triple electricity rates for steelmakers and other manufacturers.

“We need affordable, reliable and abundant energy. I don’t wish anything bad for the rest of the world, but if they want a cap-and-trade program, more power to them,” Rowlan said. “It takes what would be an otherwise green industry and turns it into a red industry, while we’re not really addressing the problem … if it really exists.”

“You can’t be sustainable if you’re not profitable,” he added. “You can’t be profitable if you’re paying exorbitant amounts for energy.”

EUAs become new form of state support

The idea of allocating fresh EUAs to support a project (in this case the resumption of steel production, safeguarding jobs) may be positive from the economic/commercial angle/employment, but no so constructive if the overall aim of the game is to reduce CO2 emissions, and prevent climate change.

SBB 23 March The Walloon government in Belgium is proposing to allocate 12 million tonnes in carbon credits (EUAs) to ArcelorMittal for the period 2008-2012. The offer is part of the negotiations for restarting blast furnace B in Ougrée in Liège; this was idled in May 2009 but is due to restart in mid-April.

“ArcelorMittal will carefully study the Walloon government’s decision to solve the question of CO2 allowances. This is an important step in the restart and investment plan of the liquid phase,” at the plant, an ArcelorMittal spokesman tells Steel Business Briefing.

Of these 12m t in allowances, the Walloon government has still to decide the exact annual allocation for each year between 2008 and 2012, a spokesperson from the regional environment ministry says. The region will provide these allowances in return for an agreement by the company to invest €110m in environmentally modernising the Liège plant.

ArcelorMittal initially asked the Walloon government for 20m in credits, the government spoksman also tells SBB. There is no deadline at the moment for an agreement to be signed.

Japanese industry claims climate bill burdensome

Japan’s steel industry’s arguments on GHG emissions trading seemingly focus on the cost burden, on specific reduction targets and the government’s consultation procedures. The cost burden may be large, but it should not be any heavier than that born by the EU industry; and similarly the risk of carbon leakage from Japan should also not be a greater problem than for the European steel sector. Elsewhere, specific targets are often requested by industry on the grounds that they reduce uncertainty, so it is strange to see them questioned in this case.

Yomiuri Shimbun 15 March The basic climate bill approved by the Cabinet last week has prompted concerns and criticism from the industrial sector that measures stipulated by the bill may lead to increased burdens on business.

The bill passed by the Cabinet on Friday stipulates measures to deal with global warming, notably a midterm target to cut greenhouse gas emissions by 25 percent from 1990 levels by 2020.

Nine industry organizations, including the Japan Iron and Steel Federation and the Petroleum Association of Japan, issued a joint statement opposing the bill, which said: “We have been opposed to the stipulation of mid- and long-term reductions targets or other individual measures. The Cabinet approval of the basic bill is extremely disappointing.” Masamitsu Sakurai, chairman of the Japan Association of Corporate Executives (Keizai Doyukai), also said in a statement, “The government has failed to provide sufficient explanation about the merits and burdens on the economy and the lives of the public.”

The industrial sector has been intensifying its opposition to the bill because the huge emissions cuts will require companies to scale back industrial activities, which will result in declined earning capacities.

The government has put forth three measures as pillars of a package to tackle global warming: an emissions trading scheme; a new environmental tax on oil and other fossil fuels; and a system under which power companies purchase electricity generated by renewable energy sources at fixed prices……

According to the Japan Business Federation (Nippon Keidanren), the country’s industrial sector emitted about 454 million tons of carbon dioxide in fiscal 2008, a decrease of 10.5 percent from fiscal 1990, partly due to the economic downturn resulting from the global financial crisis. Despite those large cuts in CO2 emissions, the reduction amount is far from the 25 percent goal of the basic climate bill, meaning companies would be required to bear considerable burdens to achieve the target.

Meanwhile, criticism has been leveled against the discussion processes for the bill. As ministers and senior vice ministers from relevant ministries have discussed the bill behind closed doors in principle, there have been few opportunities for industrial circles to state their opinions.

Shoichi Shirahaze and Masahiro Takeishi

Climate change in Australia hits met coal production

How much of the flooding in Queensland is due to climate change? Quite a lot I would say. So we could almost say that the higher quarterly prices facing the Japanese and others and the higher global spot prices (up to $230-240/t) in coking coal prices are due in part to climate change. Of course, strong Chinese imports have also helped!

SBB 9 March The worst flooding in outback Queensland for 120 years could result in a coking coal production loss of up to 10m tonnes, industry sources estimate. Though the heavy rain has not so far fallen directly in the Bowen Basin – the state’s metallurgical coal producing region – rail lines used to transport coal to the port at Dalrymple Bay are under water.

Anglo American Metallurgical Coal spokeswoman Jacqui Strambi told Steel Business Briefing that the met coal industry estimated that output of 5-10m t had been lost due to the flooding. The Blackwater railway system, the state’s second largest transporter of coal after the Goonyella line, has been closed for more than a week. The Moura line is also closed, while other rail links are operating at reduced capacity. SBB understands that Anglo American halted operations at two of its Queensland mines.

A spokeswoman for major producer BHP Billiton-Mitsubishi Alliance said there had been no impact to date from the weather on production at the company’s operations in the Bowen Basin. But there had been reduced rail service since February because of earlier rain.

With the floodwaters in Queensland still to subside and more damage to infrastructure expected, tighter supply of coking coal could push spot prices closer to $240/t from around $230/t currently. In its latest commodities report, Macquarie said new export supply from US producers could come on stream in the third quarter of this year but prices are likely to be “extremely tight” in the April-June quarter.

Australia exported 135m tonnes of met coal last year and is forecast to ship 150m t in 2010.