Posts Tagged ‘Japan’

Eurofer: EC must promote investment, not cripple industry

Eurofer is planning to take legal action against the European Commission’s proposed emissions benchmarks. However, if this fails it will be time to consider how the industry can weather the added costs. SBB’s Green Steel Strategies conference looked at a number of approaches. More stories from the conference will follow shortly.

SBB 6 April The European steel industry could lose its lead in technology to Japan or China if European Union policy fails to encourage further investment in the industry, argues Eurofer director general Gordon Moffat. Speaking at Steel Business Briefing’s Green Steel Strategies summit in Brussels, he added that EU policy is in danger of crippling the industry.

The main threat comes from the implementation of the Emissions Trading Scheme (ETS), Moffat says. The scheme is not being executed as intended, he alleges. The European Commission was meant to set benchmarks for free carbon credit allowances, allowing the most efficient European plants to avoid any significant additional costs.

However, the proposed benchmarks are unachievable by even the most efficient steelmakers, Eurofer claims and the organisation plans to take the European Commission to court over the benchmarks, as previously reported by SBB.

The industry would have faced a 15% shortfall in carbon credits if the benchmarks had been set at levels recommended by Eurofer, Moffat says. The EC’s benchmarks are likely to result in an €11bn cost to the steel industry in 2013-2020, Eurofer estimates.

Moffat also raised the issue of higher electricity prices as a result of the ETS. The EC has allowed member states to give some compensation to industry. However, guidelines have not been set and Eurofer is concer,ned that the EC will not recommend full compensation, he adds.

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JFE’s hopes for cheap large-scale carbon capture by 2015

Many heavily polluting industries are relying on carbon capture and storage to reduce their greenhouse gas emissions in the medium term. However, the process is currently prohibitively expensive. A number of steelmakers and therefore conducting research into new, cheaper, processes for isolating the carbon dioxide in their emissions.

SBB 22 November 2010 Japan’s JFE Engineering has completed tests on a new carbon capture and storage (CCS) method which could cut costs by half. The steel group now hopes to carry out a larger test which would seek to capture several thousand tonnes a day of CO2, Steel Business Briefing learns from a source close to the company.

The new method, which has been developed jointly by JFE Engineering and the New Energy & Industrial Development Organisation (NEDO), could cut costs by around ¥2,500 ($30) per tonne of CO2, or about half, JFE claims.

The company hopes the method could become commercially viable in just five years time. Tests have so far been conducted at a rate of 3 t/d but a second test phase of several thousand t/d and a third phase of tens of thousands of t/d are already being talked of.

However, funding to continue the project has not yet been secured nor has a site for further testing been chosen, SBB understands. JFE Steel is the country’s second largest steelmaker and a prime candidate for CCS. However, the company did not respond to questions by SBB’s publishing deadline.

Nippon Steel is also researching CCS technology as part of the Course50 low-carbon dioxide steelmaking research project in collaboration with NEDO, SBB notes.

Japan’s steel sector cuts CO2 emissions by 6% in 2009/10

SBB 18 November 2010 Amid debate in Japan over carbon taxes and trading schemes, the Japan Iron & Steel Federation (JISF) says that the country’s steel industry emitted 165.6m tonnes of carbon dioxide last fiscal year, a 6% dip on the 2008 figure and a 17.5% drop on the benchmark fiscal 1990 total. The steel sector’s energy consumption also fell by 17.2% from 1990.

“CO2 emissions last year declined significantly mainly because of the large drop in crude steel output,” a JISF spokesman tells Steel Business Briefing. Japan’s crude steel output in the year to last March reached 93.7mt – a decrease of 10.5% from the 1990 total.

Japan’s steel industry is “voluntarily” cutting energy consumption by an average of 10% during fiscals 2008-2012 compared with 1990 levels, and CO2 emissions by 9% on the premise of 100m t/y of raw steel output.

By undertaking reduction schemes voluntarily, the steelmakers hope to dissuade the government from setting mandatory targets supported by fines and penalties, SBB notes.

The 2008-2009 reductions in emissions of 12.2% and 17.5% respectively from 1990 greatly exceeded the JISF’s target. “But steel output has been recovering and cutting CO2 emissions by 9% over the five years [to 2012] won’t be easy,” the JISF spokesman admitted. Japan’s crude steel output in April-September was up 28% year-on-year at 55.42m t.

The JISF says that outside of the voluntary scheme its members will continue “maximizing” energy savings and emissions reductions by supplying high-quality steel products to end-users to reduce CO2 emissions over the product life cycle.

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