Race to set carbon record straight
T HE global steel industry faces a major challenge to reduce its carbon footprint, but seems increasingly unlikely to do so because of the large growth in its Chinese and other developing world operations.
New evidence given to the US Congress by the American iron and steel industry claims that the largest global steel producer, China, is emitting as much as four to five tonnes of greenhouse gases for every tonne of metal it makes rather than the 2.5 tonnes claimed in international reports.
The American Iron & Steel Institute and the Steel Manufacturers Association have told the US House of Representatives energy and commerce committee that global steel industry emissions now average 1.7 tonnes per production unit, held down by their members achieving an average of as little as 1.2 tonnes.
But the Chinese steelmakers, the lobbyists say, are still relying on many older, inefficient plants for production.
China is officially reported to be responsible for more than a billion tonnes of greenhouse gas emissions a year from steel production — which totalled more than 420 million tonnes in 2006 — and the American industry claims, if correct, would set the true level at more than 1.5 billion tonnes ( or nearly treble the total Australian emissions from all sources).
The situation, it claims, is going to get worse because Chinese steel production is increasing at frantic pace — last year Chinese operators installed 61 million tonnes of new steelmaking capacity and are expected to bring another 55 million tonnes of capacity on line this year. The entire US steel industry is able to produce 100 million tonnes a year.
The US producers have double- edged reasons for pushing their argument: they are seeking to ward off domestic carbon charges and they are competing with the Chinese steelmakers for US sales. Chinese companies are the second largest source of US steel imports.
There is an added impetus for the American producers in the move by the Chinese government to ensure that older, more inefficient blast furnaces are replaced by larger, technologically advanced ones in a massive expansion of steelmaking capacity over the next few years. The US iron and steel lobby argues that its members have been in the forefront of American business efforts to be more efficient users of energy and to reduce the growth of the country’s greenhouse gas emissions. They point to cutting back emissions from their activities from more than 86 million tonnes a year in 1990 to about 46 million tonnes annually today even though their output is 7 per cent higher. It attributes the gains principally to the high rate of recycling it has achieved.
The steel industry accounts now for about 2 per cent of US greenhouse gas emissions.
The American industry argues that a move towards domestic charges will send some of its producers out of business, leaking’’ production to less efficient steelmakers overseas in China, Russia and Brazil and have exactly the opposite global emissions result from the one sought by scientists, environmentalists and the UN.
The industry is pushing for the US to embrace a system of carbon intensity standards’’ that would set an upper limit on the greenhouse gases emitted for every tonne of steel consumed in the US, whether domestically produced or imported. Critics claim such a system may lead to global trade tensions because foreign steel producers would see it as protectionism masquerading as environmentalism.
The industry is also using its high recycling rate as another argument against punitive carbon charges, claiming that the US steel sector recycles its product at a higher rate than the aluminium, paper, plastic and glass manufacturers combined. There is virtually no end, it argues, to steel being recycled, re- melted and re- used. In any emissions trading scheme, says the American Iron and Steel Institute, its members should receive bonus permit allocations to recognise existing recycling. The Institute says its members are being disadvantaged in global competition by the sharp recent increases in US electricity prices, as are the European steelmakers by the EU emissions trading scheme.