China’s crude steel production heads downhill
Nations to cut public finance MEMBERS of the Organisation for Economic Co-operation and Development (OECD) struck an agreement on Tuesday to scale back public financing for coal-fired power plants, dealing another blow to the industry ahead of a global summit on climate change in Paris.
Under the agreement, detailed by the White House in a conference call, the world’s richest economies will restrict subsidies that help companies export technology to build coalfired power plants, among the largest sources of emissions blamed for climate change. The policy would cut off financing for 85 percent of coal projects going forward, according to a senior administration official.
Major lenders including the US Import-Export Bank, the World Bank, and the European Investment Bank have already cut support for coal projects. The new agreement among the 34 OECD nations means countries including Japan and South Korea will for the first time restrict their funding. It is more bad news for a coal industry hit by falling global prices, new environmental rules and slowing growth in China.
The deal is also a victory for US President Barack Obama, whose domestic climate policies remain under attack. The Republican-led US Senate voted on Tuesday to block new rules on power-plant pollution, saying they would be too costly.
According to an analysis by the World Resources Institute in Washington, some 1 200 coalfired plants have been proposed to be built worldwide. More than 900 are in India and China.
Climate change
“Climate change is one of the greatest challenges of our time,” OECD nations said in a communique on Tuesday. “We reaffirm our commitment to rationalise and phase out fossil fuel subsidies that encourage wasteful consumption.”
Obama’s administration has sought the financing change for years but faced opposition by Japan, which objected to cutting subsidies benefiting its technology exporters, including Toshiba. The breakthrough came earlier this year when the two agreed to a deal to allow some financing to continue.
Japan is the biggest backer of public coal financing globally, according to a June report co-authored by the Natural Resources Defense Council and partners. The country also ranks last among Group of Seven nations in efforts to move away from coal, according to a statement last month from E3G, a non-profit group promoting a low-carbon economy.
The new policy, which will take effect in a year, would provide subsidies only for so-called ultra-supercritical coal-fired power plants – those built to the most stringent environmental standards. The Obama administration estimates that 85 percent of coal power plants will CRUDE steel production in China will collapse by 23 million tons next year, according to the nation’s leading industry group. That is equivalent to more than a quarter of annual output from the US.
Supply from the top producer may drop 2.9 percent to about 783 million tons from 806 million tons this year, be ineligible for financing from OECD countries going forward.
Financing restrictions would again tighten in four years under the agreement.
The official said OECD financing had helped the purchase of more than $35 billion (R497bn) in coal products over the past seven years.
The deal was welcomed by Japanese environmental activists, but with some worry.
“This agreement is an important step forward as the according to the China Iron & Steel Association. The slump would be driven by a deepening downturn in local demand and as mills encounter stiffer opposition to exports, deputy secretary-general Li Xinchuang said yesterday.
“You can’t find any bright spots,” Li said in Shanghai, citing weakness across Asia’s OECD has set the tone to restrict new coal power plants globally,” the Center for a Sustainable Environment and Society, the Kiko Network and Friends of the Earth Japan, said in a statement. “Even ultra super critical plants emit about twice as much carbon as plants powered by natural gas, so revisions at an early date are needed to make support for coal power be excluded in principle.”
The deal represents the culmination of months of talks, largest economy. “Property developments used to enjoy annual growth of 20 percent and now at best it is 5 percent.
“Infrastructure investments haven’t taken off due to lack of funds despite of all the planned numbers of projects. Manufacturing investments have also dropped like a stone.”
China’s mills, which produce and comes after negotiators from South Korea and Australia were able to secure an exception allowing the construction of small coal plants in developing countries that do not meet the most stringent environmental standards. The official said the concession was immaterial to the overall deal.
“Our position has been that the promotion of highlyefficient coal power generation is an effective and realistic measure to tackle climate about half of worldwide output, are battling against losses, oversupply and sinking prices as local consumption shrinks for the first time in a generation.
The fallout from the steelmakers’ struggles is hurting iron ore prices and boosting trade tensions as mills seek to sell their surplus overseas. – Bloomberg change,” an official at Japan’s foreign ministry said. “We welcome the agreement as Japan’s position has been sufficiently reflected in the agreement.”
The announcement comes two weeks before world leaders are scheduled to gather in Paris for global climate negotiations. The talks among almost 200 nations may culminate in the first agreement committing all countries to rein in carbon pollution from coal and other sources. – Bloomberg