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BlueScope Steel Calls for Global Response on Carbon

09/15/2008 - BlueScope Steel calls on Australia’s Federal Government to ensure that its Carbon Pollution Reduction Scheme maintains the continued viability of Australia's iron and steel industry against international competitors.

BlueScope Steel has called on Australia’s Federal Government to ensure that its Carbon Pollution Reduction Scheme (CPRS) maintains the continued viability of Australia's iron and steel industry against international competitors.
 
The dialogue was part of a speech made by BlueScope Steel Managing Director and CEO, Paul O'Malley to the American Chamber of Commerce in Australia. O'Malley said an effective CPRS must meet five imperatives:
 
  1. Recognizing technological constraints to reducing emissions from iron and steelmaking.
  2. Classifying iron and steel manufacturing activities as emission-intensive trade-exposed (EITE).
  3. Allowing for expected growth in demand for steel products.
  4. Basing transitional assistance for EITE activities on the total financial impact of the CPRS.
  5. A level playing field ensuring the withdrawal of assistance only after enforceable carbon constraints are implemented amongst international competitors.
O'Malley commended the Australian Government for the extensive consultation they have undertaken to date with industry, and said he supported the government's objective to reduce global greenhouse gas emissions.
 
“Reducing greenhouse gas emissions is a global problem that requires a global response,” commented O’Malley. “BlueScope recognizes the role of the Australian iron and steel industry, along with other sectors of the Australian economy, and the global industry, in transitioning to a low emissions economy in a sustainable and economically responsible way," he continued.
 
“The introduction of a domestic emissions trading scheme is the single most important public policy issue currently facing the Australian iron and steel industry,” added O’Malley. “While we support the Government's policy objectives, we believe that the policy framework, as currently proposed in the CPRS Green Paper, may risk imposing substantial new costs on the Australian iron and steel industry that are not faced by our major international competitors. This has the potential to constrain our industry's ability to invest and, over time, cause carbon leakage and a net increase in global emissions.”
 
To be effective and sustainable, BlueScope Steel believes that the CPRS must be designed according to the following key principles:
 
  • Contributes to a global reduction in greenhouse gas (GHG) emissions.
  • Prevents carbon leakage, in which emissions are simply transferred offshore with no net global reduction or, worse still, increase.
  • Is economically responsible and moves in step with effective and enforceable global carbon constraints.
  • Encourages a level of abatement by industry that is technically and financially feasible rather than simply acting as a deadweight burden.
  • Provides short and medium term policy certainty that encourages investment in long-lived assets, including capital investment in GHG abatement projects.
  • Incorporates transitional assistance for EITE activities at a level and duration that does not damage the competitiveness of the iron and steel industry in domestic and export markets.
  • Allows for growth in domestic steel production as government and industry invest to overcome the backlog of critical infrastructure and to service Australia's growing economy and population.
“BlueScope Steel looks forward to further consultation with the Federal Government as it finalizes the CPRS policy framework," concluded O'Malley.