The 17 June 2008 summit was the setting for a presentation by Alan Thomas, who is the general manager of engineering, technology and environment at BlueScope Steel.
In the presentation, he focused on the factors the steel industry faces if Australia decides to reduce greenhouse gas emissions and engage in a national emissions trading scheme.
The steel industry is a global trade. In 2006, 1.25b tonnes of steel were produced, of which 417m tonnes were exported from Australia. It is seeing continued strong growth in developing countries, and a recycling rate of 79%.
By its nature, steel production is an energy- and greenhouse-intensive technology, which emits 3.2% of global greenhouse gases. There is currently no alternative technology.
BlueScope Steel and One Steel are currently two major steel makers in Australia, producing 7.9m tonnes per annum, or less than 0.6% of global production. Greenhouse gases are emitted in three processes involved in steel making.
The chemical reduction of iron ore produces carbon monoxide and carbon dioxide. Recycling scrap is electricity intensive, and rolling and processing steel is energy intensive.
Industry measurements indicate 80% of current emissions are fixed and the result of the production technology. These emissions cannot currently be avoided when making steel.
Due to the small scale of the steel industry in Australia competing with the global producers, BlueScope was not confident it could pass on its “carbon cost” to customers. If Australia reduces its greenhouse gas emissions before international action, the local steel industry would lose its competitive edge, and growth would be constrained.
There is also a danger of a shift in the steelmaking industry offshore, which will not result in emission cuts. As a result, the company requested for free allocation of permits under the emissions trading scheme until there is a technology breakthrough or international steel producers are also subject to carbon trading.
Meanwhile, it claims the industry has already achieved emissions close to technical minimum, improved equipment efficiency, and invested in capturing and using waste heat or waste process gases.