Producing iron and steel leads to emissions of greenhouse gases. In an integrated steelworks – such as Port Kembla - carbon, in the form of coal and coke, is used as a reducing agent to convert iron ore to metallic iron in a blast furnace. Greenhouse gases, predominantly carbon dioxide, are produced as an unavoidable by-product of this process.
In a number of the countries in which BlueScope operates, governments have put a cost on emissions of greenhouse gases. For example, Emissions Trading Schemes are in operation in New Zealand and Australia. In other countries and regions, regulatory action is being taken to manage GHG emissions.
BlueScope has developed the following greenhouse gas policy principles against which it will assess policies aimed at reducing GHG emissions.
Global issue - Reducing greenhouse gas emissions is a global problem that requires a global approach.
Least cost - Australia should adopt policy that achieves emissions targets at least cost.
Fair go - The competitiveness and financial viability of Australia’s trade exposed steel industry must not be eroded. We cannot place our industries at a disadvantage to the rest of the world. Transitional measures for trade exposed industries - including the steel industry - will be essential for as long as our global competitors (India, China, US, Japan, Korea and Taiwan) do not face comparable carbon costs.
Cut green tape - A single national carbon policy should be the goal of governments. Complementary policy measures adopted by Federal and State governments must be effective, least cost and address recognised market failures. These policies must avoid market distortions or perverse incentives, overlap and unnecessary compliance costs and regulatory burden.
Reinvest - Revenue raised by a carbon price should be earmarked for investment in greenhouse gas abatement and assistance for households and industry. Policy should provide incentives for research & development and investment in abatement, including appropriate recognition for early movers.
No leakage - Policy must not lead to carbon leakage, by which Australian production is simply replaced by foreign production that may, in fact, be less carbon efficient.
