Global steel producers are beginning to warm
to the challenges presented by climate change.
The topic of climate change-or global warming
to those looking to pick a fight-received considerable
attention at the annual meetings of the American Iron and Steel
Institute and the Metals Service Center Institute. It gained
even more steam, and some action, at the annual meeting of the
International Iron and Steel Institute (IISI) in Berlin in
All three organizations as well as many
others-including the Steel Manufacturers Association, the
Specialty Steel Industry of North America, the Canadian Steel
Producers Association, the Mexican Steel Producers Association
and the Latin American Iron and Steel Institute-have raised
climate change to a priority challenge for 2008 and beyond.
Members of the six American steel
associations met in Miami in October to discuss trade and
policy issues and establish an agreement to cooperate in the
future on climate change issues. "We support the development of
a global sectoral approach to climate change in which all major
steel-producing countries, including China and India,
contribute to a global solution to the climate change
challenge," the organizations said. They also agreed to meet at
least once per year to review progress being made on climate
change and trade issues.
The IISI made seven climate change policy
commitments in March and followed them at its October meeting
by endorsing a global approach as the best way for steel to
help address climate change. The IISI board of directors
approved what it called "the next stage" in the establishment
of a Global Sectoral Approach for Steel, including the
collection and reporting of carbon dioxide emissions data for
steel plants in all major steel-producing countries. The
organization of data on a common and consistent basis would be
"the starting point" for setting commitments post-2012 on a
national or regional basis.
While most people in the steel industry agree
that climate change initiatives are crucial to the planet's
future, there is disagreement on policies.
John P. Surma, chairman and president of U.S.
Steel Corp., Pittsburgh, is opposed to a cap-and-trade program
for emissions for U.S. companies similar to what is in place in
Europe. Surma and other U.S. steel executives believe that such
a strategy would hinder not only steel but other manufacturing
industries from being able to compete globally.
Some of the world's biggest aluminum
producers take the opposing view, and how that will play out
for U.S. steelmakers is anyone's guess at this stage (see
related story, page 60).
The IISI said steel is well on its way to
success already, noting that major technological advances in
North America, Western Europe and Japan have reduced energy
consumption per unit of production by 49 percent in the past 25
years. At the same time, there has been a dramatic expansion in
global steel production such that the steel industry now
accounts for 3 to 4 percent of man-made greenhouse gas
emissions. More than 90 percent of steel industry emissions
come from nine regions Brazil, China, the European Union,
India, Japan, South Korea, Russia, Ukraine and the United
In the case of the United States, there are
indications that some form of global warming initiatives may
emerge from Congress. One industry consultant warned in late
October that the U.S. steel industry should prepare for federal
legislation, perhaps a cap-and-trade system, some time after
the 2008 presidential election.
The IISI maintains that cap and trade is not
the answer. "Cap-and-trade regional policies such as those
currently used in the E.U. are not effective in reducing carbon
dioxide emissions," said Phillippe Varin, a member of IISI's
executive committee and chief executive officer of Corus Group
Ltd. "Constraining production from the best emission performing
plants is not the solution for a globally competitive industry
such as steel. An effective approach for the steel industry
requires the participation of all major steel-producing
countries and a focus on improving emissions per unit of
"In the near term, the steel industry's major
contribution will be in the wider application of current best
practice and technology. For the longer term, the steel
industry is investing in research on the development of
breakthrough steelmaking technologies. This is still in the
context of the essential contribution that steel, the most
recycled modern material, now makes in sustainable housing and
construction, clean energy and transportation," Varin said.