EMISSIONS AND ENERGY EFFICIENCY

• We regard climate change as a global issue that requires a global response. BlueScope is focused on reducing its energy consumption and carbon emissions. We support policies that reduce carbon emissions, provided such policies do not compromise international competitiveness.
  BlueScope operates two integrated steelmaking plants, one in Australia, and one in New Zealand. Integrated steelmaking is inherently emissionsintensive as coal and coke are used as both chemical reductants and energy sources in the iron making process. This chemical process accounts for more than 80 per cent of the energy consumed and greenhouse gas emissions. While electric arc furnaces (such as North Star BlueScope Steel) can melt scrap steel to make new steel at lower emissions-intensity than blast furnaces, there is only enough scrap in the world to meet part of the demand for new steel. This means that the manufacture of raw steel from iron ore and coal will be a central part of the world’s steel industry for the foreseeable future.
  While many steelmakers, including BlueScope, have made incremental improvements in energy and emissions intensity, the industry is yet to develop and commercialise technology that would permanently and materially reduce emissions from the integrated steelmaking process.
  BlueScope has in the past invested in such research and development efforts with the Australian Government’s Commonwealth Scientific and Industrial Research Organisation (CSIRO), and regularly shares information about technology developments with its industry counterparts worldwide. However, commercial breakthroughs are likely to be many years away.

  
  

• The Company’s Australian emissions have fallen by almost 40 per cent since the closure of the No.6 Blast Furnace at Port Kembla Steelworks in 2011. Combined Scope 1 and 2 emissions have fallen by six million tonnes (CO2-equivalent) per annum, or a cumulative reduction of 29 million tonnes to the end of FY2016. This is a significant reduction in the context of Australia’s GHG emissions abatement targets.
  According to the World Steel Association’s CO2 emissions database, BlueScope’s Australian integrated steelmaking facility, Port Kembla Steelworks, sits just outside the top one-third of plants surveyed for carbon efficiency (number 23 out of 61 plants), with emissions of approximately 2.16 tonnes (CO2 equivalent) per tonne of steel manufactured.
  During FY2016, BlueScope undertook a careful review of a potential closure of our primary steelmaking operations at Port Kembla Steelworks. Such a move would have significantly reduced the Company’s emissions. However, it would also have meant that we would need to procure feedstock from foreign steel suppliers, quite possibly from facilities with higher emissions intensity. Moreover, such a closure would have led to the loss of an estimated 4,500 job and resultant severe disruption to the local community. Instead, employees, the community and the NSW Government rallied around the cause of delivering productivity improvements and cost reductions and we have been able to continue steelmaking at Port Kembla. BlueScope’s view is that the objective of reducing Australia’s greenhouse gas emissions must be considered in a global context, and balanced against the need to maintain employment, economic activity and social cohesion.