Metals Forum
"Metals
Forum" appears monthly in American Metal
Market addressing issues of concern to the metals
community.
If the
U.S. can produce clean steel,
China should
too
By Terrence D. Straub
Senior Vice President, United States Steel Corporation
May/June 2009
China is
now the world’s leading industrial producer of carbon dioxide. It
is also, as a new report by the Alliance for
American Manufacturing (AAM) makes clear, riddled with terrible
environmental pollution throughout its steel industry (www.americanmanufacturing.org/assessment-of-china). Despite worsening air and water
conditions throughout much of the nation, Beijing has shown
a repeated lack of will to impose reasonable emission regulations on
provincial and local governments. The bottom line is this: looking at
current discussions on global climate change, there’s little to
suggest that Beijing will address the issue in any effective
manner.
Recently, the
U.S. House Ways and Means Committee held hearings on climate issues, and
China was a key subject. China possesses the world’s fastest-growing steel industry, but
this rapid growth has brought with it ineffective enforcement of weak
pollution-control standards, a failure to use adequate
pollution-prevention measures and such high levels of pollution that the
World Bank now estimates 99 percent of the 540 million Chinese who live
in urban areas are breathing unsafe air.
At U.S. Steel, we argue that
a real climate change solution cannot be achieved unless the White House
and Congress hold China accountable for its reckless environmental
practices.
United Steelworkers union
president Leo Gerard cited the AAM report during recent congressional
hearings, and at U.S. Steel we agree that any carbon discussion must
adequately recognize the serious flaws in China’s emission controls and the damage it is doing to human
health and global efforts to address climate change.
We consider AAM’s
research to be extensive and sound. It was conducted with help from a
team of environmental and legal experts, including investigators working
in China.
The report, An Assessment
of Environmental Regulation in the Steel Industry in
China, suggests that China’s steel industry is not only harming the health of its
own people, but spreading pollution around the world and contributing to
global warming.
Paradoxically,
China benefits economically from its failure to control pollution,
giving it a significant advantage over its foreign competitors.
Specifically, because China has low environmental standards and lax enforcement,
U.S. mills in recent years have had to spend 80 percent more than
their Chinese counterparts per ton of steel produced to control air and
water pollution. Estimates suggest that Chinese steelmakers would have
to triple or quadruple their capital expenditures on pollution control
equipment to reduce emissions to U.S. levels.
China’s production of steel has quadrupled this decade, making
it by far the world’s largest source of steel. It now produces
more than the United
States,
Russia and
Japan combined. And while China produces one-third of the world’s steel, it is
responsible for half of the world’s carbon dioxide from
steelmaking, making it the leading contributor to global warming.
U.S. steel producers
are far more efficient, producing 1.2 tons of carbon dioxide per ton of
steel produced compared with an official estimate of 2.5 tons in
China (which actually might be as high as 4 tons according to
unofficial estimates).
Propelled by rapid expansion
and low environmental standards, China also has become one of the world’s biggest polluters,
producing more sulfur dioxide than any other country.
Although both the Chinese
government and leading companies in the steel industry claim they want
to address the country’s environmental problems, the levels of
pollution are still three to 20 times higher per ton of steel produced
in China than in
the U.S.,
depending on the specific pollutant and industrial process
analyzed.
American jobs also are at
stake due to the inequities of environmental standards for Chinese steel
production. Perhaps the most glaring example of the huge gap between
environmental protection in China and the United
States is the
resources and personnel devoted to regulation and enforcement.
China’s
Ministry of Environmental Protection (MEP) has only about 300 employees
compared with 18,000 who work for its U.S. counterpart, the Environmental Protection Agency
(EPA).
With few employees, most of
whom are confined to Beijing, MEP
relies on provincial and local governments to implement generally vague
environmental laws. But these local entities often give higher priority
to economic growth and employment.
Even if
China’s
environmental infrastructure were sound, its air and water pollution
standards applicable to the steel industry are far less stringent than
in the United
States. For
existing equipment in integrated steel mills, emission-control standards
for particulate matter, for example, are from two to six times more
stringent in the United
States, depending
on the steelmaking process. Chinese limits on sulfur dioxide are so low
that most companies do not need additional pollution-control equipment
to meet them.
The AAM report found that
“the Chinese steel industry operates in an environment in which
enforcement of existing standards is weak, the permit system is
ineffective and facilities do not do an adequate job of monitoring their
emissions and discharges. Financial penalties for violations are too low
to have a substantial different effect.” For example, the maximum
fine for non-compliance in China is
$14,000 for most violations, and repeated violations don’t
necessarily lead to additional penalties. In contrast, American
companies may incur penalties of as much as $32,500 per
day.
Other factors contributing to
Chinese steel industry pollution include higher use of energy (20
percent more energy consumed per ton of steel produced than the
international average), a heavy reliance on coal to produce that energy,
a large number of smaller steel companies and low use of recycled
steel.
It’s also misleading
to compare Chinese steel industry practices to those in the
U.S. decades ago, before regulations and pollution-control
technologies existed. China simply can’t claim a similar lack of expertise because
the necessary environmental technology is already in widespread use
today, and it has made the human and environmental impacts of industrial
pollution both quantifiable and controllable.
Simply put,
China now has access to the know-how needed to effectively address
the industry’s environmental problems. And if Beijing
doesn’t take steps to bring emission levels closer
to those in the rest of the world, China’s trading partners can justifiably complain that this
failure to act confers on its domestic steelmaking industry an unfair
competitive advantage.
Unless the damage caused
by China’s poor emission standards is addressed, the debate on
climate change and global trade will get sidetracked and deadlocked.
Every day, American steelmakers comply with air and water pollution
standards that are six times tighter than China’s and spend at least twice as much to operate and
maintain pollution control equipment. It’s important for
policymakers to recognize that if the U.S. can produce
clean steel, China should as well. That’s why, as Congress begins to tackle
climate legislation and such suggested routes as a cap-and-trade program
and tax-based adjustments, China’s products must face the same treatment. Otherwise,
American steelmakers will face diminishing sales while dirtier
production ramps up in China.
Simultaneously, the climate problem will only grow worse. That’s
not much of a solution at all.
|
Steelworks Home 