AISI Highlights Global Environmental Leadership, Raises Competitiveness Concerns In Statement Submitted to the House Committee on Energy and Commerce

Remarks Provide Comment on American Clean Energy and Security Act of 2009

Washington, D.C., 04/24/2009 – Emphasizing the American steel industry’s global environmental leadership in recycling and carbon emissions reduction, American Iron and Steel Institute (AISI) President and CEO Thomas J. Gibson, said that fundamental components of any climate change policy that would be fair, enforceable and have global reach are: 1) emission allowances stability; 2) energy costs; and 3) border adjustment. Gibson made these points in a statement submitted today to the House Committee on Energy and Commerce regarding the American Clean Energy and Security Act. 

“From an environmental perspective, the United States is the best place to make steel in the world, and it will take lots of steel to build the wind towers and solar panels we will need to make our entire economy greener,” said Gibson. “Let’s make that steel here.”

“Our ability to stay competitive in the world economy means we need fair and strong trade laws that are rigorously enforced” added Gibson. “The same is true for climate – we need fair climate laws with global reach that can be enforced. We hope this bill can establish the framework for such fair climate law.”  He also said that the bill mustaddress the anticipated time lag before other nations invest similarly in reducing carbon emissions.

Due to AISI and its member companies’ concern about energy use and CO2 emissions for two decades, the processes the domestic steel industry operates today are very near the limits regarding these two parameters. Therefore, until new technology is available there are very little CO2 emission reductions that are possible for the steel industry. According to AISI, this means that a general pool of allowances that all energy intensive sectors compete for and that decline in size over time does not work. As Gibson points out, “Steel requires a sufficient and stable pool of allowances.”

In addition, Gibson points out that the increased energy costs from domestic climate policy for the use of coal, electricity and natural gas – all used in great quantities by the steel industry – must be offset in order to maintain the domestic steel sector’s global competitiveness. He went on to state that “a WTO-legal border adjustment mechanism must be a significant part of any climate proposal to account for the cost burden of more stringent climate policies here vs. our international competition.”

He said the timing of the bill’s consideration is directly relevant to Congress’ climate policy considerations, because China’s steel industry now accounts for 50 percent of the world’s production of CO2 from steelmaking—approximately equal to all the other steel mills in the world combined.  He said poor climate policy would tilt the playing filed and put manufacturing jobs at stake if effective competitiveness provisions are not included.

Gibson concluded by emphasizing the importance that the Committee address these competitiveness issues in any climate change policy that is put forth into law. Unless steel industries worldwide are held to the same standards, the United States steel industry will be undercut by countries that do not have as stringent climate legislation as we do in this country.

AISI serves as the voice of the North American steel industry in the public policy arena and advances the case for steel in the marketplace as the preferred material of choice.  AISI also plays a lead role in the development and application of new steels and steelmaking technology.  AISI is comprised of 24 member companies, including integrated and electric furnace steelmakers, and 138 associate and affiliate members who are suppliers to our customers of the steel industry.  AISI's member companies represent approximately 75 percent of both U.S. and North American steel capacity.  For more news about steel and its applications, view AISI’s Web site at www.steel.org.

Contact:
Nancy Gravatt
Vice President, Communications
American Iron and Steel Institute
Tel: 202.452.7115