EPA regulations likely to raise power costs for domestic steel companies

SEATTLE (Scrap Monster): The American Iron and Steel Institute (AISI) has raised serious concerns regarding the final power plant rules announced yesterday by the US Environmental Protection Agency (EPA).

The newly announced regulations require power generating utilities to reduce carbon dioxide (CO₂) emissions by 32% over the next fifteen years. It also requires new coal-burning power plants to reduce greenhouse gas emissions by using unviable carbon capture and storage (CCS) technology. Expressing its dissent, the Institute noted that the regulations would lead to increased electricity costs for domestic steel companies and would make them uncompetitive when matched with international steelmakers.

According to Thomas J. Gibson, President and CEO, AISI, the carbon dioxide emission restrictions proposed by the EPA are more stringent when compared with the levels maintained by other major steel producing countries. This may eventually result in shifting of steel production industry to other nations such as China which have less stringent emission controls in place. He also noted that energy costs in several other steel producing countries are often subsidized. Consequently, US producers may find it difficult to compete with producers in such countries.

The Institute noted that the leading steel producing states depend heavily on coal for generation of electricity. The new rules will badly impact coal-fired utilities, which in turn may impede growth of steel making industry in these states.

Earlier during December last year, AISI along with sixteen other trade groups had jointly conveyed their concerns to the US EPA. In a letter forwarded to the Agency, the consortium of trade bodies had warned that the regulations may severely harm the international competitiveness of US industries.