AISI concerned steel producers face costly consequences under EPA power plant rules

The affordability and reliability of electricity for steel producers is at serious risk under new Environmental Protection Agency regulations calling for reduced greenhouse gas emissions, according to the American Iron and Steel Institute.

“The leading steel producing states in the U.S. are heavily dependent on coal for electricity production,” Thomas J. Gibson, president and CEO of AISI, said. “This rule will have a disproportionate impact on coal-fired utilities and, in turn, impede economic growth for steelmakers.”

Specifically, the EPA regulations require existing electricity-generating utilities to reduce carbon dioxide emissions by 32 percent in the next 15 years, and effectively mandate that new coal-burning power plants use unviable carbon capture and storage technology to reduce greenhouse gas emissions.

The regulations will raise electricity costs for domestic steel companies and threaten the industry’s ability to remain internationally competitive, according to AISI, the North American public policy advocate working to advance steel in the marketplace as the preferred material of choice.

AISI is comprised of 19 member companies, including integrated and electric furnace steelmakers, and roughly 125 associate members who are suppliers to or customers of the steel industry. The Washington, D.C.-based institute also plays a lead role in the development and application of new steels and steel-making technology.

Along with 16 other pro-manufacturing groups, AISI submitted last December joint comments to the EPA saying that the regulations would severely harm the international competitiveness of critical U.S. industries.

This month, Gibson added that because the steel industry competes with steel producers in countries where energy costs are often subsidized, “limitations on [carbon dioxide] emissions instituted in the U.S. must also apply at the same level of stringency to other major steel producing nations, such as China. Otherwise steel production and manufacturing jobs will shift to other nations with higher rates of greenhouse gas emissions.”

AISI notes that the American steel sector is recognized as having the steepest decline of total air emissions among nine manufacturing sectors studied by the EPA in its 2008 Sector Performance Report.