HLG Ad-Hoc Group 3.ppt

HLG Ad-Hoc Group 3 Energy environment factors affecting the competitiveness of energy-intensive industries Ian Goldsmith Steelmaking made simple Key Steel Industry Statistics Regional steel slab production costs Raw materials (global effect) and energy (local effect) Global electricity prices Steel is a global industry Competition drives cost reduction Competition drives energy efficiency Legislation overload EU: IPPC Directive EU Emissions Trading Scheme Packaging Packaging Waste Directive Landfill Directive Trans-frontier Shipment of Waste Regulations Waste Framework Directive EU Polluting Emissions Register Air Quality Directives National Emissions Ceilings Directive Large Combustion Plant Directive Water Framework Directive REACH ELV Directive WEE Equipment/RoHS Directives Energy Using Products Directive UK: Environmental Protection Act 1990 (Contaminated Land Regulations) Landfill Tax Hazardous Waste Regulations Producer Responsibility (Packaging) Climate Change Levy Renewables Obligation Air Quality Objectives Impact of Environmental Policy * * Blast Furnace Oxygen Steelmaking Secondary Steelmaking Electric Arc Steelmaking Continuous Casting Iron Ore Coal/Coke Natural gas Oil Electricity Steel scrap Coal/Coke Electricity Natural Gas Steel scrap Steel Production by Region (millions of tonnes) 2005 (+/- 2004) Global 1106 (+50) EU 25 186 ( -7) USA 94 ( -5) China 348 (+72) In 2004, over 90% of global steel was continuously cast EU 25*, China, NAFTA, Japan, Korea 95% *But, Poland 80% * Tata, SAIL and Jindal only Sources: WSD ($/t, ex works, 2005, weighted average of regional plants covered) Raw materials (indexed) Energy prices 10 30 50 70 01 02 03 04 05 10 20 30 40 50 60 06 YTD UK Electricity (RHS) UK Natural gas (LHS) Germany Electricity (RHS) p/therm ￡/MWh Note: Market prices FOB Source: Corus Note: UK Wholesale electricity and natural gas forward prices Source: Heren Energy report Exchange rate: ￡/€1.50 Scrap Coal Coke YTD 100 200 300