BlueScope has been handed AUD136.8 million from the Australian government's Critical Inputs to Clean Energy Industries (CICEI) programme to reline a blast furnace at its Port Kembla steel plant, keeping its emissions-intensive, coal-based operation going for decades to come, says SteelWatch.
As detailed in SteelWatch’s Sunsetting Coal in Steel report, relining blast furnaces is fundamentally incompatible with emissions reduction obligations under the Paris Climate Agreement.
Caroline Ashley, SteelWatch executive director, described the steel sector as a 'carbon bomb that will make global efforts to limit global warming to 1.5oC impossible if we don't start cutting emissions this decade'.
"Retiring blast furnaces instead of relining them, and investing money into future-proofing the sector with hydrogen-direct reduced iron and electric arc furnaces is the way to protect jobs and our future from climate change."
Caroline Ashley, executive director, SteelWatch
“The steel sector is a carbon bomb that will make global efforts to limit global warming to 1.5oC impossible if we do not start cutting emissions this decade. Retiring blast furnaces instead of relining them, and investing money into future-proofing the sector with hydrogen-direct reduced iron and electric arc furnaces is the way to protect jobs and our future from climate change. Spending government ‘clean energy’ money on a coal-burning blast furnace would be madness in any country, but is stupendously wrong-headed in Australia, the country that has potential to supply the sector globally with green iron made from green hydrogen,” said Caroline Ashley, executive director of SteelWatch.
“Every dollar that goes into relining a blast furnace is a dollar not invested in technologies to decarbonise the steel industry. Even with this injection of taxpayer money, Bluescope still needs financiers, including banks and investors. They must know that its decision to continue relying on coal is in stark contradiction with the climate emergency, and they must immediately refuse to support any coal-based projects,” said Cynthia Rocamora, industry campaigner at Reclaim Finance.
"Blast furnaces are increasingly seen as stranded assets by commercial banks."
Julie Hovenier, banks and steel campaigner at BankTrack
According to Julie Hovenier, banks and steel campaigner at BankTrack, “BlueScope relining instead of retiring this furnace is self-defeating from a finance perspective. Blast furnaces are increasingly seen as stranded assets by commercial banks, as demonstrated by ING’s recent announcement that they won’t provide dedicated finance to new unabated blast furnaces, or blast furnace relinings. While the Australian government may be willing to throw a lifeline now, the long- term outlook of securing finance for a heavily polluting asset looks grimmer every day as banks double down on their climate commitments.”