Climate policy and legislation

Paris COP 21 and Climate Change Negotiations

SSAB welcomes the global agreement concluded in December 2015 in Paris. The United Nations Climate Change Conference (COP21) is important in defining the future of climate change policies. The Paris conference is a starting point for nearly all UN nations making their contributions to keep global warming below 2°C and aiming for 1.5°C. These contributions are estimated to deliver a 2.7°C increase in the global temperature, which means that further measures are needed.

EU climate target 2030

In October 2014, the European Council summit set new more ambitious targets for greenhouse gas emissions, renewable energy and energy efficiency for 2030. To achieve the EU target of at least a 40% CO² reduction, the sectors covered by the EU Emissions Trading System have to reduce their emissions by 43% compared to the 2005 baseline.

U.S. Electric Utility Generation GHG Regulations

The Environmental Protection Agency (EPA) is accepting comments through April from the public on its proposal to withdraw the final rule for the Clean Power Plan (CPP), the Obama-era rule that mandates the reduction of greenhouse gas (GHG) emissions from existing power plants. The CPP would have mandated a 32 percent reduction in greenhouse gas (GHG) emissions from existing power plants from 2005 levels by 2030. The proposal to repeal the CPP contains two main parts – the legal interpretation and the policy considerations. In February 2016, the US Supreme Court granted a motion to delay implementation of the CPP while the courts determine its legality. The US Court of Appeals for the D.C. Circuit heard oral arguments in litigation challenging the CPP in September 2016 but has yet to issue a ruling and the case is held in abeyance.

Additionally, the EPA issued the Advanced Notice of Proposed Rulemaking (ANPR) to solicit public input on options to replace the CPP. The ANPR seeks specific information about the roles for federal and state governments, as well as regulated parties, in the regulation of GHG emissions from electric utilities. A similar process is expected to be undertaken by EPA later this year to repeal and Obama administration regulations from GHGs for new power plants.

Currently, the liability associated with this action is low or no impact.

U.S. Ozone NAAQS Standards

In October 2015, the Environmental Protection Agency (EPA) issued its final rule to revise the National Ambient Air Quality standards (NAAQS) for ozone. The rule sets the primary air quality standard for ozone at 70 parts per billion (ppb) averaged over 8 hours and expands the monitoring season. Domestic manufacturers are concerned that some locations in the U.S. may violate the ozone standards due to background concentrations and advocate that the current standard of 75 ppb be maintained. Last fall, EPA issued attainment designations for the new ozone standard. However, impacted industries seek a deferral of EPA’s implementation of the new Ozone NAAQS standard by two years to allow states and impacted sources more time to prepare to meet the new standard. Deferral legislation has been introduced in both chambers of Congress and would provide for a more smooth transition with respect to current efforts in complying with the previous 2008 ozone standard.Currently, the liability associated with this action is low or no impact.

Environmental protection legislation

EU Circular Economy

Steel is 100% recyclable, losing none of its unique properties when properly processed. The European steel industry works hard to ensure that the steel it produces can be reused, recovered and recycled: steel is a ‘permanent’ material. The industry also ensures that steel production’s by-products are put to the best possible uses.

Primary and secondary raw materials are integral and interdependent parts of EU raw materials policy. A level playing field for the supply and use of raw materials and inputs is a prerequisite for reducing waste volumes.
The EU legal framework for product policy must recognize the concept of the ‘permanent’ material, providing the right incentives to foster their proper use. Extended producer responsibility and the Ecodesign Directive should include measures to encourage the use of these permanent materials and to introduce durability, reparability, dismantling and recyclability requirements into products’ design. Steel is a uniquely flexible material, in this regard.

EU Industrial Emissions Directive

SSAB’s Nordic production facilities are subject to the European Industrial Emissions Directive (IED) and preparations to comply with these requirements are in progress. In connection with the IED, the Best Available Techniques (BAT) Reference Document is to be followed. Some of the BATs have been updated (e.g. Iron and Steel Production as well as Large Combustion Plants), some are currently being updated (e.g. Ferrous Metals Processing Industry).

Sulphur Directive

Sulphur Emission Control Areas (SECA) for maritime traffic in the Baltic Sea, North Sea, English Channel and the Atlantic seaboard of the US mean that the sulphur content in fuels for vessels may not exceed 0.1%. The amended Sulphur Directive entered into force on January 1, 2015.

The Sulphur Directive is an important act toward achieving a sustainable environment. SSAB seeks ways to minimize sulphur emissions by route and transport mode optimization, transport efficiency management, minimizing empty runs, improving loading rates, subcontractor management and changes in contract structures, e.g., fuel and bunker efficiency clauses. A specific example as it relates to the dry bulk transports between the steelworks at Raahe, Luleå and Oxelösund in the northern Baltic Sea is the new LNG-fuelled large bulk carriers, representing the latest in technology and innovation. The vessels will be in commercial operation in the second part of 2018 and CO2 emissions per tonne of cargo transported will be reduced by 40-50% in comparison to the current vessels in operation.

EU REACH

REACH, the European Union’s chemicals regulation, aims to improve the protection of human health and the environment against the risks of chemicals and to enhance the competitiveness of the EU chemical industry. SSAB manufacturers, imports and uses substances and articles to which REACH applies. We submit information about the registration of substances and of any hazardous substances in the supply chain. SSAB employs a safety data sheet management system to improve management of up-to-date information about the use of chemicals. In addition, SSAB communicates with stakeholders about any requirements regarding REACH and SSAB’s products when obligations change. SSAB works together with the supply chain to replace substances regulated by REACH with safer ones as soon as possible. Queries about REACH matters can be submitted to reach@ssab.com.

Definition of “Waters of the United States” (WOTUS)

In May 2015, the US Environmental Protection Agency (EPA) and US Army Corps of Engineers (Corps) released their final rule defining “Waters of the US” (WOTUS) subject to federal regulation under the Clean Water Act (CWA). The rule was an attempt by the agencies to provide clarity to the definition of such waters following Supreme Court decisions on the matter in 2001 and 2006. Instead of facilitating efficient and effective regulatory protections for the country’s navigable waters, the final rule would have broadened EPA and Corps jurisdiction. This could have resulted in an increased need for permits and the potential for litigation that will negatively impact the operations of key aspects of our economy. Further permitting delays can result in lost opportunities for economic growth and job creation. The rule is subject to a number of lawsuits across the country from states and stakeholder groups. On February 28, 2017, President Trump issued an Executive Order directing the Administrator of the EPA and the Assistant Secretary of the Army for Civil Works to review the WOTUS Rule and publish for notice and comment a proposed rule rescinding or revising the rule, as appropriate and consistent with law. EPA and the Corps issued a proposed rule last fall to repeal the 2015 WOTUS rule. The two agencies plan to issue the final repeal rule as well as publish a proposal to replace that rule with a common sense clarity regarding Clean Water jurisdiction.

SSAB will continue to monitor this situation as additional clarification is provided and rule challenges progress.

Energy and Electricity Market Legislation

EU Energy Union

The EU Commission issued its package for implementing an EU-wide energy union in 2015. The package includes, among other things, communication and consultation for electricity market design. The aim is to create an efficient electricity market by, for example, improving price signal steering.

EU’s Energy Efficiency Directive

The European Council summit has set a target to increase energy efficiency by at least 27% by 2030, based on the 2005 baseline. In order for the EU to achieve this target, the industry needs to meet with the requirements that are implemented in the legislation at a national level. SSAB regularly carries out energy audits at sites and works systematically to continuously identify energy savings, which is in line with the European Energy Efficiency Directive (EED).