SSAB wants to be part of the climate solution
December 02, 2015 09:15 CET 6 min read
Paris Climate negotiations are at the crossroads of competitiveness. Global solutions are necessary for a global market.
The 2015 Paris Climate Conference is the 21st Conference of the Parties, i.e. the annual meeting of all countries which want to take action for the climate. It will be held in Le Bourget, France, from November 30 to December 11 and will go ahead despite the recent terrorist attack in Paris. The Conference, will, for the first time in over 20 years of UN negotiations, aim to achieve a legally binding and universal agreement on climate, with the aim of holding the temperature increase to less than 2°C. The conference is expected to attract close to 50,000 participants and 190 countries.
“SSAB supports world leaders that set limits to hold global warming to below two degrees. The Paris negotiations are based on different nationally determined contributions. These contributions are estimated to deliver a 2.7°C increase in the global temperature, so hopefully Paris will increase the level of ambition,” says Maria Långberg Head of SSAB Group Sustainability.
National contributions are not comparable with each other. For example, China has committed to decouple emissions increase from their growth of gross national product, where Europe has agreed to decrease at least by 40 % compared to 1990 levels. In reality, this means that China will increase their emissions while Europe will reduce them. The more balanced the national contributions are, the better the competitiveness of different companies are taken into account and the risk of the so-called carbon leakage* is reduced. Efficient global curbing of emissions needs market mechanisms and carbon pricing. Reaching a more extensive climate deal in Paris, means larger markets for climate solutions are created.
“For more than 50 years SSAB has specialized its production towards advanced high-strength steels, thus enabling our customers around 30- 40 % lighter products and thus reducing fuel consumption and CO 2 emission. Carbon dioxide emissions could be reduced significantly by upgrading steel to high-strength steels. SSAB’s steel plants are among the most CO 2 efficient in the world”, says Gregoire Parenty Executive Vice President and Head of Market at SSAB.
No matter what happens in Paris, the European Union is committed to significantly reducing emissions. High costs are expected even for the best performers. The European Commission gave its proposal for the new Emission Trading Directive in the summer of 2015 and now the Parliament and Member States are negotiating, how to protect the carbon leakage sectors like the steel industry.
“SSAB should have a global playing field and full allocation of free EU ETS allowances. Now, this is not the case, because the Commission’s proposal preaches the EU’s mandate. The benchmark level of hot metal is not reachable by any steel producing site in Europe and higher electricity costs are not compensated in Sweden or Finland as they are in some European countries. By producing high-strength steels efficiently, SSAB contributes to a CO2reduction in the world,” says Helena Kivi-Koskinen Public Affairs Manager at SSAB.
*Carbon leakage is when uneven cost increases causes companies to relocate their business to other countries with lower production costs.