Nippon Steel: emissions rules may force overseas growth

Nippon Steel says emissions rules may force overseas growth.
by Yoshifumi Takemoto and Mariko Yasu Nippon Steel Corp., Japan's largest maker of the metal, said it may be forced to increase production overseas should it be disadvantaged compared with rivals under new international climate change rules under discussion. The steelmaker may have "no choice but to shift to Brazil and other overseas countries to expand output" Nippon Steel Executive Vice President Hideaki Sekizawa, said in a Bloomberg Television interview in Tokyo after China, India and 14 other nations at the Group of Eight summit in Toyako, Japan last week considered long-term emission cuts. The summit was held amid efforts to unite industrialized and developing nations on a treaty to replace the Kyoto Protocol on global warming after it runs out in 2012. Nippon Steel and JFE Holdings Inc., Japan's second-largest steelmaker, are the only mills making more than 20 million metric tons of crude steel obliged to cut emissions under the current protocol, which excludes developing countries, Sekizawa said. The G-8 countries, responsible for almost half of the world's emissions, on July 8 pledged to reduce production of heat-trapping pollution by at least 50 percent by 2050. They didn't specify how those cuts should be reached. The 50 percent target wasn't mentioned in a second statement signed by 16 countries including China and India and which supported a general goal for reducing emissions. "It's good that agreement was reached on common ground," Sekizawa said. An industrialized nations agreement to fund the transfer of environmental technologies to China and India, which aren't bound by the Kyoto protocol was "praiseworthy", he said. Emissions Trading Nippon Steel opposes a proposal by Japan's Prime Minister Yasuo Fukuda to introduce emissions trading on a trial basis this year as part of a plan to cut the country's emissions of gases blamed for global warming by between 60 and 80 percent by 2050. "Setting tougher emission caps on businesses could prompt a shift of the production base to developing countries from Japan," Shoji Muneoka, chairman of the Japan Iron and Steel Federation, said in a statement June 9. Muneoka is also president of Nippon Steel. Sekizawa said the difficulty of equitably determining caps for different companies had led to lawsuits in the European Union and he had not heard that trading in the EU had succeeded in lowering emissions. Nippon Steel already has an investment in production in Brazil through its 23 percent shareholding in Usinas Siderurgicas de Minas Gerais SA, the South American country's second-largest maker of the metal.