Green steel..European-US agreement transforming the global steel market

Introduction to translation

Robinson Meyer, a journalist for the American “Atlantic” magazine, prepared, report In it, he addresses the “Green Steel” agreement that was established by the United States and Europe last month and is awaiting full maturity in the next three years, reviewing the benefits of climate change from this agreement, as well as the obstacles facing its implementation.

translation text

If archaeologists, with their distinctive hats, want to name our current era as they called the eras of our ancestors the Stone Age and the Bronze Age, then perhaps it is quite appropriate to call our era the “Steel Age”, as steel or steel permeates all corners of our contemporary lives. the cars The wolf was the oppositeInfrastructure and weapons, and thus is an important component of virtually every major product manufactured today. “As you go about your day, you come across steel every few feet, which is in some ways as important as chips to the technology industry,” says Todd Tucker, director of governance studies at the Roosevelt Institute.

Moreover, steel is a major part of one of the world’s toughest climate problems. Although there are technologies currently in place to generate electricity or transport people from one place to another (by metro and tram, for example)* without causing climate-polluting emissions, many of the problems resulting from heavy industries are still unresolved. Iron and steel production alone is responsible for more than 7% of greenhouse gas emissions globally in 2016.

The United States and the European Union will agree on a common methodology for calculating the carbon emissions “covered” by steel.

However, in a busy month of climate change policy, Biden announced a new framework for climate spending worth 555 billion dollars, is still remarkable to be one of the most important news circulated so far about steel. On October 31, during the Group of Twenty summit in the Italian capital, Rome, the Biden administration agreed with the European Union on what he called “the first global carbon sector agreement.”

This new measure, which will be fully negotiated over the next two to three years, will cause these countries to tip the scales in trade in low-carbon steel and possibly even close their borders to so-called polluting steel (a type of carbon-emitting steel). heavy). The United States and the European Union will also agree on a common methodology for calculating the carbon emissions “covered” by steel (emissions caused by operations associated with the steel industry)*.

Given the reduction in tariffs between the two parties, it is likely that this agreement will help lower prices for American consumers. This agreement represents tacit European recognition that American steel causes fewer emissions than steel elsewhere in the world, as most American steel producers currently use electric arc furnaces, which allow recycling of scrap into new materials and bypassing the steps of the carbon-intensive polishing process, according to Tucker says.

This advantage led to what is perhaps the most important part of the EU-US deal: the full support it received from the US steel industry and its union (a major shift, as steel-making and dependent sectors have long opposed carbon-neutralization efforts for fear that their profits would be negatively affected)* . The Biden administration and Europe have found a way to forge new alliances (include rather than exclude steel stakeholders)* that can advance their shared economic, geopolitical and environmental goals, and the agreement clearly shows, at least in this sector, that America and Europe can work together despite of their divergent approaches to climate policy (the differing vision between Washington and Brussels on what to do to combat climate change has always been an obstacle to a global agreement)*.

Zero Carbon Bridge across the Atlantic

For more than a decade, the European Union has run the world’s busiest carbon trading market, with companies bidding on the right to release climate pollutants. But since 2017, double The price of pollution tripled (fees paid by companies for industries that polluted the environment increased), until European manufacturers started begging to the European Union to save them from foreign competition (imports of steel and other manufactures have become cheaper because they come from markets that are not intransigent in the face of pollution caused by steel, unlike European companies that have been charged at high prices to acquire “carbon quotas”, which has resulted in Valuable cheap and polluted steel from outside Europe.

Last summer, Progress The European Union has long-term plans to tax carbon imports of cement, fertilizer, electricity, iron, steel and aluminium. This has been a major problem for the United States, whose climate policy has long relied more heavily on standards than on carbon taxes, as the complex mix of state laws and local power grids has made calculating a fair or accurate carbon tax nearly impossible. . has to caution John Kerry, Biden’s special envoy on climate, told the European Union that a carbon tax on imports should be used only as a “last resort”.

The European-American conflict seemed to herald a rift between the two sides. In a worst-case scenario, the Atlanticists (believers in the economic, political, and military cooperation between the United States, Canada, and Europe) have expressed concern that Europe will unify its market (or at least harmonize its tariffs) with the other huge global carbon market: China. China, not America, is Europe’s largest trading partner, and a Sino-European climate pact might look more attractive to Brussels than a partnership with a carbon-choked, polarizing country like the United States. However, the recent crucifixion agreement precluded, if not ended, the possibility of this happening.

Chinese steel is responsible for 60% of the global steel industry’s emissions, and about 4% of the world’s total carbon pollution.

The truth is that steel is absolutely essential to any industrial process, so many countries sponsor their steel industry for economic and security reasons, which has led to a permanent surplus. Perhaps China, which produces semi solid world, produce surplus The need is estimated at tens of millions of tons annually. (and Chinese steel responsible About 60% of the emissions caused by the steel industry globally, and about 4% of the global total carbon pollution). According to Tucker, the United States, Europe and Japan had “talked” about the problem of China’s steel surplus for decades, but did not take steps in this regard, until former President Donald Trump raised tariffs on all imported steel in 2018. Europe also has its own tariffs. To put it mildly, these tariffs provided an opportunity for the United States and the European Union to negotiate a “Green Steel Agreement”.

According to Roy Houseman, a member of the United Steelworkers lobby, under the new deal, the US will import about 1 million tons of steel from the European Union annually. Any imported steel must be “melted and cast” in Europe, which means it cannot be re-formed Chinese steel. Most important in this deal is the agreement that the United States and the European Union will calculate, on the basis of a common method, the carbon pollution in steel, which bridges an important intellectual gap between them.

A Tale of Two Continents: A History of Interpreting the Climate Crisis

William Nordhaus, the Nobel Prize-winning economist, has called for a global carbon tax to be imposed among ready nations.

Historically, American and European elites have always conceived of climate change as a global problem of freebies, who believed that no country would solve climate change alone, so no single country had the motivation to do anything. To solve this dilemma, the Nobel Prize-winning economist William Nordhaus has called for a global carbon tax among ready nations, as well as a “climate club” to collect tariffs on imports and exports.

Europe has embraced much of Nordhaus’ directives outright, which the United States has not, since Congress has never succeeded in putting a price on carbon or imposing clear penalties for carbon pollution. And then a new way of thinking about climate change has recently gained more popularity, with the political scientists Michael Acklen and Matto Mildenburger arguing that climate change is not a problem at all for freebies, but is in fact a problem of a “distribution struggle,” a vision of I summed it up myself last April as follows:

“The challenge in global climate action is not about what others get (for free) from reducing emissions in your country, but about the many deeply conflicting interests that stand in the way of zero carbon, and the key to moving towards effective climate policy lies in forming an alliance that supports net zero. And it works to make it sustainable.”

In a way, the crucifixion agreement will unite these two methodologies. On the one hand, it applies Nordhas’ idea of ​​creating a “climate club”, whereby Europe can punish intransigent countries in their carbon-intensive industry. On the other hand, the deal is a coalition negotiation, in which the decarbonization leaders of one country extend a hand to the zero carbon leaders of the leaders in another, while employing the steel industry along the way (rather than ignoring their interests or pursuing zero carbon policies in a way that threatens their interests). along the line)*.

This sets a pattern for cooperation between the United States, the European Union and other democracies, a concept not entirely out of the blue on which the idea of ​​the European Union itself rests. In 1952, when France, West Germany, Italy and the countries of the Benelux (Belgium, the Netherlands and Luxembourg) established the Coal and Steel Union, then-French Foreign Minister Robert Schumann said that the goal of the market was not just to make war between France and Germany unimaginable. , and even financially impossible. This balancing act worked, resulting in greater integration, and the eventual evolution of the Coal and Steel Union into the European Union.

At the present time, the darkest and most disturbing, such hope may have become unimaginable, but the merger has triumphed, and the schism has been postponed until at least a while.


*Translator’s Notes

Translation: Hadeer Abdul Azim

This report is translated from The Atlantic It does not necessarily represent the site of Medan.

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