In your recent NZ Steel coverage you said NZ Steel wasn't in the ETS. They are and both have to buy units and get free units, as I understand it NZ Steel receives $50-$100 million in free NZU's. So why not just cut their free allocation of units, I am sure this would have motivated them to invest in this new tech and then we wouldn't have needed such a big govt subsidy ?
In your recent NZ Steel coverage you said NZ Steel wasn't in the ETS. They are and both have to buy units and get free units, as I understand it NZ Steel receives $50-$100 million in free NZU's. So why not just cut their free allocation of units, I am sure this would have motivated them to invest in this new tech and then we wouldn't have needed such a big govt subsidy ?
A follow on from this is will they still get the free units, essentially a double dip as they will probably continue to be an Emissions Intensive Trade Exposed Industry?
Thanks Finn. Yes they’re in but don’t have to pay effectively, so you’re right. My point was to say they don’t have to pay at the moment. I asked the CEO if they would stay if they had to pay for credits. He said they would shut down immediately as their international competitors don’t have to and NZ Steel would be immediately uncompetitive.
Ah seems fishy to me given they recently posted $340 million in profit ;). Maybe if they can't pay for their own externalities they shouldn't be in business and we would get more building materials from low carbon industries like timber if we can sort out forestry damage issues...
In your recent NZ Steel coverage you said NZ Steel wasn't in the ETS. They are and both have to buy units and get free units, as I understand it NZ Steel receives $50-$100 million in free NZU's. So why not just cut their free allocation of units, I am sure this would have motivated them to invest in this new tech and then we wouldn't have needed such a big govt subsidy ?
A follow on from this is will they still get the free units, essentially a double dip as they will probably continue to be an Emissions Intensive Trade Exposed Industry?
Q:Why not pay for it yourself?
A: NZ Steel CEO "There is no direct financial benefit"
Except for the $50-100 million upside through your shift in ETS obligations...
Yep. Until they stop getting free units, they’re in the same position. No suggestion they won’t still get them.
Thanks Finn. Yes they’re in but don’t have to pay effectively, so you’re right. My point was to say they don’t have to pay at the moment. I asked the CEO if they would stay if they had to pay for credits. He said they would shut down immediately as their international competitors don’t have to and NZ Steel would be immediately uncompetitive.
Ah seems fishy to me given they recently posted $340 million in profit ;). Maybe if they can't pay for their own externalities they shouldn't be in business and we would get more building materials from low carbon industries like timber if we can sort out forestry damage issues...
Thanks Finn. Strategic issue I think. I’d much prefer we retain our ability to make steel here.
Yep agreed, just think maybe $140 mil was a bit too generous...