USTR Seeks Probe on GHG Emissions Intensity of Steel Production

United States Trade Representative Katherine Tai, in a letter addressed to the United States International Trade Commission (USITC), has formally requested an
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United States Trade Representative Katherine Tai, in a letter addressed to the United States International Trade Commission (USITC), has formally requested an investigation and subsequent public report to assess the greenhouse gas (GHG) emissions intensity associated with steel and aluminum production within the United States. The results of this investigation will play a pivotal role in shaping discussions between the United States and the European Union (EU) concerning the Global Arrangement on Sustainable Steel and Aluminum.

At the core of their partnership, both the United States and the EU share a strong commitment to joint action and enhanced cooperation in the steel and aluminum sectors. Together, they are actively working to protect workers, industries, and communities from the challenges posed by global excess capacity and climate change. As part of their efforts, they have established a Global Arrangement aimed at discouraging trade in emissions-intensive steel and aluminum products, which contribute to non-market excess capacity originating from other countries. Concurrently, they strive to ensure that domestic policies align with the objective of reducing the GHG emissions intensity associated with these industries.

Initially, the United States and the EU will serve as founding members of the Global Arrangement, and they intend to extend invitations to other like-minded economies to join the initiative and contribute to achieving the overarching goals of restoring market orientation and curbing trade in emissions-intensive steel and aluminum products. The negotiation process for finalizing the Global Arrangement is expected to conclude by October 2023.

To facilitate the investigation, Ambassador Tai has called upon the USITC to distribute questionnaires to both domestic and foreign-owned firms operating steel and aluminum production facilities in the United States. The aim is to collect data on their production levels and associated GHG emissions, focusing particularly on areas not already reported under the US Environmental Protection Agency's GHG Reporting Program or publicly available sources. Utilizing the data acquired through the questionnaires and external sources, the USITC is requested to estimate the highest and average GHG emissions intensity for steel and aluminum produced in the United States, categorized by product type and weighted according to production volume.

The investigation should encompass three types of GHG emissions: Scope 1, which includes direct emissions from owned or controlled sources; Scope 2, which covers indirect emissions from purchased energy generation; and a specific subset of upstream Scope 3 emissions associated with material and resource inputs. The latter should focus on upstream GHG emissions related to intermediate steel and aluminum inputs purchased from external sources and utilized in production. The report should detail the methodologies employed in collecting and analyzing the data, as well as identifying the location and stage within the production processes where GHG emissions occur.

The report, intended for public availability, should not contain confidential business or classified national security information. The US Trade Representative expects the delivery of the report by January 28, 2025, and similar requests will be made in the future to account for industry developments within the domestic steel and aluminum sectors.

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