Firm upgrades operations to earn carbon credits

MANILA, Philippines - Treasure Steelworks Corp. (TSC), the former state-run National Steel Corp. will install new electric arc and ladle furnaces and use captured waste gas for production to cut energy consumption and reduce greenhouse gas (GhG) emissions during production, enabling the company to qualify for carbon credits under the Clean Development Mechanism of the Kyoto Protocol.

According to TSC, the replacement of old electric arc furnaces will reduce power consumption while the capture of the waste gas generated by the blast furnace of the steel plant to generate electricity will displace the grid-derived electricity that would have been consumed, resulting in reduced carbon dioxide emission.

The ‘green’ activities are contained in a recently signed Emission Reduction Purchase Agreement (ERPA) wherein TSC will be assisted in the development of its carbon assets by the Philippine office of world-leading carbon services company Eco Securities.

TSC operates a billet-making plant within a 20-hectare complex in Iligan City in Lanao del Norte. It is the largest billet-making plant in the Philippines in terms of installed capacity at 300,000 metric tons per annum that is expected to double upon completion and commissioning of the country’s first blast furnace in the second quarter this year.

At present, the company relies on limited supply of local steel scraps to produce molten steel for billet production. With the blast furnace, TSC will utilize locally available iron ore and coal resources for its steelmaking operations. Together with advanced technology and improved work processes, the facility will ensure better consistency of molten steel and enhanced production efficiency.

Company officials said the current financial crisis and urgency of the fight against climate change has pushed TSC to implement projects to simultaneously improve operational efficiency, reduce GhG emissions and earn carbon credits.

Carbon credits, a key component of national and international emissions trading schemes that have been implemented to mitigate global warming, represent a new revenue stream for the steel firm.

Under the Clean Development Mechanism (CDM) of the Kyoto Protocol, the global accord addressing climate change, Philippine companies can gain revenues from carbon credits if they implement projects that reduce GhG emissions. The CDM is a project-based mechanism that allows industrialized countries with specified GhG emission reduction targets in the Kyoto Protocol to acquire “carbon credits” from CDM project activities undertaken in industrializing countries, such as the Philippines.

TSC is owned and controlled by TKC Steel Corp., a publicly-listed operating and holding company with subsidiaries and affiliates engaged in the manufacturing and distribution of various steel products. It also has an effective controlling equity interest in ZZ Stronghold Steel Works Co. Ltd (ZZS), a company incorporated and based in Zhang Zhou, China, which manufactures and distributes various steel pipe products in China and other export markets.

London-listed EcoSecurities, on the other hand, is one of the world’s leading companies in the business of originating, developing and trading carbon credits. It structures and guides GhG emission reduction projects through the Kyoto Protocol, acting as principal intermediary between the projects and the buyers of carbon credits. Working at the forefront of carbon market development, the company has been involved in the development of many of the global carbon market’s most important milestones, including developing the world’s first CDM project to be registered under the Kyoto Protocol.