The Company has completed a verification audit for carbon dioxide emissions

The quantity of emissions of greenhouse gases in Europe is under the microscope. We discuss the details with Mr. Mark Vido, the CO₂ Manager from the department of Director Environmental Strategy, regarding the issue  of annual balancing of carbon dioxide (CO₂) emissions which must also be performed by U. S. Steel Košice, the results of the verification audit of their recording, as well as the criteria for emissions trading.

• Since 2013 the European Union has introduced more strict criteria for balancing of CO2 emissions. What is the intention, and what does it mean for U. S. Steel Košice?

In addition to reducing inaccuracies in the applied measuring devices, the objectives of their adoption were to standardize the methods of monitoring CO₂ emissions and to make their recording transparent and consistent. Large companies may choose the method based on mass balance of fuels and materials containing carbon, with accurate scales and accredited laboratory analyses, or the method of direct measurement of CO₂ in chimneys; however, this method is more suitably applicable to a lesser number of significant chimneys such as in case of separate electricity generating stations and heating plants of the power engineering industry. Considering its great diversification of industrial activities, different kinds of fuel, raw materials and by-products, U. S. Steel Košice applies the method based on mass balancing. All the technical means applied to balancing and also the calculations and information systems must be duly documented and the data archived for a period of ten years.  Special forms of the European Union must be used for the annual report on CO₂ emissions. .

• What must be taken into account in emissions balancing and what cannot be omitted?  

For emissions balancing it is necessary to observe the monitoring plan as approved by the district office; this plan contains the prescribed scales for finding quantities of materials with their contents of carbon, analytical methods for determining the carbon content, and description of the inspection and management of processes.
Each kind of fuel or material has its own specific properties and different ways of handling. These must be taken into consideration, so that no double metering of the same quantity takes place or – on the contrary – no inclusion of relevant material into the balancing is omitted. For example, carbon present in the purchased coking coal enters the produced coke and partly the coke-oven gas. Again, carbon contained in the produced coke and used in blast furnaces enters the blast-furnace gas, pig iron and slag. All the same, it is necessary to correctly consider the stock levels at the end of the year, which might be complicated considering the requirements of their accurate determination.  

• Reported emissions are subject to audit. Who performs it and what are the results of the latest audit at the Košice steelworks?

Every year an audit is performed by an external authorized person who issues the verification report. If the report states the correctness of the reported CO₂ emissions, and it is also submitted for approval by the relevant district office. Subsequently the operator is obliged to declare the verified quantities of allowances to the manager of the registry by the end of April. In the case of any shortcomings, the operator is obliged to make additional purchases of allowances. At present the price of an allowance for one ton of CO₂ oscillates around € 5.00, whereas the fine for non-declared allowances is as much as € 100.00 for each unrecognized ton of CO₂. This year’s audit performed last month confirmed the correctness of the reported quantity of CO₂ for last year. Accordingly, U. S. Steel Košice will be entitled to declare the verified allowances to the registry of the European Union.

• The European scheme of CO₂ allowances trading started in 2005. Through which stages has it passed, and what substantial changes have occurred since that time?

Allocation of CO₂ allowances and trading with them is meant to serve as a tool for reduction of emissions from industrial activities with the objective of preventing global warming. In the first and second stages of trading, which ended in 2012, the allowances were allocated  free of charge on the basis of emissions history. Unless any significant change in technology or growth of production took place, the allocated allowances were sufficient and there was no need to additionally purchase them. 

In the first stage, the price of allowances oscillated. The cause of the instability was that companies - in terms of balance - reported different quantities of CO₂ than expected. The second trading period was affected by the financial crisis, which caused reduction in production volumes, and therefore in the quantity of emitted CO_2, as well. This situation resulted in a surplus of allowances on the market and thus also in reduction in their price. 

• For the current trading period valid until the end of 2020, the European Union has adopted several measures that significantly affect industrial companies and producers of electricity alike. Can you clarify them?  

Since 2013 it has been prohibited to allocate any allowances to producers of electricity free of charge. The allowances must be procured by their purchase at auction. With respect to the other industries, the allowances are allocated free of charge only to the extent corresponding to the most efficient equipment in a given industry. The purpose of this is to motivate producers to implement energy-efficient or low-carbon technologies, because they will be otherwise compelled to purchase the lacking allowances at auction. Nevertheless, selected industrial sectors enjoy certain exemptions as far as allocation of free allowances is concerned. The reason is to protect them from being damaged by competition in the countries where no such scheme of trading as in the European Union has been introduced.

For these reasons, beside the audits for quantity of CO₂ emissions, audits verifying quantities of coke, iron and agglomerates produced in the year and various data on generation and consumption of heat and electricity are also performed annually in December; the purpose of such audits is to establish whether any significant reduction in production has taken place. If so, then the emissions allocated free of charge are reduced. The purchasing of power generating coal and natural gas plays a significant role in the provision of allowances in the years to come, because their share used for generation of electricity will have to be purchased at auction. At U. S. Steel Košice we plan to bring our new dry-bottom boiler number seven into trial operation. With this in mind we are already preparing to change the plan of CO₂ monitoring, and in cooperation with representatives of the Power Engineering and BSC divisions we are identifying the sources of data and their transfer into the information systems for the needs of CO₂ balancing.