A catastrophic economic downturn awaits the Illawarra if the Federal Government ploughs ahead with its emissions trading scheme, BlueScope Steel has warned.
Chief executive Noel Cornish said yesterday the viability of the Port Kembla steelworks - along with the 12,000 jobs it supports - would be under threat if the Government's Carbon Pollution Reduction Scheme (CPRS) took effect in its present form.
Read chief executive Noel Cornish's statement to the committee [pdf]Speaking before a Senate select committee in Wollongong, which is investigating the impact of the emissions trading scheme, Mr Cornish painted a nightmare portrait in which Australian steel could become uncompetitive and business moved offshore.
"If our business becomes unviable in the global marketplace then the whole Port Kembla steelworks is threatened," he said.
Mr Cornish's comments represent BlueScope's bluntest assessment yet of the impact of the Government's emissions trading scheme.
He said "tens of millions" of dollars would be wiped from the company's books in the first year if the plan came into effect.
"Costs of this magnitude would be difficult to bear in good economic times - in the current downturn they would be disastrous," Mr Cornish said.
"There is a real danger that an aggressive CPRS, particularly one that results in Australia acting ahead of major (international) competitors, could compound current financial difficulties and affect the ongoing viability of the Australian iron and steel industry."
He said steel production had plummeted 50 per cent since October last year due to the global economic crisis, placing pressure on jobs and finances.
"We are basically working ... to make sure we get through this crisis and I don't think we have any capacity to take on a tax that does not apply to our competitors."
Sitting next to Mr Cornish was BlueScope general manager Alan Thomas who said the scheme could drive steel production into the hands of the world's biggest polluters, China and India.
"In July 2010 we will be the only steel industry we are aware of on the Earth that will have those imposts," he said.
After the committee's hearing, Australian Workers Union branch secretary Andy Gillespie played down fears and said the unions had been in intensive discussions with the Government about the scheme.
"I think it is a bit premature for BlueScope to say all this when there has been no firm decision at this point in time," he said.
"The union has been locked in heavy discussions with the Federal Government with the assistance of our local members ... those discussions are not finalised and are ongoing.
"(BlueScope) should just wait and see what is going to happen instead of putting the fear of Christ into the workforce."
The Senate committee also heard from Futureworld board member Stephen Gale, who said the Government should not delay the implementation of an emissions trading scheme because of the global downturn.
"I don't think that the overall timelines should be changed," he said. "The overall threat from climate change is not going to slow down because we are in a recession."
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