Comment Log Display

USS-POSCO Industries (UPI) appreciates the opportunity to
participate in the public process for California Air Resources
Board Proposed California Cap on Greenhouse Gas Emissions and
Market-Based Compliance Mechanisms Regulation, including Compliance
Offset Protocols.   We have thoroughly reviewed Appendix B:
Development of Product Benchmarks for Allowance Allocation and
would like to address some concerns that we have.  Our comments are
summarized below.

Comment #1 – The Proposed Benchmark for Cold Rolled and Annealed
Steel Sheet Production

Appendix B cites that “the ease of developing product-based
benchmarks depends on the homogeneity of products within the
benchmarked industrial sectors.”  The Appendix then goes on to list
only one benchmark for Cold Rolled and Annealed Steel Sheet (CRS)
Production.  However, there are two types of annealing processes
that result in different steel properties, which, in turn, result
in two different CRS products.  Steel can be annealed using either
a batch annealing (BA) process or a continuous annealing (CA)
process, and “BA” or “CA” is typically part of the CRS product
description.  Batch annealing is a multi-day process where up to
several dozen coils are stacked in a furnace, and heated until the
correct properties are obtained.  In a continuous annealing
process, the steel is uncoiled and passes in loops through a
furnace for several minutes heating a cross section of the strip
for several minutes.  Continuous annealed material has a fine grain
structure and is more resilient than batch annealed material which
has a coarse grain structure and excellent formability.  It is not
a product that is simply differentiated by technology.  Each
process creates a unique product and therefore, each process should
have its own benchmark.

Comment #2 – The Proposed Benchmark for Tin Steel Plate Production

The benchmark for Tin Steel Plate Production is listed as 0.0197 on
page 10 of the Appendix.  UPI is the only company that produces
this product, and through communication with Mihoyo Fuji of the Air
Resources Board, we came to the conclusion that our emission
intensity for this product to be 0.03536.  The appendix states that
the “staff selected a benchmark based on the “best-in-class” value
(i.e., the emissions intensity of the most GHG-efficient California
facility).”  Since UPI is the only California facility that
produces this product, the benchmark should reflect our current
emission intensity levels. 


Comment #3 – The Proposed Benchmark for Pickled Steel Sheet
Production

UPI currently runs an Acid Processor (AP) in concurrence with our
Pickle Line Tandem Cold Line (PLTCM) which produces Pickled Steel
Sheet Product.  The AP uses natural gas to regenerate hydrochloric
acid which is then returned to the pickle line.  Because UPI is the
only facility that recycles and regenerates our spent acid, the
natural gas used should not be counted against our emission
intensity benchmark for our Pickled Steel Sheet Product.