ENERGY EFFICIENCY

ENERGY EFFICIENCY

Iron and steelmaking consumes large quantities of energy, mainly in the form of coal. More than 80 per cent of this consumption is unavoidable because it is required for the basic chemical reaction in a blast furnace converting iron ore into iron.

Notwithstanding this constraint, BlueScope Steel is continuously seeking ways to reduce its energy intensity through improved operational practices and a range of energy efficiency projects.

Where feasible, by-product gases generated by steelmaking processes are captured and reused for heating processes, reducing the need to purchase additional sources of energy. Natural gas (about 10%) and electricity (about 7%) make up the majority of remaining energy use and initiatives to save these commodities have also been implemented across the Company.

BlueScope Steel's total global energy consumption has fallen this year. This change can be directly attributed to the lower rates of production that occurred during the year. Prior to FY2009, energy intensity for the Company globally had remained relatively stable over a number of years, at approximately 21 gigajoules per tonne of raw steel manufactured. This year, due to lower production rates and an associated reduction in economies of scale, the Company's energy intensity was higher than recent years.

Energy Efficiency Opportunities
Program

BlueScope Steel is a participant in the Federal Energy Efficiency Opportunities program. The program involves detailed assessments of energy use and the identification of potential savings at the Port Kembla Steelworks, Springhill and Western Port sites.

During the year, assessments were completed to schedule on a number of key plant departments that consume a total of 7.7 PetaJoules of energy per year. Energy use assessed included consumption of coal, utilities and liquid fuels. To date over 90 per cent of BlueScope Steel’s energy use in Australia has been assessed under the program.

Each savings opportunity identified is required to undergo a thorough technical and financial feasibility assessment to determine its viability. A summary of assessments completed this year is provided in Table (1). Further information on the Energy Efficiency Opportunities program is available for viewing on the corporate website: www.bluescopesteel.com