ENVIRONMENT

Above: Threatened Green and Golden Bell frogs are protected in new purpose-built ponds at the Port Kembla site in New South Wales, Australia. The ponds were completed in time for the breeding season and form a vital link between two significant frog populations in southern Wollongong.

COMMITTED TO IMPROVING OUR ENVIRONMENTAL PERFORMANCE

BlueScope Steel is committed to caring for the environment and choosing to do what is right. We will take action within our businesses and work with our partners to continually improve our environmental footprint. To ensure we achieve these goals, the Company has adopted comprehensive environmental governance arrangements and management systems.

In addition to our compliance obligations, BlueScope Steel has undertaken a range of initiatives to reduce the company’s environmental footprint.

We manage our environmental risks and impacts through the use of a framework we call LAWWNE, which focuses on:

• Land
• Air
• Water
• Waste
• Noise
• Energy/Greenhouse

Through the use of this framework we are working to reduce our impact, while conserving energy and fresh water, and reusing and recycling material.

We are committed to monitoring and publicly reporting on our progress. Public reporting takes place through our participation in independent external reporting initiatives, such as the Australian National Greenhouse and Energy Reporting System (NGERS), and National Pollutant Inventory (NPI) and the international Carbon Disclosure Project (CDP) and through initiatives such as this Community, Safety and Environment (CSE) Report.

This Report provides comprehensive information about BlueScope Steel and the environment, including governance and policy arrangements, and performance measures.

The Impact of the Global Economic Crisis on BlueScope Steel's environmental performance

The 2009 financial year will be known for the greatest downturn in global industrial output in post-war history. The global steelmaking sector was heavily impacted, and BlueScope Steel was no exception. The extended reline of the No. 5 Blast Furnace at Port Kembla and the associated reduction in steel production in Australia and across the company significantly affected the Company’s environmental, as well as financial, performance. Steelmaking is an energy and resource intensive process, and our processes operate most efficiently when they are running at their maximum production levels. Through incremental production increases and efficiency improvements on a year-by-year basis, BlueScope has been able to successfully reduce the intensity of our environmental impact. The unprecedented reduction in production experienced in FY2009 has generally had the effect of reducing absolute levels of environmental impact (such as water, energy use, and greenhouse gas emissions). However, the associated production inefficiencies have increased the corresponding intensity metrics. This is a common theme throughout this report. We anticipate that next year will reflect a return to more normal operational conditions.