American Materials Manufacturing Alliance Says Major Changes Needed to Senate EPW Climate Bill to Prevent Job Loss and Emission Migration

American Materials Manufacturing Alliance Says Major Changes Needed to Senate
EPW Climate Bill to Prevent Job Loss and Emission Migration

WASHINGTON, Oct. 29 /PRNewswire-USNewswire/ -- The American Materials
Manufacturing Alliance (AMMA), a group of energy-intensive, trade-exposed
industries (EITEs) that includes The Aluminum Association, the American
Chemistry Council (ACC), the American Forest & Paper Association (AF&PA) and
the American Iron and Steel Institute (AISI), submitted a letter to all
members of the U.S. Senate outlining major changes needed to the Senate
Environment and Public Works (EPW) Committee's "Chairman's Mark" of climate
legislation, S. 1733.

Substantial changes to S. 1733 are needed to prevent energy-intensive
industries from being placed at a significant competitive disadvantage in the
global marketplace. The letter states that "a basic principle of climate
policy is that it should not undermine the competitive position of U.S.
manufacturers in the global marketplace" and that "unless the Senate makes
major changes to improve the emission allowance provisions and address energy
cost impacts" in S. 1733, its provisions could "trigger major job loss and
emission migration to unregulated economies." The full letter is available
at www.steel.org/AMMAletter.

"We believe climate policy should identify all costs imposed on U.S.
manufacturers and provide mechanisms to offset those costs until competing
countries have commensurate greenhouse gas reduction policies," the letter
continued, "or until new manufacturing technologies have been discovered and
deployed."

AMMA's letter indicates that provisions of S. 1733 put U.S. competitiveness at
risk because the allowances provisions currently drafted are grossly
inadequate. While increasing the allowance pool in the first two years and
creating a supplemental reserve are important first steps, the bill reflects a
severe last-minute reduction in allowances allocated to EITEs and a steeply
declining cap required by the 20 percent emissions reduction target in 2020.
The number of allowances dedicated to EITEs in S. 1733 has decreased
substantially from the already insufficient allowances in the House-passed
bill, H.R. 2454. By 2020, S. 1733 would allocate EITEs 663 million fewer
allowances and more than 2 billion fewer through 2034.

In addition, S. 1733 does not address the likelihood of greatly increased
energy costs. By definition, energy-intensive industries are more sensitive to
energy costs than other sectors of the U.S. economy. Additional provisions
must be added to climate legislation to deal with energy cost uncertainties
and should be structured to address large increases in energy costs if they
occur. The bill also needs to provide specific language relating to the Clean
Air Act pre-emption, as the House bill does. Otherwise there will be a dual
compliance structure for U.S. industry, the letter states.

Finally, the letter points out that S. 1733 does not go far enough to
establish price certainty for carbon allowances, which is important for
manufacturers to make long-term investment decisions.

SOURCE American Iron and Steel Institute

Mandi Ross of the Aluminum Association, +1-703-358-2976; Jennifer Scott of the
American Chemistry Council, +1-703-358-2976; Carlton Carroll of the American
Forest & Paper Association, +1-202-463-2587; or Nancy Gravatt of the American
Iron and Steel Institute, +1-202-452-7115