New Zealand Steel Loses AU$13 Million Emissions Subsidy Amid Policy Changes

New Zealand Steel, a division of Bluescope Steel Limited (ASX: BSL), has lost its AU$13 million annual subsidy under New Zealand's Emissions Trading Scheme (ETS), sparking concern over the financial impact on its operations. The subsidy, provided as New Zealand units (NZUs), was aimed at supporting emissions-intensive companies in sectors vulnerable to international competition, helping to keep production local rather than offshore. New Zealand Steel had factored in this support when committing to a shift towards using an electric arc furnace. With the subsidy removed, the company has cautioned the government on potential repercussions for its sustainability initiatives and competitiveness. The decision raises questions about the balance between environmental targets and economic viability for industries reliant on carbon credits.

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