Build back Better begins with funding to green Algoma Steel

On July 5, the federal government announced that $420 million in federal funding will go to Algoma Steel in Sault Ste. Marie Ontario, to enable the company to retrofit their operations and transform their coal-fired steelmaking processes to Electric-Arc Furnace production. The press release from the Prime Minister’s Office explains that Electric-Arc Furnace production is  an electricity-based process,  expected to cut greenhouse gas (GHG) emissions by more than 3 million metric tonnes per year by 2030, making Algoma the “greenest” steelmaker in Canada. At the same time, the transformation will create an estimated 500 construction and subcontracting jobs, as well as over 600 new co-op placements for students, and approximately 75 high-tech STEM jobs.

The total cost of Algoma’s transformation is estimated at $703 million over four years – $220 million will come from the federal Infrastructure Bank, and up to $200 million from the Net Zero Accelerator  program, under the Strategic Innovation Fund. A major expenditure, but small compared to the $23 billion worth of support the government has provided since 2018 to the Coastal GasLink, Trans Mountain, and Keystone XL pipelines, according to a new report from the International Institute for Sustainable Development .

Algoma’s press release  and its Environmental policies offer information about the company. A CBC summary of the funding announcement is here, and the Toronto Star offers an Opinion piece, “Justin Trudeau just gave one of Canada’s biggest polluters hundreds of millions of dollars – why won’t he show us the deal?” (July 5) .  In that essay, author Heather Scofield states: “Algoma was first in line to get the federal funding because it was meant to set the tone for building back better. Let’s make sure it sets more than a tone, and actually sets standards of transparency, accountability and weaning our economy off fossil fuels too. ”  

Workers at Algoma are represented by United Steelworkers Local 2251. From the national office, an article, “Canada’s Steel Industry Has A Secret Weapon That Could Soon Beat China’s Cheaper Bid” discusses the union’s hope that government green procurement policies will favour Canadian-made, low-carbon steel in future infrastructure projects. A February 2021 report from BlueGreen Canada made the same point about steel, aluminum and lumber products in  Buy Clean: How Public Construction Dollars can create jobs and cut pollution .  The Work and Climate Change Report previously reviewed some of the Canadian and international reports about greening steel in 2020, here .  In summer 2021, European developments have been profiled “Green steel is picking up steam in Europefrom Canary Media, and  “From Sweden, a Potential Breakthrough for Clean Steel” in Inside Climate News (June 24).

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