The Philippines is fast becoming China’s favorite dumping ground for an outdated steel technology that Beijing itself has banned in 2017.
The repercussions of the irresponsible shipment of steel plants using induction furnace (IF) technology to the Philippines are grave for the country”•they stunt the development of a genuine steel industry and significantly contribute to air pollution.
It is a well-known fact that smog blanketed Beijing during the 2008 Summer Olympics mainly because of polluting factories that include obsolete IF facilities. China until 2017 had over 600 induction furnace producers manufacturing substandard quality steel products. The factories had a combined capacity of around 120 million tons, although their total output in 2016 amounted to just 30 to 50 million tons.
China finally banned steel plants using the IF technology in 2017, resulting in cleaner air in the northern Asian country. That decision mothballed around 120 million metric tons of production capacity. Unfortunately, China’s dirty junk is finding its way into the Philippines, Indonesia, Malaysia and Thailand.
The ASEAN Iron & Steel Council has expressed alarm over the unwanted transfer of technology.
“Our main concern arising from the above development is that ASEAN is becoming a dumping ground for these obsolete and outdated machinery and equipment, which, because of their inherent technology limitations and constraints, could adversely impact the orderly development of the iron and steel industry in the region,” says the council.
The induction furnaces, according to the council, “produce sub-standard quality steel products and are environmentally unfriendly as they emit uncontrolled harmful gases and particulates and consume higher electrical energy than electric arc furnace.”
The increasing shipments of IF plants to the Philippines are disturbing. The country now has 13 IF plants from just five in 2015, or from just 200,000 MT of production capacity to over a million MT now. Thus, instead of having a state-of-the-art steel industry, the Philippines now have plants using obsolete and highly polluting technology. That means a lot of smog.
More alarming is the fact that IF produces steel products of inconsistent quality that explains the proliferation of substandard steel across the Philippines.
Test-buys from hardware stores by the private sector and examinations by a government laboratory have shown that rebars and angle bars in the country do not comply with product standards. These are apart from unmarked and unregistered products, possibly because of smuggling and the output of IF plants.
Official records have named errant IF companies like Real Steel, Philippine Koktai Metal, Metrodragon, among others, as the alleged source of substandard products.
Lax permitting rules
How China’s IF technology ends up in the Philippines is interesting. It all starts in the permitting process where some lawyers found a loophole in the rules. IF companies apply with local government units for permits by under-claiming their production capacity at just 30,000 MT per year. A higher capacity will require the attention of the head office of the Department of Environment and Natural Resources, where vetting is stricter.
The loose rules have clearly resulted in the exponential rise of dirty steel facilities in the Philippines and the underdevelopment of the local industry. Modern steel plants are actually sprouting all over the country but these efforts could be sabotaged by the flood of IF into the country.
Authorities should be reminded about the spotty compliance monitoring in Boracay Island, which virtually turned into a cesspool because of the inept administration of the local government unit. The local steel industry is heading in the same direction unless the national government takes over the permitting process for IF.
The ASEAN Iron & Steel Council has noted that IF plants have no process of removing the harmful elements in the liquid steel, resulting in inconsistent quality of steel products produced. This, in turn, is a safety hazard since these steel products are used in construction of buildings and infrastructures.
“The operation of these induction furnaces also harms their workers and surrounding communities since they generally do not have dust and emissions collecting equipment. Harmful gases and dusts generated during the scrap melting are just allowed to be emitted directly to the environment,” the council said.
The Philippines has a disaster waiting to happen if authorities do not act fast.
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