Elan Steel gave up its NT$1 trillion steel investment

Kyoto Protocol on CO2 derails NT$1 tril. steel investment

Source: the China Post

In an ominous sign, the Kyoto Protocol has already derailed a plan to invest NT$1 trillion in steel investments.

While economists and other experts around the world are debating the overall effect of the Kyoto Protocol's effects on industrial investment, a Taiwan steel manufacturer announced yesterday that it was scrapping a plan for a record investment for factories in the south of the country.

Elan Steel had intended to invest NT$1 trillion to increase its capacity by six million tons of steel in areas of the south including a plant in Mituo. Company president Lin I-shou, however, said that a deal made with Kaohsiung County would have to be thrown out.

The project had been ten years in the making with various environmental considerations constantly delaying its implementation. This year, the first year in which the Kyoto Protocol is in effect, the final nail was hammered into the coffin. Given the international agreement's restrictions on carbon dioxide emissions, a common externality in the steel production process, the venture became untenable.

Kaohsiung County government's development bureau chief Chu Cheng-chue said yesterday that while many people would like Taiwan to more resemble the beautiful scenery of New Zealand, they overlooked that New Zealand had not been subjected to foreign aggression as well as a number of other factors affecting Taiwan's development.

Sources noted that Kaohsiung County Commissioner Yang Chiu-hsing has spent a great deal of effort in promoting the project enlisting many government-affiliated agencies to assist. The plan would have been the most significant investment into south Taiwan in 30 years.

County officials said that the Mituo plant would have brought in at least NT$24 million in revenue for which taxes would have contributed NT$600,000. They also noted that the project would have created around 60,000 job opportunities.

During planning, county officials pointed out, they had taken the Kyoto Accords into consideration and Yang and Lin both called on Minister of Economics Ho Min-yueh who had given a positive response in regard to the project.

However, they said, they discovered that the environmental protection issues passed their expectations and they had no choice but to ditch the plan.

http://www.chinapost.com.tw/business/detail.asp?GRP=E&id=64271