Environment minister calls Maritime Iron's emissions projections 'concerning'

The company pitching an iron processing facility in northern New Brunswick acknowledges in a major regulatory filing that carbon dioxide emissions will increase in the province if the plant goes ahead.

Maritime Iron's 490-page registration for a provincial environmental impact assessment, posted online Monday, shows a potential increase of more than two million tonnes of greenhouse gas emissions over current levels.

"It is a little bit concerning that our emissions will rise when we're trying to be on the other side of that and reduce our emissions here in New Brunswick," said Environment Minister Jeff Carr.

He said he would have to balance the potential economic boost in the Chaleur region with the likelihood the plant would cause the province to miss its emissions-reduction targets.

The EIA document says by linking the iron plant to NB Power's Belledune generating station, which would burn gas byproduct from the iron plant and reduce its coal consumption, the two facilities would emit a combined 4.9 million tons of greenhouse gases.

That's almost double the 2.6 million tons that Belledune now emits alone, and more than the Irving Oil refinery, currently the province's largest emitter.

But the document avoids that comparison. Instead, it says the 4.9 million tons of emissions would be less than the 6.5 million total if the Maritime Iron and Belledune plants operated separately.

'There's some pretty fancy math'

However that scenario ignores the potential shutdown of Belledune in 2030, when NB Power must phase out coal-fired electricity generation.

"There's some pretty fancy math which is, 'based in a perfect world, if we were in charge of writing all the regulations, this might be okay,'" said Lois Corbett of the Conservation Council of New Brunswick.

"But that's not exactly the situation that the climate faces right now. What this project will do is push New Brunswick greenhouse gas pollution way over its current cap."

The province's climate plan includes a target of getting emission to within 30 per cent below 2005 levels by 2030.

The province is very close to that target now. "I'd like to keep it that way," Carr said, conceding any major increase in emissions from a new industrial plant would put the goal in jeopardy.

The Maritime Iron proposal was registered in the wake of 420 jobs being lost with the shutdown of the Glencore lead smelter in Belledune.

If the project goes ahead, the company says it will create 1,300 direct jobs during construction and 200 permanent jobs during the plant's operations.

In its EIA document, Maritime Iron says by supplying the Belledune plant with a gas byproduct as a fuel source, it can help NB Power cut coal consumption there by more than 50 per cent.

That would mean Belledune "can continue beyond 2029" because reduced coal use will bring it in line with federal regulations, it says.

Equivalency agreement needed

But Carr said that would require what's called an equivalency agreement, in which Ottawa would agree to exempt the plant from the national coal-phaseout deadline in return for equal emissions reductions elsewhere in New Brunswick.

"I don't think anyone who wants to build a billion-and-a-half-dollar facility should assume that there's going to be an equivalence agreement and there won't be a huge price on carbon by the time this project comes to fruition, "Corbett said.

"They are writing a project proposal as if there were an agreement in place and that's not their decision. That's the federal government's decision."

The $1.5 billion iron plant would also be subject to the federal carbon price on large industries, unless Ottawa accepts a proposal from New Brunswick's Progressive Conservative government for an alternative pricing system.

NB Power CEO Gaetan Thomas said recently that the utility is working on an equivalency agreement.

If Belledune closed, Maritime Iron's emissions impact alone would be 3.8 million tonnes, still a net increase to the provincial total compared to today.

But it's not clear whether the company's business model is viable if it can't link to the NB Power plant and sell its gas byproduct to the utility.

Company urges project be seen in global context

In the EIA document, a legally required step to win provincial approval, Maritime Iron downplays its potential emissions of greenhouse gases in New Brunswick by urging officials to zoom out to a global perspective.

Maritime Iron says its project should be considered "within a global, national, and provincial context" that allows it to argue it's climate-friendly.

That includes an argument that its Finex technology, a new way of processing iron ore into pig iron, would reduce global emissions by 40 per cent a figure irrelevant to New Brunswick's emissions target.

Maritime Iron also argues that by shipping Canadian pig iron to markets now using older processing technology, the company "will be helping the world transition away from jurisdictions that use more energy intensive traditional technologies and that have higher GHG emitting electrical grids."

It says Canadian iron ore from Quebec is now shipped 28,000 kilometres to China and Korea for processing. The shipping distance to Belledune would be only 425 kilometres, reducing emissions from freighters.

At the same time, processed pig iron now shipped to a distribution hub in New Orleans travels 12,000 kilometres from Russia, whereas the trip from Belledune would be 4,500 kilometres.

But Canada, and New Brunswick, can't earn any credit for those reductions from shipping emissions because there is no global agreement in place on how to measure and exchange such reductions.

"We don't get a credit for that on the global scale," Carr said.

International negotiators tried and failed to reach such a deal in the latest round of global climate negotiations in Madrid in November.

Carr said a technical committee will begin assessing the proposal. He said it's "anybody's guess" how long the process will take.