BlueScope has dismissed analysis which names it as the company whose value would be worst hit by the amended Safeguard Mechanism.
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Carbon diagnostic and audit firm Emmi had sent a new analysis report to investors which found BlueScope would face the most serious blow to its valuation if it couldn't reduce emissions intensity.
The Port Kembla steelmaker was among five which, Emmi said, would have to reduce their emissions intensity by an average of 4.9 per cent annually or face heavier costs under the safeguard. The others were Illawarra miner South32, Alcoa, Santos and Woodside.
"These five companies could face significant valuation impacts if they are unable to keep up with declining baseline requirements," the report said.
"Other major emitting companies don't have material valuation exposure if they do not decarbonise.
"This is because most of their emissions are generated outside of Australia, so only a small portion of their overall valuation is affected."
Comparing the raw costs under the Safeguard regime, BlueScope had by far the worst exposure as a percentage of its Enterprise Value (EV). EV is the company's market capitalisation (total value of shares) plus its total debt, minus its cash assets.
But it seems changes to the proposed legislation have removed the practical threat to the steelmaker's bottom line.
A BlueScope spokesman said the analysis was wrong.
"From our perspective we'd have to point out that this report is inaccurate," he said.
"We don't publish financials for the PK Steelworks so there is no way Emmi would have that information.
"Also, any assessment will need to consider the TEBA decline rate and the Government is still to publish important guidelines as to how the EBIT test will work."
Trade Exposed Baseline Adjusted (TEBA) facilities are companies which significant emissions, whose markets mean they are exposed to international competition, and who have an elevated risk of carbon leakage.
The EBIT test refers to how the impact on manufacturing companies will not be judged against their earnings before interest and tax (EBIT) whereas other industries are measured on total revenue.
Under the Safeguard Mechanism, industries exposed to international markets can apply for a discount on how much their emissions intensity must decline, or face charges.
The standard rate by which emissions must reduce would be set at 4.9 per cent until 2030.
Emmi CEO Michael Lebbon said the purpose of his company's analysis was to show investors the situation before government sweeteners were applied.
"The Safeguard analysis we have conducted is what we expect the 'raw' exposure of companies to look like, we have not overlaid or taken into account specific caveats such as Emission Intensive Trade Exposed exemptions," he said.
"At Emmi we believe it is important to understand the base carbon exposure of a company first then layer over other specific considerations."
Last month BlueScope CEO Mark Vasella said changes to the safeguard mechanism had meant it would be able to avoid adverse impacts.
"Now, subject to the final form of the legislative rules and the Government's additional support for industry, BlueScope's previous concerns in respect of potential adverse impacts have been materially alleviated," he told the Australian Securities Exchange in April.
The company had raised major concerns about how it would be hit by the proposed safeguard mechanism (SM), which is designed to set out expected rates of decline in carbon emissions in a bid to reduce the impact on the climate.
The amended SM was welcomed by BlueScope once it was finalised.
BlueScope and other heavy industries have long argued it would be unfair to subject it to expensive emissions reduction obligations which its international competitors did not face. This was the reason for the special treatment allowed for emissions intensive, trade exposed industries (EITE) under the first carbon price mechanism 11 years ago.
Emissions intensity refers to tonnes of carbon dioxide equivalent released per volume of production.
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