Bureaucratic barriers

Background

Steel plants are complex; their planning and construction take several years. Frequently, the process is prolonged further by long waiting times to receive construction permits and other required licenses. As many low-emissions technologies are rather novel, the bureaucratic process and approval time may take even longer.

CCUS technologies, for example, could play an important role in the short-term reduction of carbon emissions. Nevertheless, this and other technologies’ adoption is slowed by high bureaucratic barriers. Often, requirements include sequestration and transportation licenses, as well as continuous safety monitoring that may require new staff, resources, and consistent interaction with relevant government departments.

Although there are good reasons for bureaucratic processes and safety checks, requiring producers to wait — at times for several years — to get their permits can greatly slow transition efforts, making it more difficult to achieve emissions reduction targets on time. This comes on top of the time constraints already faced due to low facility turnover. Reducing red tape could also improve financial access, as it may become easier to secure funding with permits and reliable timelines for construction and production. A balance, therefore, needs to be found between ensuring safety and regulatory checks and reducing unnecessary bureaucratic processes.

Policy Action

Policy targets to reduce bureaucratic barriers include:

• Eliminate excessive red tape for low-emissions steelmaking technologies to simplify their commercialization process and adoption across steel companies.
• Reduce bureaucratic processes for the licensing and construction processes of low-emissions steel plants. Having clearly-defined technology and steel standards can simplify this process.
• Align bureaucratic procedures with the national steel decarbonization strategy to ensure that bureaucratic procedures do not hamper the transition of a steel plant at the end of its lifetime or during reinvestments.
• Engage in capacity-building within government, e.g., through the provision of information and training about new steelmaking technologies, requirements, implementation, and monitoring.
• If necessary, create nudges and reminders to support steel producers in filing low-emissions technology and infrastructure permit requests on time, especially if bureaucratic requirements change. Such changes may relate to either default options or the provision of new information.

Examples and Case Studies

Excessive Bureaucracy in India (2013)

Bureaucracy and Renewables in the US

Texas Rules and Regulations for Steel

German National Approvals and Construction Permits for Steel