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Lawmakers file bills to subsidize making steel industry fuel from coal sludge

A bipartisan group of federal lawmakers from West Virginia, Pennsylvania and Ohio reintroduced bills intended to encourage the steel industry to produce fuel from a substance the government designates as a hazardous waste.

The Steel Industry Preservation Act, which U.S. Sen. Shelley Moore Capito, R-W.Va., and U.S. Rep. Mike Kelly, R-Pa., introduced in their respective chambers on May 23, would amend the Internal Revenue Code of 1986, extending and modifying the section 45 credit for refined coal from steel industry fuel.

The bills intend to entice steelmakers to make their own fuel by liquefying coal waste sludge, distributing it on metallurgical coal and then using the mixture to make coke for steelmaking, according to an explanation of the bill. The industry currently disposes of coal waste sludge by incinerating it off-site or putting it into a landfill.

In a May 24 release, the lawmakers said the bill would protect steel jobs as well as the environment.

"This bipartisan legislation will help preserve and grow this vital industry while providing environmental benefits at the same time," Capito said in the release. "It's an example of exactly the kind of solutions we need to focus on right now — commonsense measures that will help improve both our economy and our environment."

If enacted, the bill would create a tax credit worth $2 per barrel of oil equivalent for steel industry fuel produced at a facility that was in service within 18 months of the legislation's passage. The facility would then be eligible for the credit over the next decade.

"Steel production can help dispose of hazardous waste and recycle it into new products that help our steel industry compete," said U.S. Sen. Sherrod Brown, D-Ohio, who co-sponsored the bill. "This tax credit will encourage companies to produce steel, cut down on production costs, and support jobs in our steel industry."