August 2012 EEO Workshop Series 2012 BlueScope Steel – Second Cycle Strategy and Case Studies Paul Wright Environment Manager Resource Efficiency & Climate Change

Differing Approaches for the First & Second 5 Year Cycles The First Cycle EEO assessments were incorporated into a larger analysis that was being conducted by external engineering support and senior technical personnel on options for GHG abatement and energy savings across BlueScope Steel While effective in identifying 73 Ideas, targeting 4.4 PJ of energy savings, it:- – placed significant additional demands on key technical personnel, –involved a high cost external contractor spend, and –resulted in variable levels of engagement of operational and technical personnel. The Current Cycle Based on positive discussions with the DRET team to reduce the admin & cost impost of the scheme, it is proposed that the second cycle will:- –Largely leverage off the work of the first cycle (although a review for post- restructure baselines and operations is required); –Avoid the high contract engineering spend; –Achieve greater direct involvement of all our personnel; and –Utilise existing Business Improvement Systems to generate, capture and report energy saving ideas to satisfy EEO requirements. 2

BlueScope Steel (BANZ) Business Improvement Process 3 The focus of the BlueScope Steel Savings Program is to provide each natural work team an opportunity to deliver a cost saving project, and has:- –Created a culture of relentless cost reduction year in year out. –Focused teams on eliminating waste, benchmark and standardise better practices, and now is formally promoting and capturing energy efficiency opportunities. –Delivered a system to monitor and report results monthly. –A check system in place to ensure projects have a business case and can demonstrate evidence of the savings. –Recognised as a BSL leading practice; it offers a standardised approach in managing cost saving activities, offers transparency such that each team can share, adopt and use like practices across the businesses. –Has been modified to promote and easily capture EEO eligible projects The significance of the Program, and the recent inclusion of an Energy Focus, has been reinforced by the commitment of Senior Business Managers during the launch of the 130/13 initiative in July/August 2012.

BlueScope Steel (BANZ) Business Improvement Process 4 Since 2008, the business improvement program has :- – Delivered 1684 projects, worth over $300M in total cost savings – Delivered over $100M in recurring savings – Originally 163 Teams were involved but since December 2012, with the inclusion of the majority of BSL Australias large energy user sites, team numbers have swelled to 331. While the Energy Savings Theme was only added to the system in March 2012 in preparation for the Launch of the 130/13 initiative, analysis of the opportunities generated in the 20/12 initiative identified:- – 34 energy efficiency ideas (~6% of the total) – Yielding reductions in energy in excess of over 300,000 GJ/annum and ongoing savings of over $1 M. It is anticipated that with the launch of the 130/13 initiative, and our focus on the energy prize, that the identification of efficiency and savings opportunities will continue to grow throughout the current cycle.

Linked Sharepoint Sites – across the business 5

Project Register – provides direct links to idea forms and detail 6

Standard template for capturing Ideas 7

Standard Template for Tracking Idea Progress 8 ENERGY

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11 Visual Management Standards promote engagement and involvement across the business

Utilising existing business improvement systems to engage the whole workforce in identifying Energy Efficiency Opportunities 12

Thank you & Questions? 13 Paul Wright BlueScope Steel Environment Manager Resource Efficiency & Climate Change