Posts Tagged ‘Blast furnace’

EU OKs compensation for big energy users hit by power costs

The European steel industry is undergoing a transition linked to its current economic difficulties and the slowdown of steel demand. At the same time, steelmakers are concerned by added regulatory costs. The environment would, in theory, benefit from an increase in EAF steelmaking capacity as opposed to blast furnace-basic oxygen furnace capacity. However, future electricity costs, the main cost element of EAF steel, will determine the relative level of investment.

SBB 24 May – The European Commission has adopted a framework under which member states may compensate high energy users, including steel producers. This is in response to the higher electricity costs expected to result from a change to the EU Emissions Trading Scheme as from 2013.

The regulation will allow subsidies of up to 85% of the increased cost faced by the most efficient companies in each sector from 2013 to 2015, a cap that will gradually fall to 75% in 2019-2020.

However, European steel industry body Eurofer says that is grossly insufficient and will not restore the level-playing field with competitors outside the EU.

At first glance, the most impacted products (EAF steel and downstream) would be covered by a maximum 50-60% of the indirect CO2 cost, should member states give the maximum they are allowed to as per guidelines, a spokesman for Eurofer told Platts Steel Business Briefing in an emailed response to questions on Wednesday.

“Given the current economic situation and the state of public finance in the EU, we don’t expect member states to give away much,” he added.

Steel use must fall, but opportunities exist: Wellmet

SBB 24 April In order to reduce greenhouse gas emissions sufficiently to prevent catastrophic climate change the global use of steel must fall, notes Julian Allwood, group leader of the Wellmet2050 project at Cambridge University. However, there are opportunities for steelmakers to add value and potentially increase margins by producing less steel, he argues.

The global industry has almost reached the maximum amount of blast furnace capacity it will ever need, Allwood says. Increasing scrap supply should mean that new capacity will be primarily EAF-based.

However, steelmakers should also be producing less steel by making their products more material-efficient. Many steel products, such as sections, are around one third heavier than they need to be to fulfill their roles and much auto sheet contains around twice as much steel as carmakers will use, Allwood says.

By working with their customers steelmakers can help to find ways of providing exactly the same products with significantly less steel, and therefore significantly less raw material, labour and other costs. Producing steel with a specific end-use in mind could also increase efficiency and create low-cost premium products for steelmakers to profit from.

Unfortunately economies of scale are working to prevent this. Producing large quantities of commodity products to minimize labour costs currently makes economic sense but is not environmentally sustainable. Meanwhile, making more labour-intensive but tailored products for end users is only economical if a significant premium is being paid for the product.

Perhaps materials should be more highly valued by society and priced higher, one ArcelorMittal executive quipped at Platts SBB’s Green Steel conference in Berlin.

Earliest industrialisation of Hisarna 2020: Tata Steel

SBB 14 November The earliest industrialisation of Hisarna, the smelting reduction technology being trialled at the IJmuiden steelworks, is 2020, Koen Meijer of Tata Steel told the recent German steel industry conference in Dusseldorf. Hisarna is a high risk/reward innovation, he said at the event attended by Steel Business Briefing.

On 18 April 2011 the process, which removes the need for coking and agglomeration, was piloted for the first time. After one failed start three successful attempts followed, and 60% of capacity was achieved for a short time, Meijer said.

The results of the pilot indicate that the process works as expected, though more operating hours are needed. Between December and February improvement proposals will be implemented and April-May next year will be the next campaign. Industrial scale demonstration will be carried out between 2014-2018, according to Meijer.

Hisarna is part of the Ultra-low CO2 Steelmaking (ULCOS) project, which aims to cut CO2 emissions by 50% per tonne of steel produced. Without carbon capture and storage technology Hisarna can cut emissions by 20%, whereas with CCS it can achieve a reduction of up to 80%.

It not only has environmental benefits, Meijer said. Costs associated with coking and agglomeration disappear through Hisarna and you can use iron ores not currently suitable for blast furnaces and non-coking coal.

Steel production accounts for 5% of manmade CO2 emissions globally, and consumption is expected to double by 2050. Further reductions in CO2 need breakthrough technologies, not just energy saving, Meijer said.

Aperam’s Timóteo completes coke-to-charcoal switch

Measures to reduce the carbon footprint of steelmaking can also help to reduce steelmaking costs, if the situation is right.The use of charcoal has its limitations, it can only be used in small blast furnaces for example. However, for Aperam in Brazil, which uses small-scale blast furnaces and has a charcoal producing subsidiary operating nearby its plant, changing its raw materials can reduce costs, provide a stream of carbon credits and improve its environmental credentials.

SBB 27 July Stainless, electrical steels and special alloys maker Aperam’s Brazilian unit Timóteo has finalized the conversion of its No 2 blast furnace fuel from coke to charcoal, Steel Business Briefing learns from the company.

The mill said last year it would invest R$175m (US$114m) to replace imported coke and metallurgical coal with domestically sourced charcoal in a move that will result in “a total replacement of this power matrix.”

SBB estimates the cost of charcoal is around one-third that of coke, with the use of the former allowing Aperam to earn carbon credits.

Eurofer sues the European Commission over BF benchmark

In July the European steel producers’ association, Eurofer, submitted its long-awaited legal suit against the Emissions Trading System (ETS). But whether or not its complaints carry legal weight, the suit is unlikely to be resolved for another two years. By that time steelmakers will already be facing the costs of phase III of the ETS. The only certain way to manage the costs of carbon trading therefore remains investment in energy efficiency and emissions reduction technologies. While the benchmark may be technically impossible to achieve while maintaining production levels, the difference in costs faced by the most and the least efficient European plants could have a significant impact on competitiveness.

SBB 22 July The European steel producers’ association, Eurofer, has filed a legal challenge to the European Commission’s carbon dioxide emissions benchmark for hot metal production. Eurofer claims that the EU’s wrongly-determined benchmark could cost the industry an additional €600m ($862m)/year from 2013 to 2020.

The benchmark – in C02 t/tonne hot metal – decides the number of free carbon credits each integrated steelmaker receives from 2013. It is meant to represent the average of the 10% most efficient plants.

However, the commission’s benchmark is technically unachievable, comments Eurofer director general, Gordon Moffat. “Nowhere in the world is there a steelworks that could operate its plant at the level of this benchmark,” he tells Steel Business Briefing.

At issue is the use of blast furnace off-gases to produce electricity. Eurofer wants all the steelmakers’ CO2 to be included in the benchmark.

In contrast, the commission argues that steelmakers should not be given free credits for electricity generation. It has calculated the amount of carbon dioxide that would be released if natural gas, rather than BF gases are used to generate power, and reduced the benchmark by that amount. Eurofer notes that the EU’s emissions trading directive allows free allocations to be given to electricity production from waste gases.

“The benchmark rules have been approved by EU member states and the European Parliament after a thorough consultation analysis. We are confident that court will side with us,” DG Climate Action spokesman, Isaac Valero-Ladron tells SBB.

Poland is also separately suing the commission over the benchmarks. Unless the European Court of Justice decides on fast tracking, the case could take two and a half years, Eurofer notes.

New ‘green’ ironmaking passes first test, funding approved

Current steelmaking technologies only have limited scope for reducing greenhouse gas emissions. For the industry to achieve significant cuts in emissions, of 50% or more, breakthrough technologies will be needed. Although these are still several years away from commercial operation, a number of research projects are achieving results in their test phases. In particular part private, part state-funded projects in Japan, Korea and the EU are developing new technologies.

SBB 1 July Tata Steel’s 60,000 t/y HIsarna ironmaking pilot plant in IJmuiden has successfully completed its first test campaign, the company tells Steel Business Briefing. It is now preparing for a second round of tests in October or November.

The project has also been approved for further funding from the Research Fund for Coal and Steel (RFCS), which distributes around €55m ($80m) per year to industrial research projects in the sector. The project has been selected for funding by the RFCS and representatives of European member states, and received final confirmation from the European Commission, SBB understands from a source close to the RFCS.

The first round of tests was a success and only minor alterations are needed before the second round, Tata says. The new tests aim to achieve stable, longer operating periods.

Because the project is part of the Ultra-low CO2 Steelmaking (ULCOS) programme, further tests can only be conducted once representatives of other ULCOS members and officials are available to be present, in accordance with ULCOS protocol, SBB understands.

ULCOS is a consortium of steelmakers and others that aims to develop new technologies which can cut emissions from steelmaking by at least 50%.

The technology is jointly owned by Tata steel and Rio Tinto and can produce hot metal directly from iron ore fines and low-volatile coal, eliminating the need for coking and sintering. This could result in a cut of 20% in emissions than that produced by a standard blast furnace; emissions could be reduced a further 60% by using carbon capture and storage.

Shougang trials waste plastic in coke-making at Tangshan

In addition to looking at their own emissions, steelmakers have some opportunities to help reduce the environmental impact of other materials. The use of plastic, both as a source of carbon units and for the physical properties it can give to coke, could be one way of doing this profitably.

SBB 9 June A subsidiary of north China steel giant Shougang Group named Shouhuan Technique, based in Hebei province’s Tangshan, has begun introducing waste plastic in its coking operations aiming to supplement coking coal and help cut production costs.

Trials using a pilot plant began in May and Shouhuan Technique hopes to use about 10,000 tonnes/year of soft plastic waste such as sheeting and bags for blending with low-caking coking coal. These are then carbonised to produce coke.

A Shougang researcher tells Steel Business Briefing that its method differs from that of say, the Japanese mills, where used PET bottles are granulized first before being used in the coke ovens. Shougang directly blends soft waste plastic with low-caking coking coal before sending the result to a reaction chamber.

“The key step in the process is to perfectly control the temperature to ensure the waste plastic melts rather than burns so that it enhances the caking ability of the (weak) coking coals,” he says. Indeed, results to date show the ‘molded coal’ obtained through the process produces coke of sufficient quality for use in Shougang’s 4,000 cubic m blast furnace in Tangshan.

“However, the (pilot) plant’s scale is small and we need to wait to see how successful the process is for reducing costs,” says the researcher. “But I believe it will perform well, as the price of waste plastic is much lower than premier coking coal.”

Products of Shouhuan Technique will be fed to Qian’an Zhonghua, a jv between Shougang and Kailuan Coke Ltd that supplies coke to the steelmaker’s works. The jv’s present coke-making capacity is 3.3m t/y. For now, plastics will meet only a tiny fraction of Shougang’s carbon units.

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