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Angang to cut costs, emissions with expanded slag processing

Re-using waste from steelmaking carries a number of advantages. The steelmaker has one more product to sell, customers such as the cement industry can reduce their emissions, both can improve thier cost-effectiveness. And of course the re-used waste does not end up in a landfill.

SBB 14 May China’s Anshan Iron & Steel (Angang) plans to invest heavily in slag processing this year, increasing capacity from under 1m tonnes/year currently to 5m t/y by the end of the year by installing four new slag milling units supplied by Germany’s ThyssenKrupp Polysius.

This should help reduce input costs and increase revenues for the steelmaker, Su Xingwen of the Slag Development Co. of Ansteel told delegates to the China International Metal Recycling Conference in Beijing.

Angang can currently produce up to 160,000 t/y of >95% Fe iron nuggets and 180,000 t/y of 60% Fe iron oxide concentrates from its slag processing facilities, helping to reduce input costs. This operation generated RMB 1.02bn of revenue last year. The refined iron nuggets are produced using one of Angang’s first patented technologies and can be used directly in the oxygen converter.

Once valuable minerals have been extracted, steel slag tailings can be ground to a powder and sold to cement and concrete producers. Angang produced 1.3m t of tailings when it produced 16m t of steel in 2009. By 2015, when it expects to produce 60m t of steel, it aims to produce 4m t of tailings.

In theory, capturing the 6 trillion KJ of heat contained in the 3m t of slag produced at Angang’s main steelworks annually could also reduce costs by around RMB 100m ($15.8m), Su estimated. Angang reported a net loss of RMB 2.1bn in 2011, as Platts Steel Business Briefing has reported.

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.

CO2 problem halts pellet project at Austrian iron mine

Though pelletising uses considerable amounts of energy, some reports have said that this is more than offset with reduced energy use in the blast furnace. It is unclear from the article, whether this is correct in this case.

SBB 18 Nov 2010 Austrian steelmaker Voestalpine’s domestic iron ore supplier, the Erzberg mine in Styria, has abandoned plans to install a pelletizing plant, as was projected earlier this year, and reported by Steel Business Briefing.

The decision against the project has been made in view of stricter rules for greenhouse gas emissions in the European Union as of 2013, which would render production of pellets from the mine uneconomical, VA Erzberg says. Due to the chemical consistency of the ore, pellet production would generate a considerable amount of CO2, the company explains.

Erzberg’s ore has an iron content of only 30-40%. According to the earlier plans, a pelletizing plant could lift the content to 50%, and thus increase the exploitation rate at Erzberg, which currently supplies 2m tonnes/year of fine ore to its indirect owner and only customer, Voestalpine. The steelmaker had considered spending €180m on the pellet project.

ArcelorMittal enters Dow Jones Sustainability Index

Environmental improvement only represents one element in the DJ Sustainability index, but along with safety it would seem to be an important one. ArcelorMittal, as the world’s largest steel company, understandably also wants to be seen as an industry leader: to do this successfully, it needs to set the pace for CO2 reductions in the industry. An 8% reduction in CO2 emissions by 2020 (set in 2009) is part of this strategy: but it is unclear how this measures up against others in the industry.

SBB 10 Sep 2010 ArcelorMittal has become the fifth steel company to be included in the Dow Jones World Sustainability Index, which tracks the share prices of the most sustainable companies.

The index includes the top 10% of the world’s 2,500 biggest companies, selected according to a rigid system which measures long-term economic, environmental and social performance, says François Vetri of Sustainable Asset Management (SAM), the company which designed the methodology.

ArcelorMittal’s commitment to cut CO2 emissions by 8% per tonne of steel produced, a 24% reduction in the group’s lost time injury frequency rate, improved trade union relations, $31.3m of investment in communities via the ArcelorMittal Foundation and $253m of investment in research and development seem to have bolstered ArcelorMittal’s scores, Steve John, the company’s manager for socially responsible investing, said in interview with Steel Business Briefing.

Indices such as the Dow Jones Sustainability Index and FTSE4Good play a role in the company’s internal benchmarking system, providing clues as to where improvements can be made and milestones in the developments in corporate responsibility, John added.

The Dow Jones index also includes Finnish steelmakers Rautaruukki and Outokumpu, India’s Tata Steel and South Korea’s Posco.

Dow Jones also publishes a sustainability index for the Asia-Pacific region, which represents the best performing 20% in terms of sustainability out of the 600 largest companies in the region. This index includes Korea’s Hyundai Steel, Australia’s BlueScope and Japan’s Nippon Steel.

Meanwhile in North America, no steel companies featured in the top “most sustainable” 20% of the region’s 600 largest companies, SBB notes.

Steel mills could leave UK to escape climate taxes

One initial response to this is how much are UK steel production costs really likely to increase in the coming decade? As far as carbon emissions are concerned, much will depend on the price of carbon. Will it be $15/t or $30/t? The UK government has promised to set a floor price on carbon, but has put off deciding where this should be set until at least the next parliament. How this has been accounted for in the report is uncertain.
And then there is the extent of free allowances… to be decided by the Commission. So the question has to be asked to what extent is this report just propaganda against EU carbon legislation?
But more generally, the vast bulk of the UK’s steel supply comes from either the UK or its European competitors, and the latter will face similar cost increases in carbon and energy: thus the implications for the UK steel-making industry in particular are not likely to be massive. The ultimate answer, nevertheless, has to be to find a way to make carbon legislation apply to all major steel producing countries and regions.

SBB 28 July 2010 Steel producers and other energy intensive companies could flee the UK to escape from the financial burden imposed by climate change policies, according to a report sponsored by the Energy Intensive Users Group (EIUG) and Trades Union Congress.

Energy bills, including costs of electricity, gas and emissions reductions schemes, could increase 18-141% by 2020, according to the Waters Wye Associates report.

“If the government continues to simply add one energy or carbon reduction levy after another on to the energy-intensive sectors, then the risk is that these industries will no longer be able to compete internationally and will simply cease to operate in the UK,” says the report seen by Steel Business Briefing.

Some companies are already unable to reinvest in infrastructure because of the increased energy tax burden and the report assesses they will fade away.

Carbon leakage, the flight of production to less regulated regions, is the likely result, the report continues. Industries such as steel provide raw materials to a host of other sectors, so when they pass through increased costs it results in higher prices further down the supply chain. This can result in rising prices and inflation, making UK produced goods less competitive.

“The very significant cumulative nature of the additional costs likely to come in under European legislation will damage the competitiveness of all EU steelmakers and limit their ability to fulfil their crucial role in a low carbon future,” says Kirby Adams, md and ceo of Tata Steel Europe.

ThyssenKrupp expects surplus EUAs in phase II of ETS

ThyssenKrupp investment strategy – note it is building power plants in Brazil to use the off gases from the blast furnaces etc and generate CDM’s, presumably for use in its European steel making ops. Quite a sensible move, I would say. Presumably ArcelorMittal is doing something similar in Brazil, but so far we have no reports of this.

SBB 19 March German steelmaker ThyssenKrupp expects to have a surplus of European carbon credits (EUAs) when phase 2 of the European Emissions Trading Scheme (ETS) ends in 2012, it tells Steel Business Briefing. For phase 3 (2013-2020), the company expects a significant deficit, and may carry over any surplus EUAs for use in this period.

For calendar 2008, the company notes that it received 21,321,000 EUAs, but that actual emissions for that year were 20,816,320 t.

A recent report by climate campaigner Sandbag claims that ThyssenKrupp also bought 5,967,000 CERs (Certified Emission Reductions) in 2008. As with EUAs, these also each count for one tonne of CO2 emissions on the ETS.

This would suggest that in 2008 ThyssenKrupp was left with a surplus of over 6m EUAs, the report claims. ThyssenKrupp declined to comment on this when asked by SBB.

Meanwhile, CERs normally trade at a discount to EUAs on the international markets. This suggests TK could have saved several million Euros by using bought CERs and keeping the EUAs. ThyssenKrupp did not confirm this, but said that any income from emissions trading was taken by higher electricity costs. In Germany, up to a fifth of compliance needs can be met through CERs.

ThyssenKrupp also comments that in Brazil it is building three projects under the Clean Development Mechanism that should yield additional CERs. These will recover heat and use it in a combined cycle power plant, a first for the Americas. The projects could yield 5.3m t of carbon credits over 10 years, the company tells SBB.

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