As Europe seeks ways of maintaining its steel idustry in the current economic climate, one suggestion could make steelmaking more sustainable both economically and environmentally. More EAF-based steelmakign could significantly reduce greenhouse gas emissions per tonne of steel. But for this to be sustainable it would require far more significant closures of basic oxygen furnace capacity.
SBB 25 May – The construction of electric arc furnaces at currently idled integrated steelworks in Europe could be a way to secure a future for these sites, Marcel Genet, managing director of consultancy firm Laplace Conseil, told the SBB Steel Markets Europe conference this week in Brussels.
Genet said that closing completely an existing plant has a high financial cost and a strong impact on the relationships with clients. For that reason, Genet believes some of the 8-10 integrated sites currently closed or at risk of closure in Europe could benefit from the construction of electric arc furnaces. This would preserve the existing finishing lines at the site and lower significantly the investments compared to the cost of modernising some of the integrated steelworks equipment.
Europe has a plentiful supply of scrap and the price of scrap would not be impacted by the addition of 20-30m t/y of new EAF capacities. Genet noted that a number of scrap suppliers already price their scrap based on the iron ore prices.
Genet reported two contrasting examples of uneconomic integrated works in France during the 1980s. While the Neuves Maisons works in northeastern France was re-converted to EAF operation and is now producing under the control of the Italian Riva group, the works at Mondeville in Normandy ultimately faced closure after having decided to stick with the integrated route.
Laplace Conseil proposed a similar solution for the ArcelorMittal works in Liège, Belgium, back in January, as reported by Platts SBB. Crude production at the plant was halted permanently a year ago.
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.
SBB 23 April A critical lack of funding and the high cost of developing and implementing carbon capture and storage (CCS) mean it is unlikely to become widespread in the steel industry, senior advisor to the European Bank of Reconstruction & Development, Christopher Beauman told delegates at Platts Steel Business Briefing’s third annual Green Steel Strategies conference in Berlin.
Some funding is being made available in Europe, pointed out Baroness Worthington of Sandbag which campaigns for action on climate change. The European Commission has made revenues from the sale of 300m carbon credits available to CCS projects, with a current market value of around €2.25bn ($2.97bn).
However, the funding is not sufficient to counteract the huge cost of investment. A relatively cost-efficient steelmaker would become unsustainable if it carried the cost of installing CCS alone. The funding in Europe is insufficient and there is even less of it available in other regions, Beauman argued. Furthermore, the funding that is available is focused almost entirely on the power sector.
In Europe the only steelmaking CCS project remains ArcelorMittal’s project at Florange in France. This intends to develop a top-gas recycling blast furnace which will produce waste gases with no carbon monoxide, making them suitable for underground storage. Part the Europe’s Ultra-Low CO2 Steelmaking (ULCOS) project, the plant is expected to generate results by 2014.
There is some chance that CCS funding will become available in China as Beijing has noted that it is a technology it wants to develop in the current five-year plan (2011-2015). However, this too is likely to be focused on the power sector and the availability of storage sites may also be an issue, Beauman said.
In the current period of the European Emissions Trading System, steelmakers have been left with a surplus of carbon credits. This surplus may be reversed as restrictions on emissions become more stringent from next year onwards but for now these credits are a tempting way to bolster ailing balance sheets. However, the key to getting the most out of these credits is a proper strategy and some steelmakers are achieving almost double the return per credit as others, as this story from Platts Steel Business Briefing’s Daily Briefing shows.
SBB 19 March – SSAB sells surplus carbon credits as emissions fall
Sweden-based steel producer SSAB saw greenhouse gas emissions at its European plants decline in line with production last year to 5.5m tonnes of carbon dioxide. The company also took the opportunity to bolster its balance sheet by selling 4.1m surplus carbon credits.
SSAB earned SEK 275m ($40.47m) from the sale of carbon credits last year. This would suggest it earned just $9.87 for each of the credits.
The company sold most of the credits towards the end of the year when SSAB’s blast furnaces were running at low utilisation levels, a SSAB spokesperson says. Carbon credit prices fell sharply in Q4, Platts SBB notes.
ArcelorMittal earned an average of $18.6 per credit last year, indicating a more sustained sale of credits through the year, analysts suggest.
As part of the European Emissions Trading System (ETS), steelworks must report their greenhouse gas emissions and hand over one carbon credit for each tonne of carbon dioxide equivalent emitted. In the current trading period (2008-2012) steelmakers have been given sufficient carbon credits to cover their emissions. In fact they have received more than they have so far used as the allocation was calculated before the 2008 financial crisis and so actual emissions have been lower than previously expected.
SSAB was granted 36.7m credits for 2008-2012 and now has 7.5m remaining to cover emissions this year. SSAB could therefore have more credits to sell unless it increases its European steel production by around 36%. Platts SBB calculates.
SBB 20 October ArcelorMittal has been given an official licence from the French government to examine possible locations for carbon dioxide storage in what could be the world’s first steelmaking carbon capture and storage (CCS) project. The project aims to capture and store emissions from an experimental blast furnace at the company’s Florange steelworks in the east of the country.
The blast furnace at Florange will recycle waste gases back into the furnace to add to the process of reducing iron ore to iron, cutting emissions by 25%. The remaining emissions would be suitable for CCS, which would lead to a further 50% reduction in emissions. The company hopes to have results from its industrial-scale pilot plant by 2014, Steel Business Briefing notes.
The project is part of the ‘Ultra-Low CO2 Steelmaking’ (ULCOS) programme which aims to develop new steelmaking technologies that could reduce greenhouse gas emissions from steelmaking by over 50%. ULCOS is funded by a group that includes the EU, national governments and companies including steelmakers.
Although climate changeis a global issue, the failure to negotiate an international treaty to succeed the Kyoto Protocol has forced countries and regions to implement their own climate strategies individually.Steelmakers with European facilities complain that they are bearing the brunt of climate regulation, and that this puts them at a disadvantage. Recent developments in Australia are unlikely to assuage their concerns. It is only when the major steelmaking countries, especially China, begin to set a firm price for carbon emissions that the playing field will become more level.
SBB 22 June The global steel industry must do its part to reduce carbon emissions, but there “should be a level playing field,” believes Lakshmi Mittal, ceo of ArcelorMittal.
“The pressure on companies to reduce their CO2 emissions only looks set to intensify,” he predicted.
But Mittal said it doesn’t make sense for Europe to set carbon emissions standards when other parts of the world have not. This will only make production in Europe more expensive and increase it in other countries, he stated.
Additionally, Mittal said, the industry must help regulators understand that while each tonne of steel produced makes about two tonnes of CO2 – that drops over the steel’s lifetime to 0.7 t (per tonne of steel produced) because of steel’s recyclability.
“The steel industry needs to play it smart in heping to reduce CO2 emissions … but equally we need a balanced approach. Climate change is a global issue,” he told listeners.
He added, “We need to work harder to make sure the benefits of steel are understood and factored into wholistic regulatory frameworks.”
He was speaking at the Steel Success Strategies Conference in New York in June sponsored by World Steel Dynamics and American Metal Market; Steel Business Briefing was in attendance.
As environmental regulations become increasingly strict across many industries, those industries are looking for new products and new designs to help them reduce their emissions. In the auto industry this is all about light weight components. Steelmakers looking to cater to this market strive to keep thier innovations from the hands of their competitors, with varying success.
SBB 12 May The US patent and trademark office (USPTO) has preliminarily reaffirmed its decision that a patent held by ArcelorMittal for technology involved in producing aluminum coated boron-bearing carbon sheet for the automotive industry is invalid, according to Severstal North America.
“As a result of this decision, the USPTO affirmed its earlier ruling and has now held that all of the claims of the ArcelorMittal patent are held unpatentable for multiple reasons,” Severstal stated Wednesday in a release. “In anticipation of this decision, Severstal indicated that it has already developed the necessary expertise to provide the aluminum coated boron-bearing carbon steel per the specifications of the automotive manufacturers.”
An Arcelormittal spokeswoman said the company will appeal the ruling and doesn’t expect it to have any material impact on its customers, Steel Business Briefing reports.
“ArcelorMittal will now, as is normal with any and all patent owners in the course of patent reexamination procedure, prepare a response to convince the USPTO that the company’s patent is valid and enforceable,” she said. “Accordingly, ArcelorMittal is reviewing this communication and will be formulating a detailed response in rebuttal.”