Posts Tagged ‘energy-efficiency’

China’s seamless pipe sector must meet low-carbon goal

A welcome intervention from China focussing on cutting back on inefficient seamless tube production, unfortunately without any numbers to back it up.

Steel Business Briefing 8 February 2011 China’s steel industry will be crucial in determining whether the country achieves its low-carbon-economy goals during the new five-year plan (2011-15).

To meet these goals, its production capacity for seamless pipes – purportedly the most energy-intensive steel product – must be controlled by lowering the proportion of seamless in the pipe mix. This is the view of pipe expert Peng Zaimei, writing recently in China Metallurgical News (CMN), the organ of the China Iron & Steel Association.

Peng argued that seamless pipe production processes necessitate “excessive energy consumption” which results in higher carbon emissions compared with other steelmaking processes. He declined to provide precise data to support his claim, however.

His suggestion was that seamless production in China – which accounts for 50% of the world’s total seamless output – should be “controlled” by weeding out smaller, inefficient producers that usually lack their own round billet capacity and generally produce low value-added products.

The inference is they should be persuaded to diversify into welded pipes to reduce the ratio of seamless in overall output, as in other countries. Seamless accounts for about 40% of China’s total pipe production, much higher than the 30% in Russia, 18% in the US, 15% in Japan and 1% in Korea, according to CMN.

Just how the smaller non-integrated seamless producers should be “controlled” Peng does not say.

Steel Business Briefing notes China’s seamless pipe capacity has reached 30m tonnes/year. But the China Steel Pipe Association has warned that the country’s capacity continues to grow, with more expansions planned.

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Germany switches sides to approve CO2 benchmarks

The proposed benchmarks for industrial greenhouse gas emissions are no expected to be confirmed by the European parliament later this year. Eurofer still believes that they have been set too low and estimate that the European steel industry could face additional costs of some €1.5-3bn per year. According to SBB‘s broad estimates this could add some 2.5-5% to average European integrated steelmaking costs. However, the most efficient plant in Europe is more likely to see an increase of under 0.5%.

SBB 20 December 2010 The greenhouse gas (GHG) benchmarks for the European steel sector were approved last week after the German environment ministry abandoned its opposition, Steel Business Briefing understands.

The German environment ministry had opposed the benchmarks, presumably as they were too low, and had the power of veto. However, it changed its position to vote in favour at the last minute. The ministry simply “didn’t feel much support” for its view from other governments and decided to compromise, it tells SBB. It described the final decision as well balanced.

The benchmarks will be used to determine the volume of free emission allowances given to the steel industry in phase III (2013-2020) of the European Emissions Trading System (ETS). Polluters which have insufficient allocations to cover their emissions will have to buy in more permits.

Indeed, the agreed benchmarks are still ‘far below where they need to be’, Eurofer’s Axel Eggert tells SBB. They supposedly represent the average of the 10% most efficient plants in terms of GHG emissions, but the benchmark for blast furnaces is still some 7% below the most efficient in Europe, Eurofer suggests.

The result will lead to significant added costs for steel companies in Europe “compared to steel companies that produce steel in regions which do not have similar CO2 costs’, warns ArcelorMittal in a statement sent to SBB.

China’s energy conservation drive cuts steel output

Lets wait and see if this is really an effective way to save enery, and cut steel production

SBB 2 Sept 2010 Although the Chinese domestic flat steel market remains stagnant due to lack of demand, some market watchers believe the government’s order for mills to control their energy consumption within annual targets will cause China’s steel output to decline from September, which might help boost prices.

Zhejiang province’s Ningbo Iron & Steel has already idled one of its two blast furnaces since 1 September, complying with a provincial government order to rein in energy consumption within its quota. As a result, Ningbo I&S will loss around 170,000 t of HRC production every month from September-December, as Steel Business Briefing reported.

Meanwhile, Jiangsu province has also issued orders relating to energy conservation at flat steel mills in the province such as Shagang and Nanjing Iron & Steel. As a result, Nanjing I&S will lose about 50,000 t of crude steel in September, while Shagang will only able to deliver 40% of the contracted HRC volume to its agents in September. But Shagang’s HRC output reduction is also partly a result of blast furnace damage.

A Guangzhou-based market watcher says so far only Zhejiang, Jiangsu, Hebei and Shanxi have issued energy conservation orders to their local mills. However, if more provinces join in later, China’s steel output might fall in the next few months. So far most of the affected mills are longs steel producers, but some say flat producers may follow.

European carbon prices: ‘underlying trend is up’

High carbon prices work two ways for the steel industry. On the one hand, they encourage more efficient and new ways of production for the integrated producers. On the other hand, if mills need more EUAs, they become more expensive to buy. Hence the benefits of CERs, particularly from within one’s own group.

SBB 3 September 2010: European Union Allowances (EUAs) closed at €15.2/tonne on 31 August on the London-based European Climate Exchange (ECX). This was almost level from last week’s €15.3/t but up over €1/t from the end of July.

Recent price rises came largely from speculators as utility companies are still out of the market, Matteo Mazzoni of Italian economic institute Nomisma Energia tells Steel Business Briefing. Nothing is expected to affect the market significantly before the end of September, he adds.

However, Emmanuel Fages of carbon market analysts Orbeo tells SBB the underlying trend is up. Though prices have levelled off in the last week, prices are still higher than a month ago and could continue to rise. EUAs could touch €17/t before the end of Q3, he suggests.

EUAs can be used to account for greenhouse gas emissions equivalent to one tonne of carbon dioxide under the European Emissions Trading System (ETS). By the end of phase II (2008-2012) of the ETS, a number of new facilities will have joined the scheme. European states have set aside EUAs in a New Entrants Reserve (NER) to cover the emissions of these plants.

A new report by Orbeo suggests that European states will have a net surplus of 88m EUAs which will end up on the European markets. However, this is less than many analysts expected, Fages tells SBB. If the number of new entrants increases significantly as a result of the recovering economy, a net deficit of 61m EUAs could be seen.

“Factor Five” outlines ways to cut steel’s energy intensity

SBB 20 April Factor Five, published by Earthscan in the UK, is a new book that aims to reduce the energy intensity of industrial production by 80%. It is a heavyweight publication, but its comments on steel are covered in around just 10 pages. Other chapters are devoted to reductions in related sectors, including building and transport, as well as possible legislative changes to accelerate moves to greater resource efficiency and a reduction in CO2 emissions.

The book’s focus is primarily on increasing the proportion of EAF steel; but as it accepts that insufficient scrap is likely to be available, it also advocates an increase in DRI production. Other proposals include direct strip casting, alternative fuels plus heat and power recovery. A clear comparison of energy use in the different steel production routes would have been helpful.

The book does not examine the possibility that the energy employed and CO2 generated from the production of certain steels would be less than those used/emitted in the lifetime of a particular application. A recent German study showed that cuts in emissions from using steels able to withstand high pressures and temperatures in power stations would significantly exceed the emissions resulting from production.

In order to back up its claim that energy use could be significantly reduced, Factor Five takes its statistics from many sources, some of which are now out of date. However, it forcefully argues that steel makers can and should reduce their energy use – from a baseline it claims stands at around 28GJ/t in 1995, to about 12GJ/t in the future.

Rautaruukki results show small rise in CO2 intensity in ’09

Transparency on CO2 emissions is positive: all steel producers should be obliged to publish these and similar numbers by steel making location/operation. It would make the companies themselves more aware of the results of their activities. Its true that not a lot can be done in terms of emissions reductions in the short term, but some improvements in efficiency can be made. In addition, companies can estimate the impact of their products in terms of life cycle contributions, as Rautaruukki has done.

SBB 15 March Rautaruukki tells Steel Business Briefing that the small increase in the average tonnage of CO2 emitted per tonne of crude steel in 2009, compared with 2008, was due to the relatively low capacity utilisation rate in the year.

This meant that the Finnish company’s molten iron was produced less efficiently last year. Indeed it was below the minimum level necessary to ensure the efficient operation of the reduction process in the blast furnace, SBB was told.

According to figures in Rautaruukki’s annual report for 2009, the company produced 3.5m tonnes of CO2 and 1.9m t of crude steel in 2009. This gives an average of 1.85 t of CO2/tonne of crude steel, up from 1.78 t of CO2/t steel in 2008. The company’s goal is to improve the energy efficiency of production by 9% between 2005 and 2016.

Meanwhile, looking at the impact of Rautaruukki products as measured through their life cycle, the company says it reduced global CO2 emissions by 610,000 t. It did this by recycling steel and various mineral products. “Depending on the grade of steel being made, 20-30% of recycled steel was used in steel making,” it comments.

This cut in emissions reflects the specific range of products that Rautaruukki is currently producing. It highlights specialties for the construction and renewable energy sectors.

Russian mills fear carbon-based border controls on steel

Several of the presentations at the recent 15th CIS Metals Summit, organised by Adam Smith Conferences in Moscow focussed on carbon issues. The vice president of the Russian Union of Metal Exporters, Leonid Shevelev, looked at methods of measuring carbon dioxide emissions and detailed proposals for reducing from Russia’s steel mills. He focussed on several companies including Severstal.

Another paper – from Sergei Sitnikov, from Baker & McKenzie, analysed the recent changes in Russian legislation on Joint Implementation of carbon reducing projects. JI is part of the Kyoto Protocol. 

Other speakers looked at sustainability in financing, including the Equator Principles.

Roger Manser