Posts Tagged ‘SSAB’

European mills see differing profits from carbon credit sales

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.

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SMA recognizes innovation, sustainability and safety efforts

SBB 16 May The Steel Manufacturers Association recognized a number of companies and individuals Tuesday at its annual members conference in Washington, DC, highlighting achievements in US minimill steelmaking innovations, safety, environmental stewardship and community involvement.

SMA chairman and Nucor president John Ferriola presented the 2012 SMA Achievement in Innovation award to CMC Steel Arizona for CMC’s partnership with Danieli Corp to build the first continuous cast/roll/cut-to-length micro mill, which enables cost-effective steel production at smaller steelmaking facilities.

The Don Daily SMA Achievement in Safety award was given to CMC Steel South Carolina and SSAB Alabama for what the SMA called their “leading role in promoting safety improvements in the EAF steel industry.”

SSAB Alabama and Keystone Steel & Wire received the 2012 SMA Achievement in Environmental Stewardship and Recycling award for their extensive recycling programs that promote the principle of sustainability. SMA’s member companies account for over 75 percent of total US steel capacity, and utilize a feedstock almost entirely composed of recycled scrap metal.

The 2012 SMA Achievement in Community Involvement Award was presented to Evraz Pueblo, CMC Steel Alabama, Nucor Decatur and Nucor Tuscaloosa. Evraz Pueblo was recognized for assisting veterans, who comprise a quarter of the facility’s workforce, with re-entering civilian life and finding employment within the steel industry. CMC Steel Alabama was recognized for relief provided to the Birmingham community following tornadoes there in April 2011. Nucor Steel Decatur and Tuscaloosa were also recognized for April 2011 tornado relief efforts.

Chinese autos to use more high strength steel, cut CO2 emissions

SBB 17 May Swedish steel company SSAB predicted there will be more demand for high strength steel from auto makers, which would help to reduce a car’s CO2 emissions Steel Business Briefing learns from a company press conference in China last week.

According to Kennet Olsson, SSAB’s marketing and business development manager, high strength steel is mostly used in a car’s body frame and key safety components including bumpers and door beams. The total amount of steel used in a passenger car is generally around 800-900kg, with about 68kg of that being high strength steel at present.

Olsson predicted that the amount of high-strength steel used in a passenger car may increase to 204kg by 2020. Since high strength steel such as SSAB’s Docol product is stronger and lighter than traditional auto sheet, it can help to lower a vehicle’s weight by 25%, which helps to lower fuel consumption and thus contribute to a reduction in CO2 emissions.

China’s Chery Motor and ChangAn Motor are now in the process of studying using lightweight materials in their manufacturing process, as SBB reported.

However, there are still some challenges to overcome. An R&D engineer from Chinese passenger car producer, Haima Motor told SBB high-strength steel is difficult to mould and therefore it is not very popular with Chinese auto makers. He expects the use of high-strength steel in China to increase as moulding technology matures as Chinese auto makers are looking to enter the green vehicles market.

ArcelorMittal has no plans to sell EU carbon allocations

Yet another report on the EU steel industry’s surplus EUAs: this time from Sandbag. I would say it is fairly inevitable that the steel industry in Europe has excess allowances for 2008 and 2009, given the 30% decline in crude production in the EU in 2009. And given the declining cap on allowances/emissions in phase 3, also fairly predicatble that the mills would want to hang on to most, if not all their EUAs.

SBB 12 March ArcelorMittal has no plans to sell its surplus EUAs (European Union Allowances) gained under the EU’s carbon Emissions Trading Scheme (ETS). Moreover it tells Steel Business Briefing, any proceeds from any possible sale in the future would be reinvested into improving the company’s energy efficiency.

A recent report by UK-based climate campaigner, Sandbag, suggests ArcelorMittal accumulated a surplus of 14.4m EUAs in 2008, worth some €200m, and a further 42m EUAs in 2009. These figures were not confirmed by the company.

The report also claims SSAB, Corus, Salzgitter and US Steel gained surplus EUAs. The second largest surplus was held by SSAB which reportedly gained 3.25m EUAs in 2008. Again, these figures were not confirmed to SBB by the companies in question.

But ArcelorMittal has told SBB it had expected a deficit of EUAs in 2008 as the new regulations for Phase II of the scheme took effect. But cut backs in production during the downturn in 2008/9 lead to a reduction in emissions, generating a surplus in EUAs.

Though the EUAs have a high sale value, ArcelorMittal says it takes the long view and may need surplus EUAs in the future. Its emissions will increase as production picks up. Surplus EUAs carried into Phase III (2013-2020) could be used to cover excess carbon emissions in this period, the company notes.

Over the three years 2007-2009, ArcelorMittal made a $108m net gain from the sale of purchased international carbon credits, according to its latest annual report.