Posts Tagged ‘steel’

Salzgitter strip unit is 92% self-sufficient in electricity

Steelmakers may still be concerned about the cpotential costs of Europe’s Emissions Trading System. Although costs will likely be less than estimated by many (see below) the additional cost of power is still a worry. However, this does not change the fact that captive power supply should still cut costs. Power generators expect to be able to pass on thier costs from the ETS to customers in full. As such the additional cost to captive production should be equal to the additional cost of buying in power. Meanwhile, steelmakers with captive power will be able to choose how to allocate their allocated carbon credits, potentially making their additional costts lower.

 Platts SBB News – 1 June 2012 German steelmaker Salzgitter is around 60% self-sufficient in electricity across its strip steel plant in Salzgitter and its Peiner beams mill. The electricity generated at the strip mill site – by two in-house power plants – has an annual market value of around €150m, the company told Platts Steel Business Briefing.

The two 110 megawatt units were finished a few years ago and have since been optimised. Strip production in Salzgitter is now 92% self-sufficient, whereas the Peiner meltshop still relies 100% on external power suppliers.

Together, the Salzgitter stations produce roughly one terawatt of power per year, all of which is consumed on site, the company said. Self-supply creates an annual saving for the company of up to €25m, according to the firm’s spokesman.

However, changes to the European Union’s emissions trading scheme for carbon-dioxide from 2013 onwards could mean that Germany’s steel industry incurs extra costs totalling up to €485m/year, according to Salzgitter’s comments to the German press.

This action would add additional costs of between €17 and €37 per tonne of steel produced, according to Salzgitter’s ceo, Heinz Jörg Fuhrmann.

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.

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.

Worldsteel chief: ‘combined solution’ key to climate change

SBB 20 April World Steel Association director general Edwin Basson said all industry – and all industrial nations – must be included in ongoing efforts to curb carbon emissions, not just steel.

Basson, in an address during Platts Steel Business Briefing’s third-annual Green Steel Strategies conference in Berlin, called regulations aimed at reducing so-called tailpipe emissions “nonsensical” and said a life-cycle assessment approach is essential in making future strides.

Worldsteel, whose membership includes 17 of the 20 largest steelmakers in the world, believes the global steel industry is already a key player in moving toward greener industrial output, even as it accounts for just 6.5% of all CO2 production.

Basson pointed to the construction of the Golden Gate Bridge in 1937, which required some 83,000 tonnes of steel. “Today, only half that amount would be needed,” due to advances in stronger, lightweight steels, Basson said, adding that water recycled by steelmakers back into rivers and other bodies of water also is often cleaner than when it was extracted.

“Clearly, it is impossible to solve he climate change issue by focusing on the steel industry,” he said. “The future solution must be a combined solution.” Also, any near-term results gained by reducing steel’s CO2 output will be limited. “This is not going to give us results today or tomorrow. We will not halve carbon emissions in the next five years,” Basson said.

Matthias Finkbeiner, professor of life-cycle analysis at the Berlin Technical University, said “hardly any measure is a silver bullet.”

Finkbeiner said the UK’s total CO2 emissions increased by 19% since 1990, even as its domestic industry reduced overall emissions by 12%. The reason: the UK was a net importer of emissions related to the consumption of products made in other regions not as environmentally conscious.

China’s steel industry tops 20m UN carbon credits

Earlier this year, China’s steel industry earned its 20 millionth carbon credit. Projects such as the Clean Development Mechanism have helped steelmakers, especially in China and India, to find financing for energy efficiancy investments. With India introducing its own energy efficiency certificate trading suystem and China looking at various ways to price carbon these kinds of scheme are likely to continue aiding investment. To hear what other factors are driving investment in the steel industry come to SBB’s third annual Green Steel Strategies conference in Berlin on 19-20 April.

Platts SBB 10 February The total number of Certified Emission Reductions (CERs) issued to the Chinese steel industry crossed the 20 million mark this week, Steel Business Briefing understands. 33.5m CERs have now been issued to steelmakers globally.

820,320 CERs were issued to China’s Jinan I&S on 8 February, taking the company’s total issued CERs to over 5.9m. The market value of CERs has fallen to around €4/t currently but Chinese steelmakers have mostly entered into contracts with a price of around €7-8/t, analysts tell SBB.

CERs are issued by the UN’s Clean Development Mechanism to projects which lower greenhouse gas emissions. One CER is given for a reduction in greenhouse gas emissions equivalent to one tonne of carbon dioxide.

Jinan I&S earned the latest batch of CERs from a plant it has built to generate power from waste gases at a blast furnace and coking oven at its plant in eastern China’s Shandong province. The plant reduces CO2 emissions by over 2m t/y.

China and India dominate CER issuance in the steel industry, accounting for over 97% of CER granted to the industry. Jinan I&S is the second biggest beneficiary after India’s JSW Group.

Eurofer expects EC to ‘stick to the rules’ on climate change

With international climate change negotiations still making slow progress, regions are taking their own steps to tackle the issue. Steelmakers’ associations, concerned by the added cost to their members, have fought a rearguard action against stricter emissions regulations. Both European Commission’s DG Climate Action and Eurofer have argued firmly about what measures are and are not legitimate. But what is clear is that the steel industry will have to adapt to a more regulated and greener economy. To learn how the industry can adapt to, and even profit from, increased regulation, come to SBB’s third annual Green Steel Strategies conference in berlin on 19-20 April.

SBB 26 December Some EU member states are in favour of moving to a 30% carbon emission reduction target and the European Commission will present a member state-led study of the investment benefits of a 30% target in the first half of 2012, the commission tells Steel Business Briefing.

However, Eurofer says it “does not see how [the] Durban [conference] could have given grounds for any stricter targets in the period before 2020”. In particular, any increase in EU targets is to be linked to binding reductions in other regions. “None of the conditions set by the EU Emissions Trading System (and set in the ETS) have been fulfilled in Durban,” Eurofer notes.

One source states that following the relative success of international climate change negotiations in Durban, proponents of faster reductions have “more energy”.

The European Court decided to include non-EU airlines in the ETS; The commission released guidelines on state compensation for higher energy prices resulting from the ETS; and the European Parliament’s environment and industry committees have approved the removal of 1.4bn carbon phase 3 carbon credits from the ETS, in order to strengthen prices.

Before the set-aside takes effect it must be first voted in by the parliament’s industry committee, the EU member states and the plenary session of the parliament, explains Carine Hemery of carbon market analysts, Orbeo. This is unlikely to be complete before June.

EU carbon compensation may meet 60% of steelmakers’ need

EAF steelmaking produces significant;y less carbon dioxide directly than integrated steelmaking. however, EAFs are far more vulnerable to increasing energy prices. EU compensation is necessary to maintain the competetiveness of the industry. For more information on how steelmakers, rollers and distributors can ensure their businesses are economically, as well as environmentally, sustainable, come to Steel Business Briefing’s third annual Green Steel Strategies conference in Berlin on 19-20 April.

SBB 22 December The European Commission (EC) released, on 21 December, its guidelines on state aid for industry to compensate industry, including EAF steelmakers, for higher electricity prices as a result of the Emissions Trading System (ETS). However, the provision could mean only 60% of steelmakers’ additional costs are met, Eurofer tells Steel Business Briefing

Elements of the document are unjustified, agrees Ian Rodgers, policy director of UK Steel. One key issue is that the document calls for a maximum of 85% of the theoretical additional costs to be compensated, falling to 80% in 2016-2018 and 75% in 2019-2020.

The EC argues that this is to incentivise less efficient facilities to invest in energy efficiency. However, UK Steel argues that this is unnecessary as the calculation of theoretical costs already includes a benchmark. This means that only the most efficient plants could possibly receive full compensation.

The theoretical costs are also calculated using production levels from 2005-2011. For much of this period Europe was in recession and production levels were abnormally low. This would mean lower levels of compensation for EAF plants, the associations complain. Furthermore, the EC can only give a maximum figure for compensation, meaning EU member states could actually give less than this in reality.

Eurofer hopes that EU member states will support its views and force a revision of the document by the end of the consultation period in January. Germany is likely to support amendments, SBB understands and UK Steel confirms it will ask the UK government to act.