Posts Tagged ‘Steelmaking’

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.

Tata Steel to cut £850,000/year off Yorkshire energy bill

SBB 24 October Tata Steel intends to invest £4.5m ($7.2m) this year in energy efficiency measures at its engineering steels plants in South Yorkshire, UK, Steel Business Briefing learns. It hopes this will lead to a £850,000 reduction in its annual energy bills.

Around £2.5m will go on the steelmaking operations at Rotherham and a further £1m on quality inspection equipment at the bar mill. This will save a combined 9,000 megawatt hours of electricity annually, Tata says.

The remaining £1m will be used to upgrade a reheat furnace at its Stocksbridge plant, reducing gas consumption by 10,000 MWh per year. The investments will also cut carbon dioxide emissions by around 7,000 t/y, the company claims.

Severstal to cut emissions making energy from waste methane

In addition to direct emissions from steelmaking, emissions from the extraction of raw materials also contribute to steel’s total carbon footprint. However, this also gives vertically integrated steelmakers the opportunity to invest in energy efficiency across the supply chain. One option is to produce power from mining waste gases, insuating the mining operation from volatile energy prices and reducing overall greenhouse gas emissions.

SBB 28 Sept Vorkutaugol, the coking coal mining division of Russian steelmaker Severstal, will start recycling methane gas collected from its Severnaya mine, processing it into heat and electricity at the 800m rouble ($25m) worth gas generating power plant it is preparing to commissioning in the first quarter of 2012, Steel Business Briefing learns from Vorkutaugol.

The 18 megawatt plant will cover 100% and 70% of electricity and heat energy needs at Severnaya. When fully operational, it will enable Vorkutaugol to reduce its emissions by 0.5m t/y in carbon dioxide equivalent, as well as to save up to 300m roubles/year, which may be diverted onto operational needs and other investments, SBB understands.

Based in Russia’s northwestern Komi republic, Vorkutaugol operates four mines: Severnaya, Vorkutinskaya, Zapolyarnaya and Komsomolskaya, and open pit Yunyaginsky. Their combined output is expected to amount to 8.5mt this year, as SBB previously reported.

Aperam’s Timóteo completes coke-to-charcoal switch

Measures to reduce the carbon footprint of steelmaking can also help to reduce steelmaking costs, if the situation is right.The use of charcoal has its limitations, it can only be used in small blast furnaces for example. However, for Aperam in Brazil, which uses small-scale blast furnaces and has a charcoal producing subsidiary operating nearby its plant, changing its raw materials can reduce costs, provide a stream of carbon credits and improve its environmental credentials.

SBB 27 July Stainless, electrical steels and special alloys maker Aperam’s Brazilian unit Timóteo has finalized the conversion of its No 2 blast furnace fuel from coke to charcoal, Steel Business Briefing learns from the company.

The mill said last year it would invest R$175m (US$114m) to replace imported coke and metallurgical coal with domestically sourced charcoal in a move that will result in “a total replacement of this power matrix.”

SBB estimates the cost of charcoal is around one-third that of coke, with the use of the former allowing Aperam to earn carbon credits.

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.

New ‘green’ ironmaking passes first test, funding approved

Current steelmaking technologies only have limited scope for reducing greenhouse gas emissions. For the industry to achieve significant cuts in emissions, of 50% or more, breakthrough technologies will be needed. Although these are still several years away from commercial operation, a number of research projects are achieving results in their test phases. In particular part private, part state-funded projects in Japan, Korea and the EU are developing new technologies.

SBB 1 July Tata Steel’s 60,000 t/y HIsarna ironmaking pilot plant in IJmuiden has successfully completed its first test campaign, the company tells Steel Business Briefing. It is now preparing for a second round of tests in October or November.

The project has also been approved for further funding from the Research Fund for Coal and Steel (RFCS), which distributes around €55m ($80m) per year to industrial research projects in the sector. The project has been selected for funding by the RFCS and representatives of European member states, and received final confirmation from the European Commission, SBB understands from a source close to the RFCS.

The first round of tests was a success and only minor alterations are needed before the second round, Tata says. The new tests aim to achieve stable, longer operating periods.

Because the project is part of the Ultra-low CO2 Steelmaking (ULCOS) programme, further tests can only be conducted once representatives of other ULCOS members and officials are available to be present, in accordance with ULCOS protocol, SBB understands.

ULCOS is a consortium of steelmakers and others that aims to develop new technologies which can cut emissions from steelmaking by at least 50%.

The technology is jointly owned by Tata steel and Rio Tinto and can produce hot metal directly from iron ore fines and low-volatile coal, eliminating the need for coking and sintering. This could result in a cut of 20% in emissions than that produced by a standard blast furnace; emissions could be reduced a further 60% by using carbon capture and storage.

CISA: China should delay expanding EAF sector

As the steel industry is increasingly under pressure to reduce its greenhouse gas emissions, one obvious solution is toswitch to EAF steelmaking, which emits around a quarter of the CO2. However, unlike iron ore, scrap cannot simply be dug out of the ground. EAF production is therefore limited by teh amount of scrap metal available. This option is therefore limited in teh key developing economies where iron and steel emissions have soared in recent years.

SBB 23 May China should not be considering expanding its electric arc furnace steelmaking sector significantly for the next few years. Chi Jingdong, deputy secretary general of the China Iron & Steel Association (CISA), says it is too early to consider expanding the sector, even though EAF steelmaking is more energy-efficient.

Addressing a recent conference in Guangdong attended by Steel Business Briefing, Chi admitted that EAF steelmaking can help China’s steel industry to reduce its reliance on imported iron ore and to cut its carbon emissions.

But “China’s barrier to more EAF steelmaking is its limited ferrous scrap supply, since the country has a relatively lower accumulation of steel compared to developed countries,” he warned.

Chi further predicted that after 2020 China’s scrap resources will peak and then domestic scrap prices will drop to favourable levels. “At that time, mills may phase in more EAFs to replace their blast furnaces and converters,” he said.

Currently, most Chinese mills prefer to produce steel with BFs and converters due to the country’s tight scrap supply and lower production costs. “Mills won’t find using EAFs economical unless they can get a financial subsidy,” a major eastern mill source tells SBB.

Steel made via EAFs accounted for just 9.7% of China’s total crude steel output for 2009, while the global average percentage was 28.1% during the same period, according to CISA data.