Feralpi diversifies energy procurement
Italian long steel producer Feralpi is prioritising the transition to renewable energy in order to reduce its carbon footprint. The company recently entered into a ten-year Power Purchase Agreement (PPA) with energy provider Enfinity Global, which will see the latter supply 23 gigawatt hours of solar energy annually.
Feralpi is set to benefit from a 15.5 megawatt solar power plant in Emilia Romagna, located in northern Italy. The plant is currently being constructed and is projected to become operational by the end of 2025. With this supply, the steelmaker will be able to reduce its annual CO2 emissions by 8,625 tonnes.
Feralpi plans to make substantial engineering investments to electrify its production cycle and enhance overall efficiency. It has made a firm commitment to significantly reduce carbon emissions from its production process. By 2030, it aims to cut scope 1, 2, and 3 emissions by 50% for its hot rolled steel, compared to 2022 levels.
It has also committed to decreasing the remaining scope 3 greenhouse gas emissions associated with the procurement of goods and services, activities involving fossil fuels and energy, distribution and transport, and waste generated during processing. The goal is to reduce scope 3 greenhouse gas emissions by 25% by 2030, in comparison to 2022.
As part of its decarbonisation plan for the coming years, Feralpi will incorporate the goals of the European Science Based Targets Initiative (SBTi). The firm has received official approval from the SBTi for its decarbonisation objectives.
The SBTi initiative assists companies in their transition to a low-emission economy. It is the result of collaboration between the ex-Carbon Disclosure Project (CDP), United Nations Global Compact, World Resources Institute (WRI), and WWF. SBTi has established the “core boundary” which outlines the reporting perimeter encompassing the key emissions of the steel supply chain (see Kallanish passim).
Italy’s steelmakers are facing significant challenges due to soaring energy prices. Feralpi’s rival, Alfa Acciai Group, reported its financial performance in 2023 was affected by high energy costs. Meanwhile, Arvedi Acciai Speciali Terni has made the decision to temporarily suspend one of two electric arc furnaces at the Terni site for a week (see separate article).
Natalia Capra France
Arvedi Acciai Speciali Terni to idle one EAF on energy costs
Arvedi Acciai Speciali Terni (AAST) has decided to temporarily halt one of the two electric arc furnaces (EAFs) at the Terni site for a week, according to a company representative.
Italy has been grappling with soaring energy costs since August, which has led to the current stoppage. The company has scheduled a temporary shutdown of an EAF for approximately one week, starting at the end of September.
It states in a note obtained by Kallanish that the high cost of electricity in Italy, which is three times higher than in other European countries where AAST’s competitors are located, is negatively affecting the relaunch of the Umbrian plant.
This is causing frustration as it hampers the progress made in efficiency improvements and undermines the benefits of the significant investments already made.
In an effort to offset the rising energy prices, the company implemented various cost control measures, including the purchase of more affordable Asian slabs. Nevertheless, the competitiveness gap persists not only in comparison to Asian producers, but also to other European steel producers who enjoy considerably lower energy costs.
From 1 January to 31 July, the Terni plant had an average payment of €97 per megawatt-hours ($107). In comparison, stainless steel producers in France paid €21/MWh, Germany paid €32/MWh, Finland paid €35/MWh, and Spain paid €62/MWh.
“This results in a significant distortion of competition, leading to severe consequences for the majority of Italian producers of stainless steel,” AAST warns.
The company is advocating for the matter to be discussed at national and European levels, with the backing of Umbria Region, in order to secure a reasonable energy cost. AAST previously generated electricity on-site until the government seized control of the power plant and shut it down.
The steelmaker is requesting permission from authorities to resume on-site electricity production by restoring the original conditions of self-production through the existing direct connection to the ENEL plant in Galleto. This would ensure a reliable and cost-effective supply of electricity that is comparable to similar supply in European countries (see Kallanish 9 September).
Natalia Capra France