Labelling steel products’ carbon footprint based on scrap usage risks misleadingly equating the more sustainable electric arc furnace steelmaking process with the significantly more carbon-intensive integrated one. This has prompted objections from the EAF industry, which has already made significant CO2 reduction investments, according to Giovan Battista Landra, AFV Beltrame Group sustainability and environment director.
Despite significant investments in CO2 reduction and efficiency improvements, the EAF sector faces an “enormous” burden to further cut emissions, while battling proposals that favour primary steelmaking and “misinform the market”, Battista said at the Kallanish Europe Steel Markets 2024 conference in Milan last week.
AFV Beltrame Group is a 100% EAF, 100% scrap-based steelmaker, noted Carlo Beltrame, chief executive of Beltrame France and Romania. State aid for BF-BOF mills is creating an unlevel playing field in Europe for EAF mills, he added.
“In reality, the steel industry is an electrical furnace, too!” he exclaimed. “Europe is creating a different level playing field … Inside Europe, we have a different kind of approach …we have a different state aid on CO2.”
The American model of protectionism, exemplified by Section 232, should be an example for the EU, Beltrame continued. ETS will dramatically affect the cost structure of blast furnaces in Europe after 2027 and even more so after 2030, whereas EAFs will not face such burdens.
If Europe adopts a “buy European” or “buy green European” policy, it will simplify and accelerate the energy transition. Adding a premium, such as €200/tonne, to the price of green steel products could drive the market to find solutions more quickly and effectively, Beltrame said.
Meanwhile, unlike the automaking sector, which is reportedly ready to pay a premium, the construction sector is not yet prepared to do so, he added.
Despite having a far-lower-than-average carbon intensity, its production, mainly used in the construction sector, does not get a premium over the regular steel price in the market. The green revolution should be driven by market demand, Beltrame emphasised.
The steel industry’s transition towards net-zero emissions requires significant advancements in hydrogen-based direct reduced iron (H2-DRI) production plants and full-scale high-power electrolysers, Battista noted.
The availability of abundant renewable or non-fossil energy sources, such as small modular reactors and Generation 4 nuclear reactors, is crucial. Enhancing energy transmission and distribution networks is also essential. Additionally, developing innovative technologies like carbon capture, utilisation, and storage (CCUS) or direct air capture (DAC) is necessary, along with improving efficiency in plant engineering, operations, and maintenance procedures, Battista said.
From a business standpoint, increasing the use of steel scrap raises concerns about its availability, cost, and quality, considering it is a critical raw material at EU level. Strengthening secondary raw material production and supply chains is vital for promoting a circular economy while reducing bureaucratic burdens. Adopting an open-minded and technology-agnostic approach to greenhouse gas emission reduction is important. Significant public policies and financial resources are required to ensure an affordable green transition without causing heavy industrial drawbacks, Battista concluded.
Elina Virchenko UAE
