Energy transition to revive demand, coal needed: panel

European steel is currently in the doldrums, with demand weak and mills reducing capacity utilisation. However, over the longer term, the unstoppable energy transition will require huge tonnages of steel, which will need to be produced using the dominant coal-coke-based blast furnace method. European policymakers should therefore not burden BF mills so aggressively, panellists said at an industry event on Wednesday.

Poland, like the rest of the EU, saw declining output and consumption last year. Distributors have maintained low inventories since last July and there is zero sign of a demand rebound, amid a lack of public and private investment (see separate story).

At the European Economic Congress in Katowice attended by Kallanish, ArcelorMittal Poland (AMP) head of corporate governance & government affairs, head of energy & environment office Tomasz Ślęzak said although imports’ share in Polish demand is growing, he cannot imagine the country without a steel industry. AMP is preparing for an energy transformation over the next decade, he added.

Despite the European sector’s woes, the energy transition needs steel and consumer behaviour is changing to demand green steel, said Marek Akciński, vice president of Polish coal exporter and steel processor Weglokoks.

Polish state assets deputy minister Marek Wesoły meanwhile said the government recognises the need to have indigenous steel supply security. “I have the impression the EU is making a fundamental mistake – we are pushing out all heavy industry,” he commented, referring to excessive policy burdens on industry. In his eyes, the green transition is being forced by policymakers, rather than happening organically. “I don’t see the joy, the enthusiasm” within the market, he added.

Polish steel distributor association PUDS’s ceo Iwona Dybał said that while demand for green steel may still be insignificant, it will soon come, with conventional steel seen as “passe”. Ślęzak added that ArcelorMittal’s customers are already demanding green steel, because their customers want green products from them. If the firm cannot secure green energy in Poland, therefore, that will be a big problem.

The transition will require substantial government support, however, as well as a formalised green steel market, and this must happen fast, said Polish Steel Association (HIPH) chief executive Mirosław Motyka. Green hydrogen-based direct reduced iron has been touted as the preferred route, but separating hydrogen from water will require massive energy sources that hitherto do not exist.

Asked if coke has a future, Polish merchant coke producer Koksownia Czestochowa Nowa ceo Marek Serafin said he “completely believes in our product” as the BF route still makes the lion’s share of steel. “Try making steel without coal, without coke now,” he asserted.

Adam Smith Poland