Eurofer, associations, call for less restrictive framework for EU hydrogen market introduction

European Steel Association Eurofer July 15 called for the European Commission to set out a practical framework and timetable for phasing in the European Union’s hydrogen market, including a lengthening of the proposed transitional period for its introduction until at least 2030.

Proposed restrictions on industrial CO2 use also need to be reconsidered and the definition of possible CO2 sources broadened, Eurofer, along with other European industrial associations, said in a joint statement.

Prolonging the introductory phase for a hydrogen market will not only allow more time for electrolyser construction but would also take into account the lead times for new renewable energy generation installations, with offshore wind projects taking up to seven years to build, according to the statement.

“Our sectors crucially depend on the large-scale availability of renewable fuels of non-biological origin, or RFNBOs, supplied cost-competitively and securely across Europe,” Eurofer said.

A longer time frame would also allow steelmakers to continue producing during the introductory period to meet global steel demand, without seeing their investments in production capacity curtailed by restrictions on Carbon Capture, Utilization and Storage technologies, Eurofer said. Integrated steelmakers are concerned about the narrow time window being proposed for use of CCU and CCUS technologies under the EC proposals, it indicated.

CCS is currently seen by some quarters as the only available technology to decarbonize blast-furnace steelmaking in the short to medium term. Various sources see blast furnace steelmaking continuing for decades due to the massive capital investment they represent.

“The proposed sunset date (2035) for the use of industrial CO2 sources would immediately lead to a halt in CCU investments today. CO2 emissions from fossil sources are set to be reduced gradually by multiple regulatory files, including the Renewable Energy and Energy Efficiency Directives and the EU Emission Trading System, leaving only process-related and thus unavoidable hard-to-abate or not-to-abate emissions,” the joint statement said.

“CCU is an effective solution to capture those remaining emissions and convert them into valuable transport fuels by using CO2 emissions that would have been otherwise emitted to the atmosphere,” continued the statement, also signed by associations from the EU mining, chemicals, cement, ceramics, fuels and fertilizers sectors. “Storage options for captured carbon may not be accessible or even allowed in certain locations. This unjustified time limitation would have significant profitability implications as an operating lifetime of max. 13 years is not sufficient to recoup the investment costs for CCU and would therefore discourage investments that enable meaningful recycling and reuse of CO2 emissions.”

UK Steel sees CCUS ‘advantage’

UK Steel, an association grouping UK steelmakers, who will not be subject to EU hydrogen market rules due to the UK’s recent exit from the EU, said this week that the UK may gain “a substantial advantage” from the use of CCUS in its steel industry decarbonization.

“Within a 2035-timeframe, CCUS is the only available technology to reduce emissions from ore-based production significantly,” UK Steel said in its “Net Zero Steel – a vision for the future of UK steel production” report. “This will be especially true for the production of specific steel grades, which require ore-based production. Ore-based production is essential to meeting global steel demand and will continue to be beyond 2050. To prevent significant climate change, the world has to solve the decarbonization of ore-based steel production. There will be significant commercial opportunities from the associated intellectual properties with any decarbonized ore-based production – giving the UK a substantial advantage.”

CCUS captures CO2 from industrial process and transports it for storing underground in depleted gas and oil fields or deep saline aquifer formations. CCUS can capture 80-90% of ore-based steelmaking emissions, although maximizing the capture rates from blast furnaces could involve “significant rebuilding of the blast furnaces…. increasing capital costs,” the UK Steel report said.

The July 15 statement signed by 18 EU industrial bodies follows the EC’s publication of the drafts for the outstanding RED II Delegated Acts on Article 27.3 (‘Additionality’ Delegated Act) and Article 28.5 (Greenhouse Gas Reduction Methodology).

“The signatories of this letter appreciate the European Commission’s call for feedback,” the associations said.

— Diana Kinch