European steel markets are developing customers interested in securing low carbon emissions-based steel products at higher prices, according to the Austrian Mining and Steel Association.
New low-emissions steel plants and investments will require breakthrough technologies, finance and competitive energy prices, as well as supportive markets and legislation, Roman Stiftner, managing director of the Austrian Mining and Steel Association, said June 22.
“We need the customers, we need a green market,” Stiftner said in a presentation to the Sustainable Steel Strategies Summit, in association with Steel Times International.
“We are seeing already that there are a lot of customers that are ready to pay a bit more for so-called green steel, and therefore maybe for a different price level,” Stiftner said. “I think this is a good situation that we have all this transformation available in the society and together with industry we can solve it.”
Higher production costs for low-emissions steel and demand for increasingly high-grade steel raw materials and clean energy as well as metals supporting the energy transition, will need to be supported by consumers and regulation, such as the EU’s proposed Carbon Border Adjustment Mechanism (CBAM), he said.
Austria’s Voestalpine plans to use hybrid and hydrogen-based steel technology in several phases with renewable power to slash emissions by 80% in 2050, which will likely increase operating costs, said Stiftner. ArcelorMittal is using hydrogen and carbon-based steel processes at several sites in Europe to cut emissions and is already selling flat steel with certificates for carbon emissions reductions achieved.
Steelmakers SSAB and Ovako are working with truckmaker Volvo Group on separate initiatives to use hydrogen-based steel products, with lower emissions. SSAB and partners produced its first hot-briquetted iron from the HYBRIT direct reduction iron pilot plant in northern Sweden, using green hydrogen biofuels-fired iron ore pellets, which will be used to make steel for trials with Volvo.
Ovako said June 22 it is developing Sweden’s largest hydrogen facility with a 17 MW electrolyzer at Hofors for heating steel, in collaboration with Volvo, Hitachi ABB Power Grids Sweden, H2 Green Steel and Nel Hydrogen. The investment of SEK180 million ($21 million) is supported by the Swedish Energy Agency, via the Industriklivet initiative.
Steelmakers may need a financial state aid regime for green sustainable investments, in addition to the CBAM.
“We have to finance this transition, we have a lot of funds available in the EU, and overall we are now on the way to find a sustainable financing regime, a so-called taxonomy regime” Stiftner said. “Definitely the steel sector must be a part of it, and must be the main affected sector in a positive way for sustainable finance.”
Stiftner is also managing director of the Austrian Non-Ferrous Metals Association and Secretary General of EUMICON, the European Mineral Resources Confederation.
— Hector Forster