German economy minister Peter Altmaier has proposed a quota system to support the introduction of green steel on the market.
Speaking at the recent Energy Summit conference organised by business daily Handelsblatt, he said that all sides are prepared to take such a step. “For example, we may discuss with the automotive industry to use a certain percentage of green steel in their material for cars,” Altmaier was quoted in press reports as saying at the conference.
He pointed to the challenges posed by the political framework for such an endeavour. Germany cannot simply go ahead and make green steel, as ultimately nobody may buy it because it is priced 40% higher than conventional material, Altmaier warned. Other possible tools to promote green steel could be contracts-for-difference (CFDs), or the introduction of an international border adjustment system.
A source at thyssenkrupp Steel confirms to Kallanish that all such tools are currently under discussion, and that the political framework necessary to pave the way for green steel is the most pressuring issue. Tk Steel intends to start making direct reduced iron, but it may take another three years before the first tonne is produced. The most time-consuming factor here is not the technology but the political issues that need to be resolved, the source says.