Green steel needs policy support, market demand questionable

The need for commitment from policymakers to achieve a successful energy transition was reiterated at last week’s Kallanish European Steel Markets conference in Amsterdam.

In one negative example, Steven Vercammen of McKinsey & Company cited how carbon capture and storage (CCS) came “on the table in the Netherlands, and then again off the table. After all, it means you put something in the ground for ages, as is the case with nuclear waste”.

It Italy, the government’s commitment to the industry even led to its participation in the former Ilva works, now Accaierie d’Italia, a mill which yearns for massive investment in environmental measures. In this case, “the question is how long will the Italian public accept that the mill is half state-owned; probably not too long,” said Kallanish southern European editor Emanuele Norsa during the conference’s closing discussion.

The discussion also touched on the potential demand for green steel products. Selçuk Yilmaz of Yildiz Demir Celik noted that his company will in October start reporting its CO2 emissions, “as especially customers from the automotive industry are asking for it”.

While this sounds in line with statements from other steel companies elsewhere, a more sceptical perspective was provided by Friso de Vries from distributor Vogel Stahl on the German/Dutch border. “I would like to say the same, but the harsh reality is that the majority [of customers] does not ask for it [low-emission steel].”

The automotive industry is indeed showing interest, given that a premium of €300 ($323) for one tonne of steel used in a car makes only a tiny difference to the car’s final price, he said. “But we do not see the demand from other industries,” he concluded.

Christian Koehl Germany