“Green” steel start-up Stegra and electrolyser manufacturer Sunfire believe the EU’s Industrial Accelerator Act needs to go back to the drawing board to boost steel decarbonisation, Kallanish reports.
Debating the act during a webinar hosted this week by trade body Hydrogen Europe, Stegra public affairs director Ola Hansén said the definition of low carbon needs to be reviewed as it is currently not fit for purpose.
“I am sad to say, when it comes to flat steel, hot-rolled coil production [classification and labelling], it was a complete catastrophe,” Hansén claimed. “With the thresholds proposed, all current European flats production will be considered low carbon. All current flat steel production in China would also be eligible for the classification of low carbon … and the US too, meaning that it is not helping the transition.”
“If 100% of current production already meets low-carbon [definition], why put a 25% quota in the public procurement? I mean, there is no sense if our production already meets that,” he said, calling for more ambitious targets.
His counterpart at Sunfire, Christopher Frey, added that industry needs a “transparent and meaningful” labelling scheme for net-zero steel to create demand for green hydrogen and electrolysers, as proposed under the lead market concept. “What we have heard between the lines is a bit concerning. I would agree that we have to go back to the drawing board and make this more meaningful,” he said.
Frey also highlighted the “special relationship” between the steel and electrolyser industries. “We are customers of the steel companies, but obviously we also want the steel industry to drive the demand for green hydrogen and for our products … We source quite a lot of steel for our electrolysers and exclusively from Europe,” he noted.
Sunfire and peers estimate the steel industry could potentially provide around 9 gigawatts of electrolysis demand if the right framework is in place. Yet, Frey acknowledges the steel industry is facing strong competition, which is challenging decarbonisation efforts.
Stegra sees the proposed low-carbon steel credits “as the most promising lead market … more than any Industrial Accelerator Act.” Hansén explained that having quotas for low-carbon steel usage in the automotive sector, for example, will provide investor certainty and help unlock progress in different industries. “In the end, the additional cost of a couple of hundred euros, if you use only low-carbon steel, compared to the price of a car, is very limited,” he said, referring to a shared development approach.
