Customers drive emissions reduction, technology shift: British Steel
Customers are driving the emissions reduction efforts and technology shift by steelmakers, according to Chris Vaughan, technical director at British Steel.
“It’s important to reflect the reasons why we are shifting is a primary drive to drive down CO2 emissions, and the way that we are governed on that. It’s policy that’s driving it, it’s public perception, but the pace of change that’s really driving the removal of emissions and taking those to another level is the customer base,” he said at last week’s UK Metals Expo attended by Kallanish.
“Customers are driving the manufacturers to decarbonise as quickly, if not more quickly than the policy timescales with 2035 and net zero by 2050,” he added.
British Steel has a £1.25-billion ($1.65 billion) decarbonisation plan to shift away from blast furnaces to electric arc furnace, with planning permission for this secured in Scunthorpe and Teeside earlier this year.
Vaughan noted some of the challenges the firm is facing came from the customer base potentially switching to materials other than steel which lower emissions.
“They would consider other materials for construction, etc, if we are unable to decarbonise quickly enough to meet the aspirations of their timelines,” he said.
“The transition for us is about reduction in emissions. From a British Steel perspective and an integrated manufacturer currently, the vast majority of our emissions sit within scope 1, so when we talk to clients and customers and they’re looking at us to decarbonise their own downstream, it sits in their scope 3, but their scope 3 is our scope 1,” he added.
The move to EAF-based steelmaking makes sense for the UK, but other global locations may better suit other technologies. “There’s a set of circumstances that fit electrification for the UK and the drive towards EAF, but EAF is not the only technology and it will not be the only technology on a global scale for decarbonisation,” Vaughan observed.
“Globally, it’s got to be considered from geography, where you are in your economic cycle, what is the raw material access … where’s the infrastructure as well to allow that decarbonisation,” he continued.
Amid the UK-wide move away from blast furnaces, much of the conversation has focused on whether EAF technology will be sufficient for grades that have traditionally been produced via primary steelmaking.
“It’s been around a long time. We have domestic producers using EAF technology and have done for decades. It’s proven technology which we can capitalise on to help that shift,” he added. “All grades can be made from that [EAF] route; it’s what you feed the furnace, and the raw material input that drives that, in around working with the supply chain to achieve it as well.”
He also noted that EAF steelmaking would allow more flexibility. “Our current method within British steel on integrated production requires stability, it’s not easy to take capacity up and down … whereas the EAF allows you to respond more dynamically and flexibility to market requirements which gives the benefit to be able to tune your operation to what you’re facing from the market perspective,” Vaughan concluded.
Carrie Bone UK
European Commission launches decarbonisation technology viability assessment centre
The European Commission has launched the Innovation Centre for Industrial Transformation and Emissions (INCITE), which will assess whether breakthrough decarbonisation technologies are cost-effective, energy and resource efficient, and ready for use at industrial scale.
Seville-based INCITE will be a key tool in the implementation of the revised Industrial Emissions Directive, the Commission says. It will cover all sectors under the Industrial Emissions Directive, with an initial focus on energy-intensive industries such as steel, cement and chemicals, Kallanish notes.
INCITE’s technical assessments and findings will be accessible to industry, finance institutions, technology providers, permitting authorities and research and technology organisations.
The technical information it provides will help investment decisions in innovative technologies needed to advance Europe’s transition towards a cleaner, climate-neutral, more circular and competitive economy by 2050.
Virginijus Sinkevičius, Commissioner for Environment, Oceans and Fisheries, notes: “INCITE is a pioneering initiative that will accelerate the uptake of cutting-edge technologies and drive a greener, more competitive industry in the EU. As a major tool to deliver our European Green Deal and the new Industrial Emissions Directive, INCITE will unlock the full potential of innovation, reduce investment risks, and promote sustainable growth.”
Adam Smith Poland
Steel industry needs universally agreed-to carbon price: James Moss
Decarbonisation in Europe’s steel industry is complicated by cyclical headwinds, rising climate change costs and need for a clear carbon price. These were some of the challenges discussed by First River Consulting partner James Moss during Kallanish’s Europe Steel Markets 2024 conference in Milan.
“The discussion about decarbonisation in Europe is being had with the backdrop of either a structural or a deep cyclical change in demand and production,” says Moss.
These shifting supply and demand dynamics, along with the challenges of the green steel transition, will likely distort government decision-making to invest in facilities that should be allowed to die, Moss warns. He adds that the US once had a reputation that no facility ever died, but there have been several casualties over the last 10-20 years and large names in the industry have disappeared.
Another difference is the accounting of carbon costs in final product pricing.
“So just to be completely simplistic about it, there’s been an accounting error for the last 200 years. We [the US] have not counted carbon in our costs,” says Moss.
But US costs associated with climate change are starting to appear. One example is the difficulty in obtaining affordable home insurance in California and Florida because many insurers have stopped insuring homes in those states. This makes the insurer of last resort the state itself – whether it’s against wildfires or earthquakes in California, or hurricanes in Florida.
Since 2017, homeowner insurance exposure in those two states increased from $160 billion to $340 billion in seven years.
By including the cost of carbon in our cost of goods sold, costs will rise and drive price higher.
“So if hot metal goes up because iron coming out of a blast furnace has a carbon tax added to it, scrap will reflect that cost they track. And if scrap reflects that cost, DRI will reflect that cost. So all iron units are going up and prices will go up with them,” Moss adds.
For now, the market does not have a clear price for carbon. Moss says the market needs a clear internationally understood price for carbon if it is going to be calculated among costs. And understanding the true cost of steel production is crucial to avoid government interference.
John Isaacson USA
Kallanish Green Steel report with 94 decarbonisation projects
Kallanish published the 2nd edition of the Kallanish Index Services Green Steel Monitor report.
This second edition contains details for 94 steel decarbonisation and low-carbon steelmaking projects by 38 companies around the world.
This resource will help you understand the status of global steelmaking decarbonisation projects underway and in the pipeline globally, and zero in on the scope and scale of the transformation taking place.
More details:
- 94 Projects
- 42 Maps
- 47 Charts and Tables
- 50 Pages
- PDF format
- Price: 350$ USD
- Order by email or online
Projects covered range from research initiatives, through demonstration and pilot plants to full-scale investments in a range of established and new technologies, including: carbon emission reduction targets for each company.
