Germany introduces new green steel certification standard
The LESS certification was introduced on Monday April 22 at an industry event in the Hannover Messe and announced more widely in a WV Stahl press release.
It was said to be the first standard for the steel industry that allows for tracking and comparing emissions from two key steelmaking routes: the conventional blast furnace route in the transition to low-emitting hydrogen-based production processes, and the electric-arc furnace route. The system therefore enables comparisons of the decarbonization efforts of both steelmaking methods.
LESS was developed by WV Stahl and its member companies and is supported by the BMWK.
The core part of the LESS standard is the labelling system, which allows for classification of low-CO2 steel by carbon intensity, using a graduated scale.
According to the LESS standard, low-emission steel can be grouped into five categories – A,B,C,D,E – depending on carbon and scrap content.
Steelmaking companies that would like to get LESS certificates would have to report their scrap content and Product Carbon Footprint (PCF) in the finished steel product, in accordance with an Environmental Product Declaration (EPD).
This EPD would be provided by independent certification bodies TÜV Nord and DNV.
“The definition of green steel has long been the subject of intense debate worldwide,” WV Stahl president Bernhard Osburg said. “I am delighted that, by joining forces, we have succeeded in developing a widely agreed solution based on international standards which we are now putting into practise. This will provide steel clients with all the information they need to achieve their CO2 reduction targets with the help of low-emissions steel.”
He also emphasized that the LESS standard will help steel-using companies to obtain initial funding for transformation projects.
The introduction of LESS was supported by stainless steel producer Swiss Steel Group.
“LESS creates transparency through a uniform labelling system and a step-by-step classification of low-CO2 steel, and enables steel users to achieve their climate targets with the help of sustainably produced steel,” Swiss Steel Group said on April 24.
The LESS standard was created for international cooperation, so industry sources hoped that it would help to achieve a more unified approach to pricing low-carbon steel and that this would help to promote its uptake across supply chains.
Industry sources estimated that the volume of green steel traded in Europe in 2023 was no higher than 50,000 tonnes, with very few suppliers able to offer “physically produced green steel, with emissions proven by Environmental Product Declarations [EDPs],” according to one distributor.
Fastmarkets’ most recent weekly assessment of the green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe, was €150-250 ($160-267) per tonne on April 18, unchanged since mid-December.
German mills discontinue scrap pricing survey
A regular monthly scrap pricing survey compiled from data collected at Germany’s steel mills has been discontinued by steel federation Wirtschaftsvereinigung (WV) Stahl at the end of 2015.
The survey has existed longer than the monthly survey by recyclers’ federation BDSV, which is compiled from input by scrap merchants. Often, the surveys’ results gave diverging information.
“The amount of publicly accessible price information has risen in recent years. Given the selection of such sources we have decided to stop our investigations in this regard,” WV Stahl tells Kallanish by way of explanation.
Market players from the scrap collecting industry had often argued that the prices given by WV covered only parts of the industry and were therefore not representative. “Apparently, two or three mils had stopped participating in those statistics,” one market source tells Kallanish. Others argue that the monthly average figures were overlapping and thus did not reflect the market adequately. They bemoan the fact that the prices were used as a basis for calculation by the automotive industry, or to define scrap surcharges in the past.
When WV Stahl announced that it was discontinuing its service, some mills had temporarily considered setting up a scrap pricing service themselves in recent months but this has not happened. “It is not all that easy. BDSV needed two years before it got its service up and running properly,” one source says. BDSV’s data are double-checked by an external institute which crops statistical outliers to arrive at credible figures, the source adds.
Kallanish
