EU pushes for green steel, a scarce metal, to fix auto emissions
Buy expensive steel that is made using a "nascent" technology powered by green hydrogen, which barely exists? Under European Union plans, which aim to bolster the steel industry of the EU while still meeting?its environmental targets, this is what Europe's automakers face. They are already under pressure from a fiercer competition in China. The EU changed its CO2 emission targets for new cars in December to 90% by 2035, from 100%. This was a shift from the earlier 100% target.
EU WANT TO BOOST EUROPEAN STAINLESS SECTOR The new proposal is tied to the EU Industrial Accelerator Act, due to be introduced on March 4. Automakers, who account for a five percent of Europe's demand for steel, must compensate the remaining 10% through low-carbon alloys and alternative fuels. What's the catch? The catch? According to the pure-play green metal hopeful,?Stegra, this steel will cost a third more when it is available. Steelmakers such as ArcelorMittal, Salzgitter and others are turning to scrap for production. Thyssenkrupp is renegotiating its subsidy agreements with Brussels. The Leadership Group for Industry Transition, an initiative that brings together governments and global companies, reported planned green steel capacity of around 28 million tonnes by 2050. However, calculations show only a third is currently under construction. 18 million tons of the planned capacity will be located in Europe. Last month, ArcelorMittal's CFO GenuinoChristino said that "we don't have hydrogen readily available. At least not at the scale required."
The German auto lobby has criticised EU's plan.
Hildegard Müller, VDA President in December, said: "This means our industry will once again be dependent on developments that it cannot influence."
Nearly a dozen experts and executives from the steel and automotive industries said they expect Brussels to introduce policies that will create a market for low emission steel and encourage demand. The initial proposal is expected to be a 'limited detail' with some key elements being delayed.
Chris Heron is the secretary general of E-Mobility Europe. He said that there was confusion amongst many people about the Commission's proposals. They were trying to figure out what would be realistic and how the market might actually look. DEFINITION "WILD WEST" Another challenge is the lack of a consensus on what constitutes green steel, or low carbon steel. One steel executive referred to the current market as "wild west". ? The study found that companies used a variety of?terms, metrics, and thresholds when marketing their low-emission products.
The switch from coal-based blast-furnaces to hydrogen-based direct-reduced iron (DRI), and electric-arc furnaces, requires billions of euro in investments. Instead, many steelmakers are pivoting to a more conservative, step-bystep strategy that focuses on electric arcs furnaces. These can run initially on scrap, before switching 'to hydrogen-based DRI. EAFs that are fed by scrap emit less carbon dioxide than blast furnaces. However, many players in the industry say that they can't be a long-term solution due to the limited availability of high-quality waste.
Automobile manufacturers are also adapting.
Volvo Car has agreed to use scrap-based fossil free steel and then switch to hydrogen-based'supply' once production is established.
Christian Levin said, "We think there will be demand," Traton Scania CEO Christian Levin. "But we have not offered it commercially yet, and we do not buy it yet because it's not available."
(source: Reuters)
