13 March 2023 – EU steel producers, led by a major German group, have made no really progress in decarbonising their blast furnaces since 2005. And now everything is supposed to get better? A critical look at green symbols. Canada wants to ban Russian steel and aluminium imports. And does Indonesia have a problem with nickel ore mining?
Canada bans Russian steel, aluminium imports
Minister of Foreign Affairs, Mélanie Joly, said on Friday that the Canadian government intends to ban imports of Russian steel and aluminium tariffs. This is to put further pressure on the government in Moscow to end the war in Ukraine.
Indonesia: High grade nickel ore supply tight
According to Asian analysts, the availability of high-grade nickel ore from Indonesia is currently tight. This is likely to lead to an increase in production costs for nickel pig iron producers.
Low grade nickel ores only waste product
Currently, low grade nickel ores are not considered economically degradable in Indonesia and are therefore treated as a waste product. So-called HPAL (high pressure acid leaching) plants are needed for the processing of low grade nickel ores, which do not yet exist in Indonesia. So far, only one HPAL plant is being planned. In addition, the HPAL process is criticised for causing massive environmental damage. The Indonesian focus is on so-called pyrometallurgical smelters, which produce NPI and ferronickel for stainless steel production, for example.
Where does nickel ore for Indonesian smelters come from?
Indonesia also wants to almost double the number of nickel smelters by 2024. Whether the mining of the nickel ores needed for this can succeed has not yet been conclusively clarified, since the expansion of mining capacities would also have to be at least doubled. If the HPAL process is added to this, it could quickly lead to a dispute over the known and economically mineable deposits.
RIPIN: Global demand for 17 million tonnes of nickel from 2025 onwards
With RIPIN forecasting that nickel demand will increase exponentially in the coming years and predicting a global demand of 17 million tonnes of processed nickel per year as early as 2025, it is no wonder that Indonesia is going all-in on nickel production, but whether that will leave an island nation that is liveable for its inhabitants or just a mining and industrial wasteland remains to be seen.
EU steel producers: No decarbonisation progress since 2005?
EUROFER, the association of European steel producers, has included a rather exciting map on its website. Various projects that are supposed to contribute to the decarbonisation of the European steel industry can be clicked on and are supposed to conceal with pretty information that nothing has actually happened in the direction of CO2 reduction for decades.
Parade example thyssenkrupp Steel Europe
If you click on the pretty icon with a green background for the H2KM project (thyssenkrupp Steel Europe) in Duisburg, Germany, you will immediately notice a few things.
Stepwise sustainable transformation from conventional Blast Furnace / Basic Oxygen Furnace steelmaking to hydrogen-based Direct Reduction Plant / Electric Arc Furnace steelmaking, with view of at least 30% CO2 emissions reduction by 2025 (compared to 2014) and ultimately achieving climate neutrality by 2045.
Source: EUROFER
STARTING YEAR: Before 2030
EUROFER: Low-CO2 emissions projects in the EU steel industry
According to the data there, thyssenkrupp wants to reduce CO2 emissions by 30% by 2025 – compared to 2014. Why 2014? thyssenkrupp could also have used its emissions data from 2005. Because according to the German Emissions Trading Authority (DEHSt), which is part of the Federal Environment Agency, nothing has changed at this site since 2005. In 2013, 2015 and 2016, CO2 emissions were even higher than in the average periods from 2005 to 2007 and 2008 to 2012.
EU steel manufacturers unwilling to adapt
Overall, however, a tragedy that relates to the unwillingness of European steel producers to reduce their emissions and meet their responsibilities. Of course, they were happy to take twice the number of emission certificates that thyssenkrupp has in these periods. Based on an allowance price of around 25 euros, this added up to almost 4 billion euros in hidden EU subsidies for thyssenkrupp since 2005.
ETS certificates were too cheap for manufacturers
Nevertheless, it was these ETS certificates that had demonstrably reduced the willingness of manufacturers to adjust their CO2 emissions to zero. Reason? The price of the allowances was too low for them for many years. Only when they rose above a certain threshold would it have been attractive to take real action. The EU had even negotiated with the manufacturers whether it should compensate the gap between the certificate price and the desired certificate price with subsidies – in order to create any willingness at all on the part of the manufacturers.
No green hydrogen, no clean steel
Just slapping a pretty green symbol on an alleged CO2 reduction measure is simply no longer enough. Especially when there is no green hydrogen and instead the climate killer grey hydrogen is to be used. The association knows about the additional energy needed to produce hydrogen or Direct Reduced Iron (DRI), but still praises the DR plants to the skies. Of course, this is only reflected to a limited extent in the carbon footprint of the steel producers. It is also better to keep quiet about the quantities of DR needed, which are said to be around 500 million tonnes, because the industry knows that it will not be possible to build this up. And that there is only one functioning DR plant in Europe with a homeopathic production capacity of 700 kt DRI also.
EC hopes for two demonstration plants by 2030 at the earliest.
And with this dazzle, the European steel buyer is to be asked to pay at the EU’s external border with the Carbon Border Tax CBAM. We can be glad that the European Commission has expressed the hope that it might be possible to get two demonstration plants up and running by 2030. Source? European Steel Technology Platform.
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