Steel Industry Should Get Credit For Greenhouse Gas Emission Strategy

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Ferrous Metals

Those sourcing steel may not pay great heed to the European Commission’s 2009 announcement of greenhouse gas emission reductions by 80-95% of 1990 levels by 2050. But anybody sourcing steel out of Europe might want to play close attention.

The emissions targets and, more importantly, how the industry will get there, will play a key role in any sourcing manager’s global steel strategy.

Consider a recent report written by Boston Consulting Group (BCG) analyzing the steel industry’s means of reaching the emissions reductions targets.

The report takes both a historical perspective of emissions reductions strategies taken by industry to date, and then creates a baseline and establishes various scenarios (means) that the industry could take to achieve the reduction targets by the 2050 time-frame.

Of particular interest to this observer? The frank and honest way the report applies a “lens of economic viability” to each of the emissions reductions options available and dismisses any that won’t likely become economically viable, such as carbon capture use and storage (CCUS).

In addition, the report states its objective as “not to make hard and fast predictions about how the future will look from now on, but to outline possible scenarios based on today’s knowledge and to identify those that are the most likely ones from a technical as well as an economic perspective.”

MetalMiner believes the authors accomplished their objective.

How to Reach Targets

The primary means of reaching the emissions targets come from a few key areas that include:

1. The partial shift from BF-BOF to Scrap-EAF production methods, bringing EAF production methods to 41 percent of European production (by way of comparison, the US maintains a 60-65% EAF production ratio) and a future shift to 44 percent of EAF production.

2. “A continuation of the status quo, with specific CO2 intensity and route splits remaining at 2010 levels—that is, 305 Mt CO2, or an increase of absolute emissions by 2 percent over 1990 levels.”

3. The sharing of existing technologies and incremental technological developments; best practice sharing, etc.

The report also makes reference to the benefits of steel use to reduce greenhouse gas emissions for other industries. For example, the report references eight case studies in which the use of steel reduces the other industries’ emissions and creates net savings of 350 MT C02 per year by 2030. In other words, the savings using steel in the other industries exceeds the total emissions of the steel sector!

But perhaps the biggest takeaway from the report involves this – and the steel industry never gets any credit for trying to reduce emissions on its own – perhaps slow and steady does win the race?

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