EU set to race ahead of UK in green steel production
The Energy and Climate Intelligence Unit (ECIU) has published a report taking a snapshot of progress in sustainable steel production, finding that while there are many sustainable steel production projects planned or under way in the EU, there are no concrete plans for similar projects in the UK.
There is a global race to achieve low-carbon steel production in order to support infrastructure expansion aligned with international decarbonisation under the Paris Agreement. According to the ECIU, a UK-based advisory organisation, this low-carbon transition is particularly acute in Europe, where many national steel industries have shrunk under pressure from Asian imports and abundance of supply.
Current methods of primary steel production in the UK are very carbon-intensive; steel is the largest industrial source of emissions in the UK and its two integrated steelworks (TATA in Port Talbot and British Steel in Scunthorpe) make up more than a sixth of total industrial emissions. According to the independent Climate Change Commission, steel will need to be decarbonised within just fifteen years in order for the UK to meet its net-zero emissions target.
More than 80 per cent of steel produced in the UK comes from blast furnaces and just 17 per cent is made from scrap steel via electric arc furnaces. Blast furnace steel production, which was developed in the 1950s, has reached its limits of efficiency and is unable to significantly cut energy intensity further. While secondary steel – recycled using four electric arc furnaces – could be close to zero-carbon when powered with renewables, steel produced this way cannot be used for some important applications.
In order to rely on imported steel, therefore, the UK government must preserve and decarbonise its primary steelmaking facilities, either by installing carbon capture technology or switching fuels and feedstocks to low-carbon alternatives such as hydrogen. Given that carbon capture technology remains in development, hydrogen-based steel production is generally accepted to be the main means of decarbonising steel.
There are 23 hydrogen-based steel production projects either planned or already under way across the EU27 – from Sweden to Romania – the report found. For instance, Germany’s Thyssenkrupp is aiming to produce 50,000 tonnes of 'climate neutral' steel annually by 2022 (encouraged by Germany’s ambitious €9bn hydrogen strategy) while Luxembourg’s ArcelorMittal is aiming for 600,000 tonnes by the same date.
In the UK, however, there are no confirmed plans for using hydrogen in steel production or to mitigate the environmental impact of the steel industry via carbon capture (with only vague proposals regarding the latter). The ECIU warns that falling behind continental competitors is a major threat to employment in the UK’s industrial heartlands, with the steel industry directly employing nearly 35,000 workers and forming a foundation for local employment markets in South Wales and the North East of England.
According to the report, there are a number of reasons for the UK’s delay in embracing sustainable steel production, most notably differences in policy environments and support for steel decarbonisation and clean hydrogen production. The UK committed £250m to a 'Clean Steel Fund' in 2019, but under current plans this funding will not be available until 2023; the UK’s Hydrogen Strategy is also facing delays.
The UK government has emphasised renewal of national infrastructure as a key aim within its 'levelling up' agenda to develop economic opportunity outside the South East of England; this will require millions of tonnes of steel and other materials.
“The issue of decarbonising steel is particularly pressing in the UK, with a domestic steel sector struggling to attract investment and uncertain of its long-term survival,” the ECIU wrote in its report. “This danger is further manifested in a lack of plans for clean steel projects which are surging in number in Europe instead.
“Growing momentum for corporate and national-level net-zero targets brings an opportunity to reboot a struggling sector, providing low-carbon steel for manufacturing and infrastructure, thereby locking in long-term, high-skilled and secure industrial jobs for decades.
“The UK government has stressed the strategic importance of a domestic steel industry and therefore the findings in this report are particularly stark. By the time the UK develops a clean steel industry, on current plans, the European steel sector is likely to be even further ahead.”
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