Australian Steel News
INDUSTRY INSIDER - AUGUST
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…..environmental and sustainability experts around the globe. But it is only fairly recently that the steel world has started to catch on. Just 20 years ago, when the Green Building Council of Australia came up with the Green Star Building rating system, it introduced incentives for the steel sector. The Council began by asking how much energy was being used in the manufacture of the steel: and then tried to incentivise less use of energy in that process. Whilst recycled steel was of course encouraged, no-one at the time asked how the energy the steel companies were using had been generated. No-one questioned whether it had come from a coal-powered plant or from recyclable sources. Simply, if you threw some polymers into your steel production to reduce the total energy requirement, you would be treated more favourably than those who did not.
Those days are over. People all around the world are now much more interested in the carbon footprint of different industrial enterprises. And this has spawned what are now called “environmental product declarations” (EPD) – notwithstanding that they still lack some uniformity and don´t allow for exact comparisons within industries. Nevertheless, their existence is helping to create informed and detailed business decisions, such as how much carbon is used in the creation of a tonne of finished steel. Likewise, the buyers of new buildings are now looking for a finished product with the smallest carbon footprint in its construction. Amazon, one of the world’s largest companies, is pushing for low carbon options in all its factories and offices, not only in the sourcing of raw materials but also in the future running costs and energy requirements. Amazon aims to hit net zero by 2040 and recognises that taking the cheapest option may not always be the best overall decision. The company understands that being environmentally responsible comes at a cost, but that that cost can also deliver a very significant benefit.
So, who are the winners and losers among steel manufacturers? Those using recycled steel from energy created by renewable sources are likely to have a lower carbon footprint than those producing steel from iron ore or iron sands and using energy created from burning coal or gas. Certainly, the Europeans are further down this road to reducing carbon in the steel intensive construction phase than we are in Australia. Mind you, it´s no surprise the Europeans are pushing green energy: given that they don’t have a backyard full of fossil fuels – as we do in Australia - which they can simply dig up and sell to the rest of the world. In our case, with billions of tonnes of high-grade iron ore and abundant reserves of coal, it´s hard to resist being the supplier of cheap and easy energy. Nevertheless, from what I hear, our English friends are leading the charge to find the lowest carbon footprint steel. Indeed, it is already a factor very much influencing their buying decisions.
I think the best indicator of how important all this has become is the fact that the two domestic long product producers in Australasia (InfraBuild and Pacific Steel NZ) have both announced they will be adding electric arc furnaces (EAF) to their operations to convert scrap into long products rather than using their blast furnaces to convert from iron ore or iron sands. Also, less than 10 years after it closed its old EAF in Auckland, NZ Steel has now announced it will build a new EAF. https://www.nzsteel.co.nz/new-zealand-steel/electric-arc-furnace/ Likewise, InfraBuild now recognises its steelmaking future must also go the way of EAF. The company has announced the phasing out of its coal-based steelmaking. https://www.gfgalliance.com/media-release/liberty-steel-in-whyalla-announces-the-phase-out-of-coal-based-steelmaking-with-purchase-of-a-low-carbon-emissions-electric-arc-furnace/ While some may be sceptical about the completion date on these initiatives, the point is that the future direction has been well and truly identified.
At present it seems the Green Building Council of Australia is providing incentives (Green Star points) for those who satisfy the formalities of their stated requirements for EPDs. But none of these appear to relate to the actual use of lower carbon footprint steel. This is helpful for those steelmakers with high carbon footprints, but provides no reward incentive for the low carbon footprint manufacturers: nor any disincentives for the high carbon footprint manufacturers. Of course, this could change rapidly and probably not later than when any of the new and more efficient EAF machinery with a lower carbon footprint is brought online by some of the local manufacturers. In the meantime, there are already options for anyone looking for structural steel or reinforcing steel made from lower carbon footprint sources. I list a few below. Each tonnage figure is an approximation of their A1 to A3 production life cycle being the amount of carbon required to produce one tonne of steel. Please do your own research on these, of course.
Australia and New Zealand Producers
InfraBuild Whyalla Structural Sections grade 300 at 3.72 tonnes of carbon per metric tonne of finished steel (C/mt/FS)
InfraBuild Reinforcing Bar grade 500N at 1.67 tonnes (C/mt/FS)
NZ Steel/Pacific Steel Reinforcing Bar grade 500E at 3.97 tonnes (C/mt/FS)
Import Sources
Celsa Poland Reinforcing Bar - Standard Quality 500N at 0.806 tonnes (C/mt/FS)
Celsa Poland Reinforcing Bar - Green Quality 500N (produced with 100 % renewable energy) at 0.356 tonnes (C/mt/FS)
Tung Ho Kaohsiung Works Structural Sections grade 300 at 0.619 tonnes (C/mt/FS)
Tung Ho Mioli Works Structural Sections grade 300 at 0.934 tonnes (C/mt/FS)
* The Industry Insider column is an opinion piece where the views expressed belong solely and entirely to the indicated author: in this case, David Roberts, Trading Director at Sanwa. Australian Steel News accepts no responsibility whatsover for the veracity of the author´s opinions nor the accuracy of any information given by him.
If you would like to contact David, you can do so via his email: droberts@sanwa.com.au
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