Chinese corporation Jingye Group, owner of the steelmaking company British Steel, has announced its commitment to invest £ 1.2bn in “greening” blast furnaces at its Scunthorpe steel plant.
At the same time, according to Ron Deelen, Chief Executive Officer of British Steel, this project, envisaged by the investment obligations of the Chinese owner, has been put on hold due to a potential change in the UK legislative framework.
“There have been some changes since the purchase of the plant. The Climate Committee has given clear advice to the Government – this is not a law yet, but perhaps it will be by 2035 – that it does not want to see a single blast furnace at the territory of the United Kingdom,” he said.
At the same time, he called on the lawmakers to clarify as soon as possible how these £ 1.2 billion can be spent. In particular, electric arc furnaces, in which scrap metal is melted, can become a “green” alternative to blast furnaces. However, they consume large amounts of electricity, the prices of which are much higher in the UK than in Germany and France.
Therefore, we need a clear signal and incentives from the authorities to understand which direction we should move to.
Ron Deelen, Chief Executive Officer of British Steel
Bill Gates invests in green steel
The fact that electricity prices are becoming a problem on the path to “greening” the steel industry, representatives of the American startup Boston Metal, established under the auspices of the Massachusetts Institute of Technology and supported by Bill Gates, said in an article in the Financial Times.
If our costs for electricity were at the same level as those of aluminum producers – and this is from $ 15 to $ 35 per MWh – then we would be competitive even without the carbon tax. And it will really change the world.
the head of the project, Tadeu Carneiro
The company recently received investments from iron ore giants BHP and Vale totaling $ 100 million. Boston Metal invented a technology to produce a completely new, emission-free steel using electricity. Its essence is to pass electricity through a 2-meter chamber, inside which, as the company says, there is “a soup of molten oxides”, including iron ore.
“We supply current to the chamber, and pure iron comes out of it, into which other elements can be added to obtain high-quality steel,” he emphasized, adding that such small modules can substitute 35-meter blast furnaces at production facilities.
Let us remind
Let us remind that China has begun to prepare a program for the transition to green metallurgy with financial incentives, and British metallurgists have called on the country’s authorities to develop a package of measures to stimulate iron and steel enterprises to switch to carbon-free production technologies – electrometallurgy and hydrogen.
In the European Union, the investment plan for the “green transition” of the European industry amounts to 1 trillion euros during 2021-2030 in the form of concessional loans and subsidies. Moreover, the European Commission is going to allocate about 300 billion euros from the Coronavirus Relief Fund (the fund to combat the economic consequences of the impact of Coronavirus) specifically on the eco-modernization of industrial enterprises.
Decarbonization in Ukraine
In Ukraine, the only incentive for decarbonization of the steelmaking industry is the green metallurgy rule, according to which enterprises that have cut their CO2 emissions down to the European target level will be able to apply for a small reduction in the electricity tariff.
However, such rule exists in theory only. Six months after the adoption of the relevant law, the incentive did not get rolling due to the inability of the Cabinet of Ministers to develop the necessary legislative instruments.