Australia’s largest metallurgical company BlueScope Steel will begin scheduled modernization (lining replacement) of blast furnace No. 6 with a capacity of 2.1 million tons of steel per year at the Port Kembla steel mill (New South Wales). The company does not believe that low-carbon steel-melting technologies are advanced enough to become a viable alternative.
It is planned that the upgraded blast furnace No. 6 will replace blast furnace No. 5, the life cycle of which will end in 2026-30. The cost of the project will be $ 550-630 million.
According to Mark Vassella, CEO of BlueScope Steel, the investment in blast-furnace production represents a 20-year commitment to produce steel in the conventional way (using iron ore and coking coal), although the company has previously considered certain alternative options for their economic expediency.
“Promising technologies for “greening” the steel production have become interesting, but they are at their early stage of development, which will continue in 2020-30, until they are introduced on an industrial scale in the 2040s,” he said.
BlueScope came to a conclusion that utilization of hydrogen from renewable sources at this stage would cost 6 times more than the natural gas, and replacing a blast furnace with an electric arc furnace would be ineffective due to high costs for electricity and a shortage of scrap metal in Australia.
High electricity prices are becoming a significant problem
We would like to remind that in early February, Australian Prime Minister Scott Morrison said that by 2050 the country would achieve carbon neutrality, and the speed of the “green” transition will depend on science and technology enabling the reduction of the costs for obtaining “clean” energy from hydrogen. In turn, experts warned public officials that decarbonization of Australia’s industry would be impossible without appropriate financial incentives for investors.
One of the Financial Times articles states that high electricity prices are becoming a significant problem on the road to “greening” the iron and steel industry, which opinion is confirmed by representatives of the American startup Boston Metal, founded under the auspices of the Massachusetts Institute of Technology and supported by Bill Gates.
Metallurgists in the UK call electric arc furnaces, which melt scrap metal, a “green” alternative to blast furnaces. However, electricity prices on the British Isles are much higher than in Germany and France. Therefore, investors are waiting for financial incentives from the British Government.
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.