At COP26, world leaders made clear the urgent need to accelerate the global transition to clean energy. With roughly 70% of steel still being made in coal-fired blast furnaces, we are far from reaching our ambition and need to act now to address this.
While some progress has been made in Europe, the industry must go further to collaborate with the supply chain and utilise both existing and new technologies to reduce its impact on the planet. In her State of the Union address in September, European Commission President Ursula von der Leyen set out the Green Deal in Brussels as a major achievement and a cornerstone for the future of the EU. The steel industry is a leader in decarbonisation and is on a mission to reduce its emissions by 55% by 2030.
Steel is a significant part of European industry and Metinvest, one of the world’s largest integrated steel and mining businesses, is part of the European Steel Association (EUROFER) located in Brussels.
We support EUROFER’s vision in sustaining European steel’s contribution to the economy, to society and to environmental preservation. With two of our major plants based in Italy, we are closely integrated into European affairs and believe that sustainability should fall at the root of the EU steel industry’s activities.
At Metinvest, we are working diligently and consistently to reduce our environmental impact. Over the past decade, we have cut our greenhouse gas emissions by 68%. We have also decreased our pollutant emissions by 37%, dust emissions by 51%, direct energy use by 40% and discharges into water bodies by 45%. This year alone, we have invested over $150 million in purely environmental projects to support this. So, how do we continue to advance the transition to green steel at pace?
The key challenge stems from the principal route for extracting iron from its ore, a highly carbon-intensive process. While there are many pioneering technologies on the horizon, we are exploring three key themes as part of our wider decarbonisation strategy: low-carbon electric arc furnaces, renewable energy sources such as hydrogen, and collaboration with partners to develop pioneering technology and upskill our workforce.
Lower emissions with electric-arc furnaces
Alternative production techniques hold significant potential to reduce steel’s carbon footprint. We can turn iron ore into direct reduced iron (DRI), which is then used in electrometallurgy to produce new pure steel. By combining technology with renewable energy sources, we can create carbon-neutral metallurgy. In essence, this will mean abandoning blast furnaces and sinter plants and switching to the electrometallurgical method of steelmaking.
Harnessing renewable energy
We believe that steel producers will need to collaborate with renewable energy providers to ensure that the entire production chain is eco-friendly. The Steel Action Plan, which was implemented in 2020 by Germany and Europe, calls for investments in technologies that are low in greenhouse gas emissions, such as the industrial use of hydrogen. Hydrogen can be used either as an auxiliary reducing agent in a blast furnace or as the sole reducing agent in the DRI process. However, the current cost of hydrogen produced by electrolysis of water is high. When cheap hydrogen is available, it can be used more efficiently in DRI plants to achieve near-zero CO2 emissions. This is something all steel producers should explore.
Driving low-carbon technological innovations
Partnerships and education will help to unlock the technological solution to low-carbon steel. To date, Metinvest has signed memoranda of understanding with K1-MET, a leading Austrian metallurgical competence centre; Primetals Technologies, an international leader in metals engineering; Danieli, a leading global manufacturer of plants and machines for the metals industry; and SMS group, which also includes Paul Wurth, a leading engineering and technology group in the iron and steel industry.
These partnerships will enable us to harness existing technologies while also developing new solutions aimed at accelerating our decarbonisation journey. We are also partnering to help train the next generation of steel industry engineers to meet the rapidly growing need for specialists with a solid understanding of both IT and metallurgy.
To continue driving innovation, increase the IT competencies of our employees and encourage young people to join our industry, we recently founded Metinvest Polytechnic. The first private metals and mining university open to everyone in Ukraine, it is introducing European standards and developing a new form of higher technical education. In October, the university began to jointly develop an international R&D project with Austrian engineering company K1-MET and several other scientific and industrial partners. The initiative aims to improve recycling technologies of leftover dust and slag and examine briquetting methods.
Looking back at COP26, it illustrated how a joint effort between government and business alike is vital to achieving our global climate change targets. Metinvest is one player on a large team, striving to achieve the common goal of carbon-neutral steelmaking. By working together to make the future of green steel a reality, we will not only benefit the planet, we will also create jobs and boost the economy. We are excited by the journey ahead, and hope that industry and investors will join us on this mission.