The market is ready for „green steel“
by Dagmar Dieterle
Interview with Wilfred Geerlings, Manager Commercial Sustainable Development, Tata Steel
marketSTEEL: Do you think the market is ready for „green steel“? Are there any specific buyers already?
Yes, from extensive market research we see that our customers have scope 3 reduction targets within the next 5 years already. This is also in line with the Paris agreement. The average scope 3 reduction target of our customers is around 30% by 2030. This means we need to act now. And yes, we already have buyers for Zeremis Carbon Lite.
marketSTEEL: As of when can CO2-reduced steel (also in large quantities) be supplied?
Zeremis – short for ‘zero emissions’ – is our promise to the planet to become carbon neutral by 2045. The Zeremis brand represents the journey Tata Steel Nederland is taking together with our customers towards a circular world with zero carbon emissions. It’s our ambition to make hydrogen based steel using DRI technology before 2030. This will reduce our CO2 emissions by 35-40%. From that moment large volumes of CO2 reduced steel will be available. With this first step in our transition, we will make a giant leap towards CO2 neutral steelmaking in a clean environment at IJmuiden. This introduction will happen before 2030, resulting in one of the largest CO2 reductions in steelmaking in Europe in this decade.
marketSTEEL: Can you tell us something about the increased production costs?
For our short-term solution Carbon Lite it’s our ambition to save at least 500kt of CO2 prior to our transition to DRI steelmaking. As we are already one of the most CO2 efficient steel producers, additional measures to save CO2 will come at increased costs. In the true spirit of partnership, it’s our commitment that the value created with our Zeremis Carbon Lite sales will be used to fund our Zeremis journey, so we can move faster together towards our goal.
Moreover, our customers understand that CO2 reduced steel comes with higher costs as steel manufacturers have to invest in new production methods. Also, the costs of the energy transition from coal based to hydrogen based will increase the production costs. At Tata Steel we are already investing in the transition. We have 100+ people working every day on making the transition to hydrogen steel making possible.
It's also important to point out that the alternative, i.e. “grey steel”, will become more expensive for our customers as ETS (Emissions trading system) costs will increase substantially in the coming years. But as explained, we invest in our Zeremis promise to become carbon neutral by 2045 and already make a huge step prior to 2030.
marketSTEEL: Is the green steel certified? (Who certifies green steel?)
Yes, it is certified by DNV, an international independent accredited registrar widely used in the steel industry.
marketSTEEL: What are your next steps and short-term goals?
I mentioned this before, but it is our ambition to save at least 500kt of CO2 prior to our transition to DRI steelmaking. We aim to increase green projects in order to obtain growth in certified green steel volume and also to allow for direct internal financing of new green projects within the company. Thus, we create a flywheel for an increasingly green operation. Further Tata Steel Netherlands prepares for transition to carbon neutral steel production by 2045.
marketSTEEL: If you were to formulate a vision on the subject of CO2 neutrality – what would it look like?
Zeremis Carbon Lite is a promise and a commitment to act now, because the world cannot wait any longer. It represents our journey together with our customers towards a circular world with zero carbon emissions.
To achieve our zero-carbon emissions target, we have to fundamentally transform the liquid iron and steel production processes. This transformational journey represents an enormous challenge in terms of technology, logistics, infrastructure, and policy, and will be a longer-term endeavour. But we recognise that we face an impending climate crisis and that acting on climate change cannot be postponed anymore. So, at the same time as investing in transforming our steelmaking processes, we are introducing a range of innovative green steel solutions that deliver a positive impact immediately.
Thank you very much for the interview.
Fotos: Tata Steel and fotolia