Industry: Companies buy the first steel with a better CO₂ – economy balance

No, Franz Kaldewei does not usually travel to Duisburg to buy steel himself. His family business makes very expensive bathtubs and sinks – not ceramic or plastic, but enameled steel, a mixture of metal and glass. But now Kaldewei, gray suit, black helmet, is standing in a huge Thyssenkrupp warehouse.

The bathroom supplier has not only ordered 300 tonnes of steel, it is also bringing a certificate back to Münsterland: this steel, it is certified, has a 70% lower CO₂ footprint than conventional products. “Sustainable construction is a huge problem, especially in architecture,” says Kaldewei. Hopefully you won’t be able to avoid your tubs any longer.

70% less CO₂, that seems revolutionary for a city like Duisburg. Steel has been baked there for 130 years – according to an unchanged recipe: the ore is reduced to pig iron with coal and turned into steel. But the climate record is bad. The Thyssen plant in Duisburg alone is responsible for 2% of all greenhouse gas emissions in Germany.

There is a recipe for the future: with green electricity and hydrogen. But until the necessary systems are in place, the industry tries to get the most ecological benefits from blast furnaces. She is now starting to sell steel that protects the climate at least a little. But if you look behind the labels, you find yourself in difficult calculations. Or – in another case – with French nuclear power.

Car, fridge and washing machine makers want to buy green steel

Above all, Thyssenkrupp tries to use less coal. For this, the largest German steelmaker uses the first quantities of spongy iron. It is already reduced iron, currently it is still produced in Russia with natural gas. Thyssenkrupp also uses more scrap in the blast furnace. In both cases, less coal is needed and less CO₂ escapes.

The group can offset these savings against a small part of the production. Companies like TÜV Süd verify the calculation. Thyssenkrupp plans to sell 50,000 tonnes of low carbon steel in the coming year. Of course, this is only about 0.5 percent of annual production. “By 2024, the quantity is expected to increase to 500,000 tonnes,” explains division manager Bernhard Osburg. Steel is not completely green; Preliminary products like the sponge iron also want to be made and transported.

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From the Rhine port to the blast furnaces via conveying systems: the Thyssenkrupp steelworks in Duisburg alone is larger than the Principality of Monaco.

(Photo: Ina Fassbender / AFP)

What to do with such computer tricks? “In terms of the bottom line, green steel may be a wise interim solution,” says Nicole Voigt, steel expert at the Boston Consulting Group (BCG). Because truly “green” hydrogen-powered steel will not be available in considerable quantities before 2025. “Manufacturers can already test the market,” explains the management consultant. “And there is already a demand.” Manufacturers of cars, refrigerators and washing machines in particular want to use more green materials. “This puts steelmakers under pressure,” Voigt explains.

It’s not easy to see what’s inside when it’s written in green steel

What is certain is that Thyssenkrupp is not alone with the interim solution. Germany’s second largest steel manufacturer, Salzgitter, has been supplying “green” steel to Mercedes-Benz and the household appliance company BSH since this summer. The goods come from an electric arc furnace, which is mainly fed with scrap metal and a lot of electricity. The corresponding steel has a CO₂ footprint 66% lower than the blast furnace route.

Saarstahl recently started rolling low CO₂ steel – initially as construction wire. Here, the goods come from the electric arc furnace of a subsidiary in France; about 75 percent of the electricity there comes from nuclear power plants.

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Gathering of IG Metall in front of a factory of the Salzgitter group: the industry hopes for state support for “green” steel.

(Photo: Moritz Frankenberg / dpa)

BCG expert Voigt fears a certain proliferation of new low-carbon steel brands. “For clients, it’s not easy to see what’s exactly inside when it’s written in green steel,” says the management consultant. In their view, uniform criteria are needed, which, for example, industry associations could define.

And not all grades of steel can be produced with scrap metal in the electric arc furnace. Steelmakers therefore need a long-term replacement of their blast furnaces. Thyssenkrupp and Salzgitter each want to build a first so-called direct reduction plant by 2025. It produces spongy iron, which must then be transformed into steel. Instead of coal, such a system can run on natural gas or hydrogen. It becomes virtually CO₂-free if hydrogen is obtained from water with a lot of green electricity.

Green steel tub is said to cost around 10-20% more

But the new systems will cost a few billion. Manufacturers have applied for state subsidies because climate protection is a task for society as a whole; they refer, for example, to the promotion of electric cars and their charging stations. In addition to systems, they also need transmission lines for hydrogen – and a lot of green electricity to produce it.

The steel industry in Europe has lost its importance in recent years. All over the world, production is increasingly shifting to countries like China or India – with relatively low wages and demands. In this regard, some see climate protection as an opportunity: “The green steel market is still far from being divided,” says BCG Voigt consultant. “The train has not yet left for the German manufacturers.”

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With certificate in the frame: Steel boss at Thyssenkrupp Bernhard Osburg (right) hands over the first tonnes of CO₂ to family entrepreneur Franz Kaldewei.

(Photo: Roland Weihrauch / dpa)

And is the first low-CO₂ steel now more expensive than ordinary? Yes, says the director of Thyssenkrupp Osburg. For example, the purchase and transportation of the sponge iron is a factor. Nevertheless, his group is already “in talks with a number of other clients”.

Buyer Kaldewei estimates that its products with low CO₂ steel are ten to 20 percent more expensive than the conventional series. But that could only be a first indication, believes the entrepreneur. Initially, it is planning a “limited edition”: the first order will probably only be enough for around 10,000 baths and basins.

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