Key conclusions from the 75th EUROMETAL Anniversary Meeting: energy barriers, decarbonization, CBAM, trade protection
The key talking points of the event dedicated to the 75th anniversary of the European Distributors Association were EUROMETAL, which took place on July 2-3 in Luxembourg and was attended by Fastmarkets.
Protection of the European steel industry, energy supply, decarbonization of the regino steel industry, implementation During the event, the EU Carbon Boundary Regulation Mechanism (CBAM), trade measures and the emerging market for environmentally friendly steel were discussed.
Energy supply is the main stumbling block on the way to decarbonization
Currently, about 55% of steel in Europe is produced using blast furnace-basic oxygen furnace (BF-BOF), while about 45% is produced in electric arc furnace (EAF). As the EU moves towards using cleaner technologies to achieve its goal of zero carbon emissions by 2050, the share of steel produced using the EAF method is expected to increase to about 57%.
From 40 to 50 million tons per year at new "green" steelmaking facilities using electric energy.
According to estimates by the Fastmarkets research group, arc furnaces (EDP) or EDP with direct reduction of iron (DRI) will be put into operation in Europe in 2026-2030.
The energy-intensive nature of steel production leads to high electricity consumption. It is expected that with the transition to EDP, electricity consumption in the sector will only increase
Consequently, access to renewable energy at affordable prices has become a crucial factor in the European steel industry's decarbonization efforts.
The energy required to power the new facilities is 165 MWh, of which 90 MWh will be required for hydrogen production. It is estimated that water electrolysis will require 2.1 million tons of electricity per year, Henrik Adam, executive chairman of Tata Steel Netherlands, said during his presentation at the event.
By 2030, the demand for electricity in Europe will double and reach 165 kWh, compared with 75 kWh in 2010-2020, and by 2050 it will increase fourfold. According to Adam, by 2050, hydrogen production alone will require about 230 kWh.
But European market participants began to suffer from higher structural costs compared to Asian and even American market participants.
Electricity prices in Europe remain significantly higher than in many other regions. Industrial tariffs often exceed 100 euros (118 US dollars) per MWh, while in countries such as the United States and China, costs usually range from 30 to 50 euros per MWh. This significant difference creates a serious competitiveness problem for energy-intensive industries such as steel production.
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