European climate policies put the steel industry under pressure to reach ever more ambitious CO2 reduction targets while technologies to do so are not at hand. This is indicated by studies on the CO2 abatement potential of steel making in Europe discussed during the European Steel Day in Brussels on May 16th.
A study conducted by The Boston Consulting Group and the Steel Institute VDEh, looks into possible CO2 mitigation from steel production up to the year 2050. It was commissioned by The European Steel Association EUROFER in response to the current EU climate policy framework and the Commission Communication on a low carbon Europe 2050, which sets a reduction target of 80% to 95% for CO2 emissions.
However, the European steel industry's potential to further reduce CO2 from steelmaking up to 2050 is, due to economic and technical issues, limited to 15% per tonne of steel produced. The theoretical potential is 56%, which still falls short of the Commission's 2050 target and relies on the development of new technologies not yet in existence and on a functioning infrastructure for Carbon Capture and Storage (CCS), the technical and economic viability of which has not yet been proved.
Furthermore, growing resistance against CCS projects in the European Union's Member States makes it questionable whether the technology will be put into practice in the foreseeable future.
These results confirm the findings of the EU's Joint Research Centre published in its Prospective Scenarios on Energy Efficiency and CO2 Emissions in the EU Iron & Steel Industry in December last year. The BCG/VDEh study will feed into the EUROFER Steel Roadmap for a Low Carbon Europe 2050 to be published before the summer. The EUROFER Roadmap will also build on data and conclusions from other research program, with a view to come to a set of policy recommendations to maximize steel’s contribution to a low-carbon economy.
Dr Wolfgang Eder President of EUROFER at the European Steel Day said that "I think we have reached a point where policy makers have to stop ignoring the limitations of certain industries to meet the EU's emission reduction objectives. Breakthrough technologies will be needed, and these need extensive research and development, pilot and demonstration tests. Concepts for climate policies cannot be a technology-free zone, as the Commission's 2050 Roadmap is today. In order to be successful, they must be sector specific and technology based."
Mr Eder, who is chairman of the Management Board and CEO of Austrian steel maker voestalpine AG, said that EU climate and energy policies are among the main causes for the deindustrialization in Europe. He called for a readjustment of policies putting competitiveness of European industry at the centre of political decision making.
Mr Eder acknowledged Commission Vice-President Antonio Tajani's role as driving force behind a new approach on industry in European policy making. The Commissioner for Industry and Entrepreneurship is going to publish an Action Plan for the European steel industry in June. The EUROFER President pointed out the importance of support from the highest level of the Commission for the success of the Action Plan and emphasized the urgency of the problem: "It's time to translate good intentions into action."
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