Friday, January 31, 2020

Climate Change: Greening the steel industry

Whenever we talk about ending fossil fuels, the coal industry starts whining about how they're essential. We need coal for steel, supposedly, and we need steel for everything, so we have to keep them in business. Except it turns out that we don't anymore:
Momentum is growing towards the decarbonisation of one of the world’s most energy intensive industries, with another major European industrial manufacturer turning to renewable hydrogen to replace coal in the production of steel – nearly 10 years earlier than it thought possible.

Svenskt Stål AB (Swedish Steel or SSAB), which is headquartered in Sweden and partly owned by the government of Finland, announced that it would make substantial investments to accelerate the transition of its steel furnaces to using emissions-free, renewable hydrogen.

“We are tightening up our original goal from the original 2035. We have promised our customers that we will have fossil-carbon-free steel for the European and North-American markets in 2026. We are rebuilding our factories and finalizing everything by 2040,” SSAB’s director of environment Harri Leppänen said.


Which is another nail in the coffin of coal. But it should also force us to rethink our current system of free allocation for industrial polluters. At present, steelmaking in New Zealand is subsidised with free carbon credits, ostensibly on the justification that production will move overseas to dirtier plants if we don't. BlueScope Steel - a hugely profitable foreign multinational - is our biggest recipient of these pollution subsidies. Except with this news, it turns the scheme on its head. Because now instead of subsidising them to avoid their being outcompeted by dirtier alternatives, we are subsidising them to outcompete cleaner ones. And that's something we should not accept.