Steel: the material for a sustainable future

Transcription

1 Steel: the material for a sustainable future Europe Media Day Paris, 11th December 2018 David Clarke, Vice President, Head of Strategy and Chief Technology Officer

2 What is common about all of these plausible futures? 1

3 Steel: the material for a sustainable future Why is the sustainable future made of steel? What is the nature of the carbon challenge for steel? What are the possible solutions to this challenge? How is ArcelorMittal addressing the challenge? 2

4 Global megatrends are driving the world towards a sustainable economic model Global megatrends driving towards sustainable economic model Demographic shifts Accelerating urbanisation Global geo-political and economic shifts Climate change, environmental stress, and pollution Shifts in social awareness and lifestyle demands Policies reinforcing sustainable development sustainable economy Low carbon economy Digitalisation & hyper-connectivity Technological breakthroughs Businesses to improve resource use efficiencies, reuse and recycling Environment Circular economy supported by the digital economy Source: ArcelorMittal Corporate Strategy 3

5 Preferred material, nature friendly and supportive of a circular economy: steel is at the heart of the sustainable future Preferred material, universally used in very diverse sectors Key material for our future sustainable economy sustainable steel Nature friendly, rusts back Circular, easy to recover and 100% recyclable Source: ArcelorMittal Corporate Strategy 4

6 With unmatched recyclability and ease to segregate, steel remains by far the most recycled material globally End of life Steel Aluminium Plastics Fiberglass Cement Materialto-material recycling Recycled volumes 230mt 18mt 36mt - - Recyclability material to material Ease to segregate Recovery value high lower risk of downcycling Magnetic; easy to separate from waste streams $ /t med Alloying risk of downcycling Closed loop to sustainably recycle $ /t low risk of downcycling Closed loop needed to effectively to recycle $30-500/t X Only used as energy - - X Only downcycling - - Source: ArcelorMittal Corporate Strategy analysis 5

7 Steel is generally more recyclable than competing materials Recyclability of complex end of life vehicle s materials Steel has a limited number of hard to remove elements; hence steel can be easily recycled while keeping original quality. Aluminum has a lot of hard to remove elements during melting; hence it is very difficult to be recycled while keeping original quality. removable during melting not removable during melting Sources: Hiraki et al. 6

8 Steligence, a new steel construction philosophy to support sustainable construction New steel concept for sustainable steel in construction In June 2018 ArcelorMittal launched in Europe its new philosophy for steel in construction: Steligence Described as the intelligent construction choice, Steligence enables architects, engineers, building owners and urban planners to resolve the competing demands of flexibility, creativity, economics and sustainability Key benefits include Reduced storey height due to thinner, steel + composite flooring systems, permitting more storeys within a given height Less deep foundations due to decreased weight of steel buildings Wider column-free spans, permitting total and repeated layout flexibility so that building life is extended Extraordinary range of exterior façade treatments; more creative, more durable, and with self-healing characteristics Steligence harnesses the sustainability credentials of steel not just in terms of its unmatched recyclability, but also its potential for re-use of steel components without need for melting down ArcelorMittal headquarters to be the showcase ArcelorMittal s new HQ in Luxembourg, currently under development, will be a showcase for the Steligence philosophy, and a truly circular building Sources: ArcelorMittal 7

9 Steel: the material for a sustainable future Why is the sustainable future made of steel? What is the nature of the carbon challenge for steel? What are the possible solutions to this challenge? How is ArcelorMittal addressing the challenge? 8

10 2,000 Steel Aluminium Fiberglass 5,000 Million tonnes Global consumption for most materials has tripled since 1990; material production today relies heavily on primary sources Global production Plastics 4,000 Cement 1, ,000 2, , Sources 100% Secondary* Secondary* Secondary* % Primary Primary Primary Primary Primary 0% * Defined as end of life material recycled to make same material again Sources: WSA, World Aluminium, Plastics Europe, ArcelorMittal Corporate Strategy analysis 9

11 As with virtually all materials, producing steel from primary sources requires significant energy, today s main source of CO 2 emissions Melting, Pre-metallic Smelting Metallic Refining Secondary sources 5-7 GJ for a tonne of steel Recycled steel scrap C power e - oxygen O O steel C Primary sources GJ for a tonne of steel Iron ore O O O O O O O O O Metallurgical coal and gas C C C C C O O C O O Iron C C O O CO 2 C O O oxygen O O steel C Source: ArcelorMittal Corporate Strategy 10

12 Competing materials face similar challenges, with comparable or even higher CO 2 emissions in primary source production CO 2 emissions by material, primary and secondary sources kg CO 2 per kg material Primary source Secondary source steel glass aluminium plastics fiberglass cement * * Underestimation as it does not include end of life emissions if material not recovered (up to 3kg CO 2 per kg of plastic) Source: ArcelorMittal Corporate Strategy analysis 11

13 As such, for many applications, steel remains the best option today in terms of overall CO 2 emissions and recyclability 1,800g CO 2 Bottle 0.75l 350g CO 2 CO 2 when produced from primary sources Piping system 3 metres of 6 schedule 80 Glass 420g Steel 177g Yacht 46 trawler 60kg CO 2 260kg CO 2 27t CO 2 33t CO 2 Plastic (PVC) 27kg Steel 130kg Steel versus other materials Fiberglass 10.4 tonnes Steel 16.3 tonnes Building structure one storey 5x8m Automobile Body in white 5t CO 2 5t CO 2 5.6t CO 2 1.8t CO 2 Concrete 32 tonnes Steel 2.6 tonnes Aluminium 470kg Steel 900kg * Only emissions from production of material from primary sources (virgin); does not take into account lifecycle CO 2 emissions of different materials Source: ArcelorMittal Corporate Strategy analysis 12

14 The need for primary steel will continue for decades driven by growth in the developing world Finished steel consumption growth kg steel per capita India Developing (other) China Developed Sources: WSA, United Nations, ArcelorMittal Corporate Strategy analysis 13

15 Steel: the material for a sustainable future Why is the sustainable future made of steel? What is the nature of the carbon challenge for steel? What are the possible solutions to this challenge? How is ArcelorMittal addressing the challenge? 14

16 CO 2 emissions* (gigatonnes) There is a global commitment to significant emissions reductions; Europe has set ambitious goals Low carbon economy Global greenhouse emissions futures European greenhouse emissions commitment CO 2 emissions* (gigatonnes) % -40% -80% do nothing scenario Paris Accords contain temperature rise to only 2 C contain temperature rise to only 1.5 C Power Industry Transport Other fuel Agriculture Other -20% -40% EU long term commitment -80% * Greenhouse gases (CO 2, N 2 O, CH 4, HFC, PFC, SF6, NF3) emissions in CO 2 equivalent Sources: European Environment Agency (EEA) via Eurostat 15

17 million tonnes CO 2 emissions Effective reductions in power sector CO 2 emissions have only come through significant government investment and production support in renewables Europe CO 2 emissions from power and heating 2,000 1,600 Avoided emissions from renewables (since 2005) Actual power and heating emissions Investment in renewables has averaged over 80B annually between 2008 and , Renewables capacity (GW) Renewables production (% of total power) % 14% 15% 15% 21% 30% Government investment and production support to renewables power increased from 21 to over 44 billion annually between 2008 and 2015 Sources: EEA, Ecofys, NERA, ArcelorMittal Corporate Strategy analysis 16

18 Policy, energy and technology developments will be the key determinants of successful lower emissions pathways for steelmaking Policy evolution CO 2 Successful pathways to lower emissions Lower emissions steelmaking technology developments low CO 2 Competitive energy availability ENERGY low CO 2 low CO 2 Bio materials and bio fuels markets Source: ArcelorMittal Corporate Strategy 17

19 Successful pathways will come through a combination of renewable energy sources, renewable biomass and waste, and carbon capture storage and use Today (2017) Sustainable future (2050) Steel: 1,700 million tonnes Steel: billion tonnes Population: 7.3 billion Population: 9.7 billion low CO 2 Fossil fuels CO 2 emissions Fossil fuels with carbon capture, reuse and storage Renewable biomass and waste, carbon reuse Renewable power O 2 O 2 CO 2 CO 2 Sources: WSA, United Nations, Ecology Global Network, ArcelorMittal Corporate Strategy analysis 18

20 Lower emissions could be reached using fossil fuels and carbon capture storage and use Cost challenge Carbon capture and use (CCU) & storage (CCS) Net energy costs Other costs low CO 2 Fossil fuels with carbon capture, reuse and storage CO 2 Technology challenge Energy infrastructure challenge PCI & coke PCI Carbon storage Coke PCI & coke with CCS Blast Furnace route Hydrogen based DRI Hydrogen (natural gas & CCS) Carbon use Carbon storage PCI & coke with CCU Adapt existing steel industrial footprint Develop carbon storage in Europe (up to 200mtpa CO 2 ) Opportunity to increase bio fuel and bio materials to substitute fossil fuel chemicals and plastics Source: ArcelorMittal Corporate Strategy analysis 19

21 Lower emissions could be reached using renewable biomass and waste, and carbon capture storage and use Cost challenge Carbon capture and use (CCU) & storage (CCS) Net energy costs Other costs low CO 2 Renewable Biomass and waste, carbon reuse and storage CO 2 Technology challenge Torero R&D PCI & coke Bio-coal Bio-coke Bio-PCI & biocoke Blast Furnace route Bio-PCI & biocoke with CCU Carbon storage Carbon use Bio-PCI & biocoke with CCS Adapt existing steel industrial footprint R&D Steelanol Energy infrastructure challenge 230mtpa sustainable Biomass and waste: (est. 400mtpa available today) Develop bio-coal (70mtpa) and bio coke (35mtpa) Carbon storage infrastructure (up to 200mtpa CO 2 ) Source: ArcelorMittal Corporate Strategy analysis 20

22 Lower emissions could be reached using renewable power sources and new technologies Cost challenge Carbon capture & storage (CCS) Net energy costs Other costs low CO 2 Renewable power PCI & coke Green hydrogen (electricity) Aqueous Alkaline Electrolysis (AAE) Molten oxide electrolysis (MOE) O 2 O 2 Technology challenge Water electrolysis Hydrogen based DRI Completely new steel industrial footprint Energy infrastructure challenge R&D SIDERWIN AEE MOE R&D ULCOLYSIS Green Hydrogen: +485TWh of electricity consumption (+15% today s consumption) AEE or MOE: TWh (+9-12% today s consumption) Source: ArcelorMittal Corporate Strategy analysis 21

23 Steel: the material for a sustainable future Why is the sustainable future made of steel? What is the nature of the carbon challenge for steel? What are the possible solutions to this challenge? How is ArcelorMittal addressing the challenge? 22

24 ArcelorMittal s response to the carbon challenge An evolving CO 2 target plan Advance lower emissions steelmaking technologies Advance public policy to support sustainable steel transition Stakeholder engagement Source: ArcelorMittal Corporate Strategy 23

25 We are developing a CO 2 reduction plan leveraging best practices and technologies as well as cost-effective innovations 1 Continuous improvement, leveraging best practices Implementing proven technologies, including maximising off gas reuse Incorporating cost effective innovations as they become commercially viable Adapted to industrial footprint and different geographies Source: ArcelorMittal Corporate Strategy 24

26 Innovating on potential technologies to prepare ArcelorMittal for plausible lower CO 2 emissions futures 2 2 ArcelorMittal Lower emissions steelmaking breakthrough projects Steelanol Make ethanol from process gases Pilot plant ( 125M) 80 million litres ethanol Gent, Belgium Start up 2020 Torero Process waste wood to use as PCI substitute Pilot plant ( 45M) 250,000 tpa biomass Gent, Belgium Start up 2020 ethanol IGAR Improving carbon use as reductant in blast furnace R&D and pilot project ( 20M) 2MW plasma Dunkerque, France Start up Electrolysis of iron oxide siderwin R&D and pilot project ( 20M) 100 kg iron plates Pilot plant ( 8M) Global R&D Maizières, France 2MW plasma Start up mesiere, France Start up Source: ArcelorMittal Corporate Strategy, CTO, Global R&D, FCE 25

27 Costs Costs CO 2 Costs CO 2 Costs CO 2 Costs Costs Costs CO 2 Policy needs to ensure a level playing field, otherwise erosion of steel industry in Europe without reducing emissions globally 3 3 ETS phase IV impacts to European steel (from 2020) Industry free allowance surpluses expire Unrealistic benchmarks could lead to increase of marginal production costs by ~50 /t steel in Europe European steel industry could be in significant disadvantage versus global competition Risk to viability of European steel industry without making any headway to lower emissions globally Source: ArcelorMittal Government Affairs and ArcelorMittal Corporate Strategy 26

28 Steel industry cannot go at it alone, policy will have to support the transition towards sustainable steel 3 3 Challenges for steel industry First movers towards low emissions steel penalised with structurally higher costs than competitors Abundant, cost effective energy supply from renewable sources is necessary Significant investment required to develop new technologies and transform industrial footprint Policy support needed Level playing field globally for sustainably produced steel Priority access to renewable energy at preferential rates (sustainable biomass etc.) Financing and incentives for R&D and investment to transition to sustainable steelmaking Instruments Border tax / input cost parity / tax credits Mandated green steel standards Preferred renewables consumer status for power, biomass & waste Financial loans Research grants Source: ArcelorMittal Strategy and ArcelorMittal Government Affairs 27

29 What is common about all of these plausible futures? 28