Voluntary Energy Management in the Japanese Steel Industry

Transcription

1 1 Voluntary Energy Management in the Japanese Steel Industry 2017 SEAISI Conference & Exhibition Resorts World Sentosa, Singapore Dr. Kenichiro Fujimoto The Chair for International Environmental Strategic Committee The Japan Iron and Steel Federation General Manager, Head of Department Global Environmental Affairs Department Environment Division Nippon Steel & Sumitomo Metal Corporation

2 CO 2 emissions in Japan in 2015 Steel industry accounts for 15% of CO 2 emissions in Japan (180Mt-CO 2 ) CO 2 emission from industrial sector has been decreasing, while that of commercial and residential sector is increasing year by year. 2 Pulp, Paper and Paper Products 2% Other industries 8% Ceramic, Stone and Clay Products 4% Chemical 5% Iron and Steel 15% (180Mt-CO 2 ) Industrial processes 4% Energy industries 6% Waste 2% Commercial and other sector 22% Residential 15% Agriculture and others 0.3% Transport 17% CO 2 emissions in Japan (FY2015) Total CO 2 emission: 1,227Mt-CO 2 Source: Green House Gas Inventory Office of Japan

3 3 GHG* Reduction Target under Paris Agreement Paris Agreement was enacted in November 2016 and all the nations will have GHG reduction target after 2020 Nation/Region INDCs (Intended Nationally Determined Contributions) Japan Reduce GHG emissions by 26% by 2030 compared to 2013 China Intend to peak emissions before 2030, cut levels of carbon emissions per unit of GDP 60-65% on 2005 levels by 2030 India Cut greenhouse gas emissions for each unit of GDP 33-35% from 2005 levels by 2030 USA Reduce GHG emissions by 26-28% by 2025 compared to 2005 EU Reduce GHG emissions at least by 40% by 2030 compared to 1990 Indonesia Unconditional 29% greenhouse gas emissions cuts on business as usual by With international support this could rise to 41%. Malaysia Cut emissions intensity 35% from 2005 to 2030, or up to 45% with international support Philippines Cut emissions by 70% by 2030 relative to a business as usual scenario Singapore Intend to peak emissions around 2030 and cut carbon emissions per unit of GDP by 36% from 2005 levels by 2030 Thailand Intend to cut emissions by 20% from business as usual by 2030, rising to 25% on international support Vietnam GHG cuts of 8% below business as usual by 2030, rising to 25% on international finance *GHG: Green House Gas

4 4 Japan s GHG reduction target - Breakdown Maximum implementation of renewables Efficiency improvement of thermal power plants Restart of nuclear power plants Energy conversion -27.7% Industry -6.5% Total -26% by 2030 vs 2013 Commitment to a Low Carbon Society Energy saving of equipment/facility and energy management Commercial and others -39.8% Energy conservation of buildings Energy saving of equipment and energy management Dissemination of nextgeneration vehicles Optimization of traffic flow Transport -27.6% Resident -39.3% Promotion of social movement Energy saving of residences and equipment

5 5 Voluntary CO 2 reduction actions by Japanese industrial sector 60 industries including steel have pledged to the voluntary CO 2 reduction targets towards 2020 and 2030 under Commitment to a Low-Carbon Society Commitment to a Low-Carbon Society and Paris Agreement have the same framework Pledge to a voluntary target and enhance actions through review by third party Keidanren's * Commitment to a Low Carbon Society Paris Agreement Pledge & review approach Raising target through PDCA cycle Each industry to set targets voluntarily Raising the level of ambitions through international review Each nation to voluntarily develop NDCs (2) Review (1) Pledge Industry A Industry B Industry C Nation A Nation B Nation C *Keidanren: Japan Business Federation

6 6 JISF s PDCA cycle for CO 2 reduction actions CO 2 reduction actions of Japanese steel industry are based on PDCA (Plan, Do, Check and Act) cycle with the aim to improve the energy performance, which complies with ISO50001* JISF complies with ISO50001 (Energy Management) since 2014 Identify significant energy use Establish baseline, EnPIs and reduction targets EnPIs: Energy Performance Indicators Plan Do Build up a framework for data collection Distribute and collect survey form from participating companies Analyze energy performance annually Act Check Examine target and reduction actions Undergo performance review by third party including governmental council *ISO50001 is an international standard for energy management systems that was published in June 2011

7 7 Plan#1: Setting CO 2 reduction baseline and target JISF settles CO 2 reduction target towards 2020 and 2030 under its voluntary initiative JISF s Commitment to a Low Carbon Society. JISF uses BAU (business as usual) to settle baseline and target BAU refers to 2005 levels of technology JISF s CO 2 reduction targets towards 2020 and 2030 Actions Phase I (2020) Phase II (2030) (1) Promotion of energy saving actions Next-generation coke production technology More efficient power generation 0.9Mt-CO 2 1.3Mt-CO 2 1.1Mt-CO 2 1.6Mt-CO 2 More energy conservation 1.0Mt-CO 2 1.5Mt-CO 2 (2) Use of waste plastics* 2.0Mt-CO 2 * 2.0Mt-CO 2 (3) Innovate Technologies - 2.6Mt-CO 2 Total 5.0Mt-CO 2 9.0Mt-CO 2 *Among 5Mt-CO 2 of total target towards 2020, JISF prioritized 3Mt-CO 2 of reduction arising from energy conservation and other voluntary actions by steelmakers. The target is assuming that the government establishes the necessary collection infrastructure of waste plastics.

8 Plan#2: BAU (Business as Usual) baseline and target 8 BAU emissions y = x x; crude steel production (100Mt) y; BAU emissions (100Mt) JISF s target 5 Mt-CO 2 reduction vs BAU level in Mt-CO 2 reduction vs BAU level in 2030 Pros Energy saving and CO 2 reduction efforts are assessable irrespective of changes in production volume Cons Following the trend in GHG emission is difficult

9 9 Do#1: Build up a framework for data collection JISF secretariat collects and aggregates CO 2 emissions data from member companies JISF Energy & Technologies Committee verifies the aggregated data and analyzes the cause of increases and decreases in CO 2 emissions Data will be analyzed for JISF total as well as separately for 1. Integrated steel plants with blast furnace 2. EAF mill for specialty steel 3. EAF mill for ordinary steel Comply with ISO50001 (Energy Management System)

10 Do#2: Boundary 10 Boundary is based on a steel mill, instead of individual processes in a steel mill Comply with ISO50001 (Energy Management System)

11 Do#3: Survey Form 11 Same survey form for integrated steel plant and EAF Calculation includes energy use and CO 2 emissions linked to electricity and other items purchased from external suppliers as primary energy Crude steel production Crude steel production t Unit Year Energy used External energy sales Unit Year Unit Year Kerosene kl Diesel fuel kl Bunker A kl Coal coke t Bunker B/C kl Tar t LPG t COG 10 3 Nm 3 Petroleum coke t BFG 10 3 Nm 3 Coal (coking) t LDG/EFG 10 3 Nm 3 Coal (PCI) t Oxygen 10 3 Nm 3 Coal (others) t Steam t LNG t Electricity MWh Town gas 10 3 Nm 3 Diesel fuel kl Coal coke t Tar t COG 10 3 Nm 3 BFG 10 3 Nm 3 LDG/EFG 10 3 Nm 3 Oxygen 10 3 Nm 3 Steam t Electricity Utilities MWh Cooperative thermal power MWh Others MWh Similar to ISO14404

12 Do#4: Analysis of energy performance 12 JISF conducts a cause analysis of CO 2 emissions increase/decrease every year In FY2015, aging coke oven bricks caused CO 2 emissions increase by 1.09Mt-CO 2, while several CO 2 emission reduction initiatives contributed to CO 2 emissions reduction by 2.12Mt-CO 2. Analysis of FY2015 performance of CO 2 emission in Japanese steel industry (Mt-CO2) 19, ,750 VS. BAU emissions.-2.24mt-co2 18, ,250 18, VS. Target +0.76Mt-CO2 17,750 17, ,250 17, BAU emissions Aging coke oven bricks Energy/ 2013 CO2 conservation Others FY15 emissions Target based on FY15 production volume

13 Check: Review by third party entities JISF annually undergoes performance review by the governmental council and Keidanren (Japan Business Federation) for its voluntary CO 2 reduction initiative JISF s Commitment to a Low Carbon Society. 13 Feedback from the governmental council More detailed approach is needed in order to incorporate changes in the composition of steel products, which highly affects CO 2 emission volume, in BAU analysis.

14 14 Act: Reexamine targets and initiative as needed As indicated by the governmental council, BAU baseline used to be fixed by pig iron ratio (upstream) and production mix (downstream) in 2005 level. Between 2005 and 2015, CO 2 emissions were influenced by pig iron ratio and production mix regardless of CO 2 reduction efforts Upstream CO 2 emission increased by 5.29Mt-CO 2 due to increase in pig iron ratio Downstream CO 2 emission decreased by 2.22 Mt-CO 2 due to increase of HRS ratio and decreased of cold-rolled sheets (cold-rolled sheets is more CO 2 intensive than HRS) Now JISF uses production composition index to incorporate these factors in the BAU analysis, in order to evaluate CO 2 emission performance solely by CO 2 reduction efforts. Share of Pig Iron in FY2005 and FY2015 (Upstream processes) BF-BOF 74.2% 77.4% +3.2% EAF 25.4% 22.3% -3.1% Pig Iron 73.6% 77.3% +3.7% Share of Long and Flat Products in FY2005 and FY2015 (Downstream processes) ratio (%) ratio (%) Long Shape Bar total Flat Plate HRS Cold-rolled flat products Galvanized sheet total Determination of FY2015 Emissions using Production composition Index Upstream: Mt-CO 2 Downstream: Mt-CO 2 Total: Mt-CO 2 from original BAU

15 Overview of Climate Change Policy Taxes 15 Carbon/energy tax, waste disposal tax or charge Climate Change Policy Economic Instruments Regulatory Approach Energy efficiency standards for equipment, labelling and public procurement regulations Voluntary Approaches Voluntary agreements on energy targets or adoption of energy management systems, or resource efficiency Tradable Allowances Emission trading, emission credits under CDM, tradable green certificates Subsidies Subsidies for energy audit, fiscal incentives for fuel switching JISF s Commitment to a Low-Carbon Society Source: IPCC AR5 WG3 Technical Summery

16 16 Which policy will be effective for CO 2 reduction in steel industry? Economic Instruments Regulatory Approach Carbon taxes are often established for generating tax revenue rather than mitigating climate change Setting a fair cap under Emission Trading Scheme (ETS) is very difficult Regulatory approach will be effective when there remains a potential for CO 2 reduction Lead to carbon leakage? Weaken the steel industry? Voluntary Approaches Speedy and flexible Steel industry itself has the best understanding of current energy use and CO 2 emission, the potential for further reduction, and the feasibility of technology deployment

17 Summery 17 Paris Agreement encourages the nations to take actions for climate change mitigation by economic instruments, regulatory approach or voluntary actions JISF s primary means for GHG reduction is voluntary actions JISF pledges to reduce 9Mt-CO 2 vs BAU level by 2030, which is incorporated in Japan s GHG reduction target by 2030 JISF received ISO50001 certification in 2014, which underpins the transparency and reliability of these voluntary actions JISF assumes voluntary actions is the most suitable for the steel industry. Steel industry itself has the best understanding of current energy use and CO 2 emissions, the potential for further reductions, and the technological and economical feasibility.

18 Thank you 18