Stephen Brown on the biggest challenges to the decarbonisation of metal production

Ahead of the Climate Innovation Forum 2021, we spoke to Stephen Brown, CEO at Primetals Technologies UK, Mitsubishi Heavy Industries (MHI) Group, to discuss the biggest challenges to the decarbonisation of metal production and the key takeaways from the event.

Stephen spoke at our recent Climate Innovation Forum on our industrial decarbonisation panel.  As the CEO of Primetals UK, what do you see as the biggest challenge to the decarbonisation of metal production?

It’s always difficult to identify a single item as the “biggest challenge”, but perhaps it’s a good time to raise the lack of a world-wide harmonisation on the mechanisms to encourage decarbonised steel. I firmly believe that all steelmakers internationally recognise the importance of decarbonisation, and have it as a strategic requirement, but they have to balance major investment decisions (in a variable-margin business depending on economic conditions) against the evolving CO2 regulations – it makes the decision making quite risky and slows it down.

It’s clear that financial investments in new capacity and product improvements will always come ahead of decarbonisation unless a common set of mechanisms and regulations are agreed as competitiveness advantage and profitability is what business focuses on first and foremost.

What advantages and disadvantages does the UK have compared to other countries in the industrial decarbonisation challenge?

When we’re thinking about the move to low-carbon electric arc furnace steel production, electricity cost is a disadvantage and I don’t see government incentive to change that. The move to green power, on the other hand, is a clear advantage in the UK and huge strides have been made over recent years to develop this.

Another potential advantage in this area is that we do have significant scrap availability – most of which is currently exported and could be used to make low-carbon steel in the UK.

When it comes to green steel production based on iron ore, a common challenge is that you need a significant amount of electricity to generate hydrogen. Massive amounts of this zero-carbon feedstock will be needed to give the industry an alternative to high-polluting blast furnaces. But no-one has the renewable power generation capability yet to enable large scale green hydrogen production. That needs to change and this is achievable with the correct investment strategy.

What do you view the scalability of Hydrogen technologies looking like in the future?  How are you incorporating hydrogen into your future strategy? 

At the simplest level you can say that hydrogen scalability shouldn’t be an issue – that development will come. The reality is that it will take some years to get a hydrogen infrastructure to support both industry and domestic users (for power or other uses) and the costs are expected to be high. Primetals Technologies regard hydrogen as a key driver towards steel decarbonisation – this is reflected in our technology strategies and demonstrated for example in our HYFOR pilot plant. We also recognise that there are other opportunities in parallel, for example CCU and biomass (and CCS for certain locations) which can be implemented and will provide cost-effective ways to support carbon neutrality.

Strategically the HYFOR development is important for Primetals but also for the industry and should lead to results in the next 2 – 3 years that allow commercialisation of the plant should the results be as expected in trials so far.

Steel is 100% recyclable, but in the UK we continue to send our scrap steel abroad to be repurposed and returned.  How can we incorporate a more circular economy/more recycling  into our industrial decarbonisation strategy?

I mentioned the scrap challenge earlier – it’s illogical to do what we do currently. This steel could be recycled in the UK but the current economic model still means it’s cheaper to transport it offshore, reprocess it and re-import it , generating even more CO2 emissions in the process. Changing this would strengthen the industrial base, create jobs, and improve our CO2 footprint all at the same time.

In the panel discussion you mentioned that it will be critical to bring developing countries on board with industrial decarbonisation.  Why is this important and how can we ensure it happen whilst also ensuring the cost of the transition isn’t borne unfairly?

As countries move up the development ladder, they tend to use more steel per capita. Steel scrap will not be enough to close this supply gap and therefore a demand for clean iron units (i.e. not via scrap recycling) will remain.

Currently China is a huge exporter of steel, and this is largely produced via reduction of ores using carbon. Other countries will want to produce at least some of this steel locally rather than import. So buy-in from China for decarbonisation (which they have already announced as a 2060 target) as well as encouraging other countries to invest in the infrastructure for green power is very important.

What were your key takeaways from the Climate Innovation Forum?

To make decarbonisation work in the UK and worldwide we need three things:

1. A long term cross party (political) agreement on the strategy in the United Kingdom to allow full business engagement and strategic plans to be drawn up that we can align with.
2. A world-wide harmonisation on the mechanisms to encourage decarbonised steel.
3. Investment on the scale not currently considered by any government. What is required is an investment not seen in this sector for many decades.

However what I would say is that the government has taken the first steps required and we must engage in business and assume positive intentions.

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Mitsubishi Heavy Industries (MHI) Group spoke at the Climate Innovation Forum 2021 which took place 29 June - 1 July during London Climate Action Week. Missed it? Don't worry, you can now watch all sessions on demand here.