Posted on 03 Oct 2024
In a world moving towards sustainability, the steel industry—one of the most carbon-intensive sectors—is under pressure to reinvent itself. Steel, a cornerstone of modern infrastructure, is indispensable.
However, traditional steel production methods rely heavily on coking coal-based blast furnaces, emitting more than 2,000 kg of CO2 per ton of finished steel. With Southeast Asia’s steel production capacity forecasted to exceed 100 million metric tons by 2030, this could result in over 200 million tons of CO2 emissions annually.
A STRUGGLING INDUSTRY WITH UNTAPPED POTENTIAL
Thailand, once a leader in Southeast Asia’s steel production, faces significant challenges. As countries like Vietnam and Indonesia modernise, Thailand’s ageing steel making and hot rolling facilities struggle to stay competitive. The nation’s steel production capacity is operating at a dismal 29.3% utilisation rate, down from 31.2% in 2023. Heavily reliant on steel imports—11 million tons out of 17 million tons in annual demand—Thailand lacks the ability to meet higher-grade steel requirements for sectors such as automotive manufacturing, a reliance that further weakens its global competitiveness.
At a time when industries are aligning with net-zero carbon goals, the Thai steel industry must evolve. Global initiatives like the European Union’s Carbon Border Adjustment Mechanism (CBAM) are transforming market dynamics by taxing carbon-heavy imports. This presents a unique opportunity for Thailand to position itself as a hub for green steel production. With the right approach, Thailand could reclaim its role as a regional leader while contributing to global decarbonisation efforts.
Meranti Green Steel’s Offtake Partnerships for Export of Green HRC
THE GREEN STEEL SOLUTION
Green steel offers a viable alternative to conventional steelmaking. Through energy-efficient processes and hydrogen-based iron production, green steel can cut CO2 emissions from steelmaking to less than 200kg per ton of steel. The key lies in direct reduced iron (DRI) methods, where natural gas or green hydrogen is used to remove oxygen from iron ore, drastically reducing carbon output. When paired with electric arc furnaces powered by renewable energy, green steel offers a sustainable future, significantly slashing CO2 emissions compared to traditional production methods.
MERANTI GREEN STEEL: LEADING THE CHARGE
Meranti Green Steel is at the forefront of Thailand’s decarbonisation efforts, driving a transformative shift in the steel industry. The company aims to cut its carbon emissions by more than 70% through the adoption of a portion of green hydrogen in the DRI process and by sourcing renewable energy for its electric arc furnaces. Their vision is clear: by gradually increasing the share of green hydrogen to 90% in iron making, Meranti Green Steel can potentially save up to 4 million tons of CO2 emissions annually—the equivalent of planting 200 million trees each year.
Collaboration lies at the heart of Meranti Green Steel’s strategy. By partnering with Green Steel Western Australia (GSWA), they ensure a steady supply of high-grade iron ore pellets, which are reduced into briquettes for use in their Thailand-based green steel plant. Additionally, their alliance with Global Power Synergy Public Company Limited (GPSC) helps secure renewable energy through Power Purchase Agreements (PPAs) for sustainable steelmaking.
Incorporating cutting-edge technology is also key to Meranti Green Steel’s leadership. They work with Danieli, one of the world’s leading steel equipment and engineering firms, utilising state-of-the-art continuous processes to manufacture green steel with reduced energy consumption. This innovative approach eliminates the need for energy-intensive reheating at multiple stages of production, significantly enhancing efficiency.
A preview of Meranti Green Steel’s first green steel plant in Southeast Asia, located near Rayong, Thailand.
BREATHING NEW LIFE INTO THAILAND’S STEEL SECTOR
Green steel production doesn’t just support environmental goals—it also presents a lifeline for Thailand’s ailing steel industry. The establishment of Meranti Green Steel’s plant is expected to create around 1,000 direct jobs and as many as 5,000 indirect jobs, contributing to the local economy. During construction, an estimated 10,000 additional jobs will be generated. And in line with its vision to balance nature and development, Meranti Green Steel will value people, communities, and the environment during the construction and operations of the new green steel plant.
On a broader scale, Meranti’s initiatives could reduce Thailand’s reliance on steel imports, improve the country’s trade balance, and enhance its competitiveness in value-added segments like automotive manufacturing. The rise of electric vehicles (EVs) offers significant potential, with green steel set to play a pivotal role in producing the next generation of cars.
Global consumer preferences are shifting, with an increasing willingness to pay a premium for sustainable products. Industries such as EV manufacturing and home appliances are already passing on these costs to consumers, highlighting the growing demand for eco-friendly solutions. Green steel’s emergence taps directly into this market shift.
SHAPING A SUSTAINABLE FUTURE WITH GREEN STEEL
As global demand for green steel is expected to increase fifteenfold by 2035, green steel could account for over 25% of total global flat steel demand by 2040. Meranti Green Steel’s pioneering efforts will not only revitalise Thailand’s steel industry but also contribute to a worldwide shift toward sustainable steel production, positioning the nation as a leader in decarbonisation and setting the stage for a net-zero future.
With innovation, partnership, and sustainability at its core, Meranti Green Steel is proving that the future of steel can indeed be green.
Source:Bangkok Post
