Posted on 25 Feb 2022
The 2021 SEAISI Sustainability & Construction Fortnight e-Event (The Fortnight) is a one-stop mega event (Seminar – Exhibition – Networking) of SEAISI e-Event which was held on 15th -26th November 2021. With the keyword of “Sustainability”, this event tries to “find a solution” for the steel industry and construction industry to move forward, and also how Green Investment and Sustainable Technologies will play important role for the future of the industry.
One of the highlights of this event will be the Special Session called Global Climate Change Strategies & Policies for Steel Industry which talked about environmental issues in today’s world, industry strategies in facing the challenges of climate change and government support in the form of policies in various countries. This session involves panellists from several countries who have strong competencies in their fields, namely:
First part of this session started with presentation from Ms. Cécile with the title “Towards A Low-Carbon Steel Industry: Stakes & Strategies in the EU”. In this presentation, she shared the strategy taken by countries in Europe to reach carbon neutrality in 2050 and how Europe has become a front runner in climate action. Steel Industry as one of contributor in the carbon emission (5-6% of Europe’s total emission) is also involved in this program for both steel producer and steel user, with the target of decreasing carbon emission from 221 megatons to less than 15 megatons in 2050. The road to decarbonisation especially in European steel industry is based on 2 Main Pillars which is Circular Economy (scrap based EAF) and Breakthrough Technology (using green H2-DRI EAF). This means that there will be a shift from BF-BOF to EAF as the major production type by 2050, with Low Carbon Electricity, scrap, H2 as the other core strategy.
There are also multiple challenges towards Decarbonisation in the Europe from the angle of Technology, Social, Market, Competition, and Cost. To face these challenges, a systemic approach needs to be built to make a comprehensive strategy beyond the steel factor. And of course, a broad range of policy tools are also needed, especially those related to financial instruments, regulation and social elements.
Second part of this session is a presentation from Dr. Hitoshi Dohnomae about “Japan’s Effort to Achieve Carbon Neutrality In 2050". This is also an interesting presentation since it covers the Japanese Government and Japanese steel industry approaches to carbon neutrality. He highlighted that Japanese Government is also concern about environmental issues with the declaration of Prime Minister Suga “The aim of achieving a carbon-neutral, decarbonized society by 2050” at the 203rd Extraordinary Session of the Diet. This shows that The Suga administration is committed to the realization of a green society, with a positive cycle of economic growth and environmental protection as a pillar of its growth strategy.
With “Innovation” as the key, Japanese Government has compiled several policies to achieve Carbon Neutrality as targeted before. One of the policies is Green Growth Strategy in industrial sector, where the Government select 14 sectors (offshore, automobile, logistics, carbon recycling/material etc.) that are expected to grow toward the year 2050. Government will set goals in each sector to strengthen international competitiveness and to steadily implement action plans according to the phases of technology. To promote this strategy, the Japanese Government will leverage all policies and do the best to encourage companies to take on positive challenges toward innovation. One thing to be highlighted is that the Japanese Government has a Green Innovation Fund (2 trillion Yen Fund) to encourage companies to take on ambitious challenges as well as developing guidelines and roadmaps for the smooth supply of funds.
On the Steel Industry side, with the Roadmap from JISF, the Japanese steel industry has developed innovative steelmaking technologies such as COURSE50, which will reduce 10% of CO2 emissions from the BF-BOF route, and they aim to implement these by 2030. Of course it is a huge challenge to achieve completely zero carbon steel due to the nature of iron and its association with oxygen. For removing oxygen, conventional iron making process (blast furnace) usually use carbon (coal) which produce carbon dioxide (CO2). In zero-carbon steel, hydrogen is used instead of carbon. However, it is not as simple as just buying hydrogen from somewhere and replacing it with carbon. There are preparations needed in terms of technology and social infrastructure to guarantee inexpensive and stable supply of not only hydrogen supply but also zero emission electricity.
Third part on this session is presentation by Mr. Wee Jin Yeoh with title “ASEAN Sustainability Policies, Industry Developments & Implications for the ASEAN Steel Industry”. He spoke about the effect of climate change manifestations in ASEAN countries, such as coastal erosion, rising sea level and sinking cities, typhoon, biodiversity losses etc.
Even though ASEAN countries are not significant generators of CO2 compared to other country in the world, many are working on tackling climate change issues. Thailand is ahead in testing an Emissions Trading System (ETS), while Singapore has already implemented Carbon Tax, with potentially an ETS upcoming in 2022/23; Indonesia’s Carbon Tax will start in 2022 and an ETS is expected by 2025. Vietnam is also heading towards development of an Emissions Trading System, while both Philippines and Malaysia have indicated stopping new Coal Fired Power Plant projects. So far, we can see that ASEAN-6 countries climate change strategy is focused on transitioning away from coal based energy sources and it will not easy considering prices and availability.
Another thing that is interesting in this presentation is about Carbon Pricing. Although this is not a new thing, but in some ASEAN country it will soon to be implemented. Carbon pricing mechanisms in ASEAN started with the Singapore Carbon Tax (introduced at January 2019 - December 2023) which is applied to Companies that emit more than 25,000 tonnes of GHGs per year in Singapore, with no exemptions. Another country that will also have a Carbon Tax is Indonesia, which will start in April 2022, targeting the energy sector, but the law stipulates that Carbon Tax will be applied to individuals and entities that “buy goods containing carbon and/or carry out activities that produce carbon emissions”.
Regarding ASEAN steel industry situation, the interest in investing at the steel sector is still strong. With its attractive market and more free trade area (AFTA, ACTFA), steel industry in ASEAN is facing with major challenge like Global Decarbonisation and China supply reforms. This is happening because since 2014, the latest investments are focused on megamills which are mostly based on BF/BOF technology. This type of technology brings 5 times more carbon emitted compare to EAF with the same production of hot metal. With more than 85 million MT of new capacities being planned, the ASEAN Steel Industry is heading towards adding more carbon, unless carbon capture, utilization and storage technologies (CCUS) are implemented.
SEAISI would like to express its sincere appreciation to all the esteemed Panellists: Mr. Joseph Yong for chairing the session fruitfully and Ms. Cécile Seguineaud, Dr. Hitoshi Dohnomae, Mr. Wee-Jin Yeoh for the insights and sharing of experiences.
Please stay tuned for more upcoming events at SEAISI and stay healthy wherever you are.
On behalf of the SEAISI Technical Committee
Mochamad Ibnu Sina
Chairman
Source:SEAISI
