Steel Industry Poised to Make Significant Contribution to Europe's Low-Carbon Goals
07/05/2013 - The steel industry in Europe has an important role to play as the continent works toward diminishing greenhouse gas emissions and building a sustainable industrial landscape, says a new report from The Boston Consulting Group and the Steel Institute VDEh.
"Steel's Contribution to a Low-Carbon Europe: Technical and Economic Analysis of the Sector's CO2 Abatement Potential," a new report from The Boston Consulting Group (BCG), prepared with the Steel Institute VDEh, provides a realistic view of how the steel industry can respond to the challenge of climate change.
The European Commission's long-term target is to reduce greenhouse gas emissions by 80–95% of 1990 levels by 2050. To reach this goal, the EC has stated that the continent's industries as a whole must cut back on emissions by 34–40% below 1990 levels by 2030 and by 83–87% by 2050. This report takes that roadmap and provides a realistic technical view of steel's CO2-mitigation potential, as well as the economic viability of new emission-reducing technologies.
From an economic point of view, according to the report, an absolute CO2 reduction of about 10% from 1990 levels is technologically and economically possible. This would equal a 25–30% reduction of emissions per ton of steel produced compared with 1990 levels. "We are shedding light on the true techno-economic potential for the steel industry," said Martin Woertler, a BCG senior partner and coauthor of the report. "These findings should affect the discussions on how the emission targets for the steel industry should be realistically set and which emission-reducing technologies should be prioritized."
After presenting a clear overview of the steel industry and its historical development, the report assesses the sector's emission-reduction potential. "In this asset-intensive industry, there has to be a degree of stability before substantial investments can be made," said Felix Schuler, a BCG partner and coauthor of the report. "Policymakers must define realistic targets that balance ecological and economic interests and provide stable investment conditions."
Since steel's impact on emissions is not confined to the production process, the report also considers the important concept of steel as a mitigation enabler — that is, its emissions-reduction potential through strictly selected and conservatively calculated CO2-reducing technologies. Eight such applications, including the production of lighter cars and the building of renewable power plants, can account for emissions reductions of similar dimensions as the overall CO2 footprint of the EU-27 steel production.
To download a copy of the report, please go to www.bcgperspectives.com.
