Czech Steel Union Seeks EU Intervention for Climate Ambitions
Czech Republic’s Steel Union Chairman Daniel Urban said “EU is paying the most attention to the production of steel using hydrogen, which has replaced
Czech Republic’s Steel Union Chairman Daniel Urban said “EU is paying the most attention to the production of steel using hydrogen, which has replaced coke in the reduction of iron ore. This process is very energy-intensive. We estimate that the production of 5 million tonnes of steel by hydrogen in the Czech Republic would mean a tenfold increase in the industry's consumption to approximately 21 TWh per year. This is almost a third of the consumption of the entire Czech Republic and ten times the current consumption of the Czech smelters. The second way, already used today, is the production of steel from scrap in electric arc furnaces. However, it is more emission-intensive than the hydrogen route and faces its own obstacles, including a possible lack of scrap and unsuitability for the production of some types of steel.”
Třinecke zelezarnyCEO Mr Jan Czudek said “In February, the price of the emission allowance reached a record 40 euros, which is 30 euros more than two years ago. Although European smelters receive allowances free of charge, a full 95% of them have to buy more allowances, as the free allocation is gradually decreasing, while prices will continue to rise. Such a rapid rise in the price of allowances is surprising for everyone, including the Commission. There is a danger that even companies that have decided to make major low carbon investments may be punished in the end. Due to how slow the permitting process is in the Czech Republic, companies will be pouring a lot of money into allowances for another five to ten years instead of investing in new, cleaner technologies. It will be obvious that this will worsen their global competitiveness.”
He added "Europe's climate ambitions represent a great opportunity for industry, but also a threat, as sectors covered by the EU ETS are likely to bear a disproportionate burden than other sectors, from transport to agriculture," said Urban. The reason is simple: it is easier for the European Commission to tighten existing rules, reduce the volume of allowances and cut the free allocation, which will drive the price of allowances even higher. This will not be a problem for electricity producers, as the increased cost of producing fossil fuels will be passed on to end customers, but it will be a problem for industry, as it will further weaken its competitiveness in Europe and beyond.”
He said “By at least 2030, the carbon tax must be a complement to existing safeguards, not an alternative. Otherwise, industry in Europe will not survive and global emissions will continue to rise.”
The European steel industry is one of the few energy-intensive industries that have committed to reducing its greenhouse gas emissions by 55% by 2030 compared to 1990. The only way to climate neutrality by 2050 is to start testing and exploiting as soon as possible revolutionary technologies for steel production, because European smelters today are meeting the technological limits of production processes. A prerequisite for a successful transformation of the steel industry is an intelligent approach by politicians, who must ensure the conditions for future development and help with its financing. A level playing field in the global market and enough green electricity for the sector's expected electrification will be key.