energy consumption scenario in the industry sector: sector extension and analysis related to the...

8/8/2019 Energy Consumption Scenario in the Industry Sector: Sector extension and analysis related to the VLEEM Model (M

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EKV/607

Energy Consumption Scenario in the Industry SectorSector extension and analysis related to the VLEEM Model

A.T. Mrquez Arreaza

Master of Science ThesisDivision of Heat and Power Technology2003

DepartmentofEnergyTechnologyRoyalInstituteofTechnology

Stockholm,Sweden


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Proposal and approval of aMaster of Science thesisat the Department of Energy Technology

Title: Energy Consumption Scenarios in the Industry Sector: Sector extension andanalysis related to the VLEEM ModelAuthor: Timo Mrquez Arreaza Report nr: 607Project: Pages: 77 Drawings: noneSupervisor at KTH: Dr. Andrew Martin Date: 2003-12-11 Appendices: 3Overall responsible at KTH: Dr. Andrew Martin

Approved at KTH by: Signature:

Overall responsible at industry: Dr. Martin Patel

Industrial partners:Department of Science, Technology and Society/Copernicus InstituteUtrecht UniversityThe NetherlandsApproved by industrial partners: Signature:

Approved for distribution:Open: X

Abstract

The industry sector accounted for a third of the world's energy consumption in 2000. While most studiesproject material and energy demand for the next decade or two, few address their demand for a longertimeframe (e.g. 2100). For the mentioned timeframe and at a world level, this report attempts to projectand analyze material production and energy use for the iron and steel and paper and pulp sectorsbased on two indicators for a) level of activity (i.e. production level and structure) and b) energyconsumption. Based on a business as usual scenario and the hypothesis that the relationship betweenmaterial consumption and wealth is roughly the same across regions, world steel and paper productionis projected to increase four-fold and seven-fold respectively, compared to 2000 levels. In specialdeveloping regions as China and South Asia are projected to increase drastically their production andenergy consumption after 2050 (e.g. Chinas steel production by six-fold and paper production byfifteen-fold between 2000-2100). Under the presented technological development the energy

projections show that efficiency is to have a considerable effect on energy consumption when comparedto frozen-efficiency scenario (i.e. an energy world potential reduction of 48% for the steel sector and35% for the paper sector in 2050). Although such large timeframe is filled with uncertainty the resultspresented provide possible insight on material consumption developments and energy demand at worldlevel under the aforementioned hypothesis.

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Name/CompanyAnn Brnth / HPT SecretaryAndrew Martin / KTHUtrecht University

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Energy Consumption Scenarios in the Industry Sector:Sector extension and analysis related to the VLEEM Model

TABLE OF CONTENTS

1 Introduction ..................................................................................................... 1

1.1 Definition of Problem................................................................................. 11.2 Overview.................................................................................................... 2

1.3 Objectives .................................................................................................. 3

2 Methodology..................................................................................................... 4

2.1 General Methodology................................................................................. 4

2.1.1 Step 1: Activity level.......................................................................... 5

2.1.2 Step 2: Specific energy use................................................................. 7

2.1.3 Step 3: Future energy use in absolute terms ........................................ 8

2.2 Computation Implementation ..................................................................... 82.3 Other methodologies:................................................................................. 9

3 Description of the Sectors...............................................................................11

3.1 Iron and Steel: Energy Use for Steelmaking ..............................................113.1.1 Overview of the iron and steel process...............................................11

3.1.2 Current Energy Use...........................................................................14

3.2 Paper and Pulp: Energy Use for papermaking ..........................................15

3.2.1 Overview of the Paper and Pulp process ............................................15

3.2.2 Current Energy Use...........................................................................17

4 Physical Activity Indicators............................................................................19

4.1 Iron and Steel: Production and Consumption............................................20

4.1.1 Historical data for iron and steel ........................................................20

4.1.2 Projections ........................................................................................22

4.2 Paper and Pulp Sector: Production and Consumption ..............................25

4.2.1 Historical data for paper and pulp......................................................25

4.2.2 Projections ........................................................................................26

5 Specific Energy Indicator...............................................................................30

5.1 Iron and Steel Sector.................................................................................31

5.1.1 Assumptions and projections .............................................................31

5.1.2 Characterization of energy technologies ............................................36

5.2 Paper and Pulp Sector ..............................................................................39 5.2.1 Assumptions and projections .............................................................39

5.2.2 Characterization of energy technologies ............................................43

6 Projections ......................................................................................................46

6.1 Demographics and Economics ..................................................................46

6.2 Iron & Steel ..............................................................................................486.2.1 Production.........................................................................................48


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6.2.2 Structural Changes: EAF and BOF ....................................................50

6.2.3 Energy Projections ............................................................................50

6.2.4 Effects of Efficiency and Structure ....................................................51

6.2.5 Energy use by fuel.............................................................................52

6.3 Paper & Pulp............................................................................................53

6.3.1 Production.........................................................................................53

6.3.2 Energy Projections ............................................................................55

6.3.3 Effects of Efficiency..........................................................................56

6.3.4 Energy use by fuel.............................................................................56

7 Discussion........................................................................................................58

8 Conclusions .....................................................................................................61

9 References .......................................................................................................62

10 Appendix .....................................................................................................67


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INDEX OF TABLES

Equation 1: Physical Sector factor analysis............................................................................4Equation 2: Apparent consumption relation to production and trade. ...................................... 5Table 1: Ranges of primary energy intensities of key iron and steelmaking processes

(GJ/tonne steel); compiled by Price et al. 2002. ...................................................................14Table 2: Ranges for primary energy intensities for papermaking. Compiled from de Jong,1998 and de Beer, 1999. .....................................................................................................17Table 3: Historical data needed to construct apparent consumption cap vs. GDP per capitatrend (level of activity) for the Iron & Steel and Paper & Pulp sectors. .................................. 19Equation 3: Projected production as a function of the projected apparent consumption and theratio trade-to-apparent consumption of the year 2000. ......................................................... 20Equation 4: Fitted curve for the apparent consumption trend, where a=634.28, b=-8585.44and correlation coefficient = 0.7575. .................................................................................... 22Equation 5: Fitted curve for the apparent consumption trend for paper and pulp, wherea=1.85e-04, b=1.39, c=538.18 and d=-20760. .....................................................................26Table 4: EAF share development for the VLEEM regions..................................................... 34Table 5: Literature review for specific energy consumption and potential potentials for

integrated and secondary steel production........................................................................... 34Table 6: Available and Potential Energy Efficiency Measures; adapted from Worrell et al.,1999....................................................................................................................................37Table 7: Outcome of literature review on current and future specific energy consumption forthe paper and pulp sector ....................................................................................................40Table 8: Available and Potential Energy Efficiency Technology and Measures; adapted fromMartin et al., 2000................................................................................................................ 43Table 9: Time series data needed for projections (level of activity) for the Iron & Steel andPaper & Pulp sectors........................................................................................................... 46Table 10: GDP growth (% p.a.) assumption for the VLEEM regions based on estimates fromIEA World Energy Outlook 2002, Energy Balance non-OECD.............................................. 47Table 11: Production of steel between industrialized and developing regions....................... 48Table 12: Comparison of projected world steel production values between VLEEM and other

outlooks ..............................................................................................................................49Table 13: Share of fossil fuel and electricity expressed as percentages of primary energy.Note: We assume this share to be constant for the timeframe. The share of electricityconsumption expressed in primary energy assumes a conversion efficiency of 32%. ........... 52Table 14: Comparison of projected paper production values (Mt) for the United Statesbetween VLEEM and other outlooks.................................................................................... 54Table 15: Production of paper between industrialized and developing regions ..................... 54Table 16: Share of fossil fuel and electricity expressed as percentages of primary energy forthe paper sector. ................................................................................................................. 57


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INDEX OF FIGURES

Figure 1: Per capita apparent steel consumption versus per capita income for selectedAfrican and Asian countries...................................................................................................6Figure 2: Schematics of specific energy consumption trend for TECHNOLOGY-BASED

scenario until the year 2100 for integrated steel production.................................................... 8Figure 3: Methodology for projecting the total amount of energy needed. Source: VLEEM. ... 9Figure 4: Processes for the Iron and Steel industry. Source [OECD and IEA, 2000] ............ 12Figure 5: Schematics of the processes for the paper and pulp industry. .............................. 15Figure 6: Apparent consumption per cap vs. GDP per cap for the representative countriesgrouped under the VLEEM regions and the adjusted empirical trend.................................... 21Figure 7: Ratio of net import over apparent consumption vs. time for industrialized regions(upper) and developing regions (lower) for the Iron & Steel industry. Positive sign showimporting trend compared to consumption and negative sign an exporting trend. ................. 23Figure 8: Ratio of net import over apparent consumption vs. GDP per capita for industrializedregions (right side of graph) and developing regions (left side of graph) for the Iron & Steelindustry. Positive sign show importing trend compared to consumption and negative sign anexporting trend. ................................................................................................................... 24

Figure 9: Apparent consumption per cap vs. GDP per cap for the VLEEM regions and theadjusted empirical trend for the Paper & Pulp Industry......................................................... 25Figure 10: Ratio of net import over apparent consumption vs. time for industrialized regions(upper) and developing regions (lower) for the Paper & Pulp industry. ................................. 27Figure 11: Ratio of net import over apparent consumption vs. GDP per capita forindustrialized regions (right side of graph) and developing regions (left side of graph) for thePaper & Pulp industry. Positive sign show importing trend compared to consumption andnegative sign an exporting trend.......................................................................................... 28Figure 12: General schematics of scrap flow into EAF and BOF routes. .............................. 32Figure 13: Resulting specific energy consumption (GJ/t) trends for developing andindustrialized regions for integrated and secondary steel routes based on the literature valuesfrom table 3 (also plotted)....................................................................................................35Figure 14: World share of newsprint, printing and writing paper and, other and paperboard for

the past 4 decades. .............................................................................................................40Figure 15: Fitted specific energy consumption trends for the three commodities forindustrialized regions, and reference values and potentials for the whole sector................... 41Figure 16: Fitted specific energy consumption trends for the three commodities fordeveloping regions, and reference values and potentials for the whole sector. ..................... 42Figure 17: Population growth bases on the IPCC SRES B2 scenario for the different VLEEMregions................................................................................................................................47Figure 18: Historical and projected world steel production for the TECHNOLOGY-BASEDScenario for the various VLEEM regions.............................................................................. 48Figure 19: Weighted apparent consumption per capita for the different VLEEM regions. ..... 49Figure 20: Comparing EAF development between VLEEM (left) and IPTS (right)................ 50Figure 21: Primary Energy Consumption for steel under the TECHNOLOGY-BASEDScenario for the various VLEEM regions.............................................................................. 50Figure 22: Consideration of the efficiency and structural change on world total primary energydemand in the steel sector................................................................................................... 51Figure 23: Energy projection of total primary energy and fuel share (PJ) for the Iron & Steelsector for the timeframe....................................................................................................... 52Figure 24: Historical and projected world paper production for the TECHNOLOGY-BASED(BAU) Scenario for the various VLEEM regions. ..................................................................53Figure 25: Historical and projected weighted apparent consumption of paper per capita forthe different VLEEM regions................................................................................................55Figure 26: Primary Energy Consumption for paper under the Technology-based Scenario forthe various VLEEM regions. ................................................................................................55Figure 27: Efficiency influence on world total primary energy demand in the paper and pulpsector..................................................................................................................................56Figure 28: Energy projection of total primary energy and fuel share (PJ) for the paper sector

for the timeframe. ................................................................................................................ 57


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Acknowledgement

A journey called masters program that started in Stockholm (Sweden) hasfinally ended in Utrecht (the Netherlands). During the nine months Sustainable

Energy Engineering program in Sweden and the six months thesis project inthe Netherlands there are many people that I would like to thank in makingthis academic-professional evolution be more than that.

I want to thank my advisors at Utrecht University Dr. Martin Patel and Dirk-JanTreffers for providing me not only with an interesting project that has taughtme new things in the area of sustainable development and energy, butespecially for taking care of my arrival, transition and stay at a new city andworkplace. Also, great thanks to my advisor at KTH Dr. Andrew Martin for hissupport and guidance in my interest of wanting to do my thesis abroad. Myimmense appreciation goes to two doctoral students at Utrecht, Andrea and

Tao for their concern in how my thesis and Utrecht-adaptation weredeveloping.

The best possible location to work on the thesis was room B225, where I hadthe incredible pleasure of meeting Milo, Tibout, Froukje, Erika, Bothwell andArancha (from room B229, but oh well!). They literally took the 6-people-in-15m2-room to a whole different level. Making the room a comfortable place towork and relax (under my musical dictatorship). I was definitely lucky to getthe finest crowd; always there for doubts, coffee breaks (krentenbollen),insightful topics of conversation, and sharing the life (windsurfing andpartying). Still, mostly thankful for their thoughtful birthday present wooden

shoes.

There are also people, whom although not directly involved in my thesisproject (or Utrecht time) were an important part in providing encouragementand a balanced work-play life in this journey. First, my former colleagues atKTH (too short space to thank and name all) by sharing from different viewsthe same goal (viva the bureaucratic meetings!). My flatmates and friendsRaul and Marianne for their beyond human hospitality and unconditionalsupport. Lastly, my international gang in Utrecht: Sana (Slovenia), Fernando(Spain), Lorenzo (Italy), April (Indonesia), Elena (Italy) and Elsa (France)making every event count, we are still the hardcore.

Finally, this journey would not have been possible without my home base. Myfamily, in special my mother, whom regardless of distance were backing-upmy every move, and my Brummelkamp girls (Tessa and Miriam), being themthe final motive I chose Utrecht as the ultimate destination.


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1 INTRODUCTION

1.1 Definition of Problem

Sustainable development, greenhouse gas emissions and energysupply/demand have developed into fervent issues in the past decades atinternational and regional levels involving various actors from policymakers toscientists. These actors have addressed their concerns through studies andreports [Meadows et al., 1972; Brundtland, 1987; IPCC Third AssessmentReport, 2001], public awareness, policy and international agreements (earthsummits in Stockholm, Rio and Johannesburg), and presentedimplementation tools such as Joint Implementation (JI), Clean Development

Mechanism (CDM) and Emission Trading (ET) among others as rectifiers totheir concerns.

The last century, seen after the industrial revolution, was marked by a strongrelation between energy and resources consumption and the improvement ofsocial and living conditions as seen in Europe, North America and variousAsian countries. If other regions are to achieve similar social and livingconditions, an increase in energy and resources will occur, therefore raisingmore concerns about the human pressure on natural resources use and theenvironment.

The industry sector was estimated to consume about 32% of the worlds totalenergy consumption in 2000 [OECD, 2003]. This energy consumption, withinthe sector, has been increasing yearly. Given that CO2 is the largestcontributor to GHG emissions (practically exclusively caused by energy use)and the current industry dependency on fossil fuel, there is a wide panoramaof possible development pathways in the industry sector for the next decades.Energy projections reflect the influence of these developments.

Due to the global concerns and the role played by the industry, there is theinterest of estimating what these future energy demands could be, and howthey could be minimized in the various industrial sectors while still meeting the

demand required. The outcome can provide insight on what could happen ifcertain paths are taken.

This interest in becoming more efficient is driven by factors such asgovernmental policies, economical aspects (e.g. fuel costs), andenvironmental and social corporate responsibility along with the technologicaldevelopment and implementation to accomplish it.

While dealing with future energy projections, it must be borne in mind that theresults obtained are not to be taken as predictions of what is going to occur,but as possible outcomes in the sector and respective implications of these interms of energy consumption.


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As a contribution to this issue, the aim of this thesis is to develop and discusspossible energy consumption scenarios in the industry as an extension of theVLEEM Model [VLEEM, 2002]. This extension will address important issuesbased on energy use for material consumption for the iron and steel, andpaper and pulp industries.

The insights provided by this report may also contribute to a betterunderstanding of the implications of a) international agreements on GHGemissions, b) policy tools creation that lead to meeting international andregional energy efficiency goals and, c) improve benchmarking in energyperformance at international level [de Jong, 1998].

1.2 Overview

The VLEEM model, which is being developed in a project funded by theEuropean Commission [EC, 1998], is a long-term energy and environmentmodel, that makes projections for energy demand over the next century (untilthe year 2100). The VLEEM project has been conceptualized and formalizedin order to serve the objective of the RTD activity as specified in the keyaction of the Energy sub-programme: of formalizing the process of emergenceand dissemination of clean and renewable energy technologies subject toresearch and development in relation to the long-term evolution of the socio-economic context in the European Union.

The results expected for the VLEEM model are projected levels of energy useand CO2 emissions (up to the year 2100), based on technological changes,geographical specific patterns and new requirements in the Industrial sectorwhile addressing important issues that affect this consumption.

The purpose of VLEEM is threefold, the consolidation of the skeleton-formenergy-environment model, second to address issues related to EC energy-environment RTD strategies, and third to disseminate VLEEM conceptual,methodological and factual results to the scientific community.

There are three major ways through which VLEEM is expected to contribute

to the progress of knowledge [VLEEM, 2002]:

- first, it continues to bring new ideas, new concepts, new analyticalschemes to address very long term issues, which is a pre-requisitefor establishing any strategy towards sustainability;

- second, it proposes an integrated multidisciplinary framework inwhich various thematic research works can be integrated andinteractions among them are assessed: for example, research ontime, research on demographics and research on long termeconomic growth; such an integration might result in enhancementof each particular field of research as energy projections;

- third, it provides a quantitative tool for simulation, which is likely toconstitute laboratory equipment" for further research works on


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energy-environment policy, socio-economics and technologicaldevelopment.

1.3 Objectives

The main objective of this thesis is to create projections of energyconsumption patterns for the Iron & Steel and Paper & Pulp industries in theindustry sector based on their potential technological improvements and toassess their influence as a driver of energy use of the sector.

The projections are done for the 10 VLEEM regions representing the world:North America, Latin America, Former USSR, North Africa and Middle East,South Asia, China, Asia Pacific OECD, Other Asia Pacific, Africa Sub-Sahara,and EU-25.

The main objective can de disaggregated into: Analyze developments of production and energy use across the world

regions for the Iron & Steel and Paper & Pulp sectors. Discuss the underlying drivers that influence the energy use. Prepare projections of material and energy use over the next century,

based on the insight gained and additional investigation on potentialfuture technologies.

Compare the methodology and results against other studies.

Chapter 2 of the report describes the methodology and indicators usedthroughout the report; a description of the two sectors analyzed is presentedin chapter 3. Chapter 4 and 5 deal with specifics of level of activity and theenergy use indicator, data collection and assumptions for the sectors,followed by the projections for production and energy use in chapter 6.Chapter 7 discusses the limitations of the followed methodology and howother studies are compared followed by the conclusion in chapter 8.


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2 METHODOLOGY

2.1 General Methodology

For the industries analyzed there are three main factors affecting energyconsumption [Kim and Worrell, 2002]: production level, production structureand specific energy consumption (SEC). As shown in equation 1, thuschanges in each of these factors result in a change of energy.

Equation 1: Physical Sector factor analysis

Ai: Physical activity in sector i

Si,j: Physical activity in sub sector jEi.j: Energy consumption belonging to Si,j

Throughout the report these factors are represented by two indicators: a)activity indicator (production level and production structure), and b) energyindicator (SEC). Although implicitly covered in equation 1, Schumacher[1999], Ruth and Amato [2002] mention other factors that influence the energyuse in the industries:

Geographical specific (population and GDP growth)

Technological changes (efficiency improvement, development andimplementation) Consumption behavior (activity, regional and country specifics) Production (level & structural)

As indicated, for analyzing the future energy system two indicators areneeded. An indication is needed firstly for the level of activity of materialconsumption, based on historical analyses on the relation of per capitamaterial consumption related to per capita income; this level of activityconsumption will be translated into production. Secondly for the level ofenergy use in the various sectors which denote the specific energy (GJ/tonne)

based on literature studies on energy efficiency potentials. This specificenergy is generally defined as the amount of energy needed to produce a

=j ji

ji

i

ji

iS

E

A

S

A EnergyTotal,

,,

Structure of sectorEnergy consumption at subsectoral level


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tonne of product. With these two indicators, an indication for the final demandof energy can be obtained.

The above indicators are considered physical indicators as both the level ofactivity and the specific energy consumption are expressed in a physical

units, kg and GJ per tonne product respectively. Another way of describing iswith economic indicators, which are expressed in terms of economic value (kgor GJ per US$ economic output or US$ for energy per US$ economic output).

The physical indicators have been chosen as it has been noted that the use ofthese indicators reflects better the tendencies of the industry by capturingchanges in activity, structure and energy intensity [Farla et al., 2001;Phylipsen, 2000]. One of its main benefits in country comparison is that ittakes into account efficiencies, intra-sectoral structure differences (differentprocesses/routes within the sector) and developments [Worrell et al., 1997b].A limitation of this type of indicator is the problem regarding availability and

quality of energy and production data [Farla and Blok, 2001] and cannot beeasily added at higher levels of aggregation in which product variety increases[Phylipsen, 2000].

The following sections (2.1.1-2.1.3) describe the approach taken to project thedemand for materials and the attendant energy use.

2.1.1 Step 1: Activity level

In order to estimate the future demand for materials, a historic analysis of theproduction and consumption patterns for various materials is first made. Timeseries for apparent consumption in the past can be derived from productionand trade statistics according to the formula:

Apparent Consumption = Production + (Imports Exports)

Equation 2: Apparent consumption relation to production and trade.

In VLEEM we apply the hypothesis that the relationship between materialconsumption (in tonne) and wealth (GDP) is roughly the same acrosscountries, regions and time periods. In order to test this hypothesis theconsumption per capita is plotted as a function of the per capita GDP (figure1). A curve representing the best fit is then included in the graph.

For each of the VLEEM regions representative countries were selected to limitthe time and effort of data collection. The data collected is for the 1980-2000period. The list of representative countries for each region can be seen inappendix 1. The countries were selected based on their closeness to theaverage GDP per capita for the region.


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Figure 1: Per capita apparent steel consumption versus per capita income for selectedAfrican and Asian countries.

At this stage the fitted curve obtained was verified against each VLEEMregion for a final acceptance of the fit. The criterion followed to steps: 1) tocompare how offset the location of regional data is relative to the fitted line. Ifit lies close to the line (e.g. Tunisia in figure 1) the fit is considered adequate,and 2) the estimated apparent consumption for 2000 with the curve fit wascompared to the real value for the base year, if it did not present a drasticchange the fit was considered adequate.

In case an adequate match was not found (especially developing regions, e.g.China in figure 1) a new curve was fitted using the data for the respectiveregion and the North America data as an upper limit. This was done for all theVLEEM regions, taking into account the data for the representative countries.The final equations used for the apparent consumption model are provided inthe appendix 2.

Once the fitted curve is accepted and the assumption that no drastic changesin the relation between material consumption vs. wealth will occur in thefuture, the information available from this fitted curve can be combined with

forecasts for GDP and population to generate projections for the futureapparent consumption of materials. GDP and population values are availablefrom many sources [CIECIN, 2002; OECD, 2002].

In further explaining the material demand projection from figure 1 a two-stepped approach is taken: first, the specific material consumption per capita(y axis) is determined on the basis of future GDP per capita (x axis), since acommonly accepted form of comparing countries is through their wealth; andsecond, the specific material consumption per capita (y axis) is multiplied byprojected population (e.g. UNs low, moderate and high growth scenarios until2100) to calculate the material use in absolute terms (e.g. in million tonnes

per year).

y = 0.0029x1.2081

R2

= 0.8804

1

10

100

1000

0 5000 10000 15000 20000 25000

GDP per cap

App.Consump.percap(kgofcrudesteel)

Nigeria

South Africa

Tunisia

India

China

Australia

Japan

Indonesia


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For countries that nowadays have relatively low levels of material use thiscurve can be used directly for projections under the assumption thatdeveloping regions follow the development path of industrialized regions,while, for high-income countries, the fitted curve is projected.

2.1.2 Step 2: Specific energy use

As in Worrell et al. [1997b], we use physical indicators in activity for projectionof apparent consumption (kg), structural factors in terms process type, andspecific energy consumption (GJ/t).

Both the level of activity (e.g., the production volume of steel) and the specificenergy requirements (in GJ per tonne of steel) determine the future totalenergy use (in PJ). Having dealt with activity levels in the preceding sectionwe now turn to specific energy use. To project its future level, first aninventory is made of results from studies on energy efficiency potentials.

Energy efficiency can be implemented throughout all the industries processesin various places, thus reducing energy consumption and emissions. Theenergy efficiency potential technologies from the various studies can begenerally categorized in two levels: a) available energy saving techniques thatare either commercially available or in use at specific locations and, b)potential long-term energy saving techniques which are still at a developmentstage or in limited use.

The studies were classified in two time frames; before the year 2000,historical SEC studies, and until 2050, future energy potentials, were plottedfor industrialized and developing regions in order to account for thedifferences in efficiencies.

Since most of the studies reach until 2050 from this point, up to 2100, asimple projection method is applied to project the specific energy useassuming similar dynamics as until 2020/2030. In this report we have made atrend from historical and potential SEC and two assumptions: 1) SEC trendsfor industrialized and developing countries will converge to the same value by

2100, and 2) this value (in 2100) is the result of a 1/3 improvement thedifference between the corresponding future potential value for the year 2050and the thermodynamical minimum (see figure 2). Under our technologicalbased scenario the annual energy reduction rates are assumed to fall withinthe mentioned ranges. A best possible scenario is assumed to achieve a thirdof the remaining gap.


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0

5

10

15

20

25

30

35

1970

1980

1990

2000

2010

2020

2030

2040

2050

2060

2070

2080

2090

2100

primaryenergyrequirem

ents(GJp/tonne)

thermodynamic minimum

From 2050 to 2100:

- B: BAU = Autonomous: Bridges one third of the gap

- A': "Best possible": Bridges one third of remaining gap

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Figure 2: Schematics of specific energy consumption trend for TECHNOLOGY-BASEDscenario until the year 2100 for integrated steel production.

2.1.3 Step 3: Future energy use in absolute terms

By combining step 1 with step 2 we project the total amount of energyneeded. This is done for the selected representative countries under certaintechnological development and geographical assumptions for the variousindustries. Later, these will be regionalized to obtain an estimate for the

different VLEEM world regions.

2.2 Computation Implementation

The VLEEM model is a long-term energy and environmental model thatprovides scenario projections for energy demand and supply and its relatedenvironmental effects (i.e. CO2 emissions) over the next century (until year2100).

The overview of VLEEM, as presented in 1.2, can be seen in figure 3. Thisoverview includes the connection for calibration to the other parts of thegeneral model energy supply and information through elasticity indicators thatare done by other parts of the VLEEM consortium. This latter part is not withinthe scope of the present report, but the results obtained will be used.

On the top right, the overview shows the link of the output of energy andmaterials use (determined as discussed above) with an indicator on theinformation level of a society. This link is made by determining elasticities in acalibration step. This latter part is not within the scope of the present report,

but the results obtained will be used for this purpose. The computational


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implementation of the database for the sector extension and calculation arestored and performed in Excel sheet.

Figure 3: Methodology for projecting the total amount of energy needed. Source: VLEEM.

2.3 Other methodologies:

It is important to realize that this thesis follows a simple methodology thatcould be considered as technology-based, thus presenting some limitationsand differences when compared to other studies. Among the factors not beingmodeled, due to the complexity of the variables to take into account andtimeframe, ranges from specifics of primary resources (e.g. decline in iron oregrade, type of wood), economics (e.g. fuel prices), and policies among others,for the different regions. To account for these variables at VLEEM region leveland desired detail would require an enormous amount of data and time.

Several other studies have addressed and/or proposed alternativeapproaches to deal with such variables that could serve as base for a followup study, at different scale. Among these models are:

Substance Throughput Related to Economic Activity Model-STREAM[Mannaerts, 2000], a partial equilibrium model with three markets: newmaterials, materials and scrap. It describes material flows in primaryand/or secondary production and technologies that distinguish betweenlabour, capital, electricity, coal, gas, and raw materials or scrap as

input.


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IPTS Report [Hidalgo et al., 2003], describes a simulation model usedto investigate the evolution of iron and steel industry at both global andnational levels from 1997 to 2030, focusing on energy consumption,emissions, trade, technology dynamics and retrofitting options.

Vintage model for the US [Ruth, 2002] through a model that useseconometric forecasting techniques in combination with a partial-equilibrium approach establishes the demand, production, capitalinvestment, capacity levels, expansion and contraction of the sectorand their associated energy use and carbon emissions.

Gunn and Hannon [1983] devised a linear program in which the totalenergy used in the US economy to manufacture paper (objectivefunction) was minimized in terms of the recycling rate influence.

Jutila and Leivisk [1981] stress the importance of computer simulation

to assist in research programs and interaction of online simulators, andfor more efficient use of existing processes and the development ofnew ones. Integrating production, energy, materials to sales,administrative and maintenance sectors.

Nguyen and Chern [1979] present a model to evaluate importantenergy issues such as future energy demand, fuel substitution, andcogeneration in the US, where an econometric estimation is used forthe demand of the paper products.

Sharma et al. [1997] investigated the economic, social andenvironmental impact of international trade of waste paper for recyclingpurposes between industrialized and developing countries.

These have modeled the Iron & Steel and/or Paper & Pulp industry in terms ofmaterial flows, energy demand, including trade, prices, and raw materialsrelated to technological changes and economic variables mostly at a countrylevel. Where available, results from these studies are compared to theobtained under the VLEEM methodology. The discussion section will addresssome of the aforementioned limitations with the intention of providing insighton the most critical simplifications of this report.


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3 DESCRIPTION OF THE SECTORS

According to the OECDs energy balance [OECD, 2003], the industry sector

consumed approximately 32% of the worlds total energy consumption in2000.

Within the industry sector the iron and steel industry is the largest energyconsuming manufacturing sector in the world. In 2000, its global energyconsumption was estimated to be over 276000 Mtoe (Million ton oilequivalent), or 12-13% total annual industrial energy consumption showing anincrease close to 7% from 1990 [OECD, 2003].

The paper and pulp industry is also among the most energy intensivemanufacturing sectors in the world. In 2000, its global energy consumptionwas estimated to be over 123000 Mtoe, or 5-6% the industrial sectors totalenergy consumption an increase of close to 24% compared to 1990 [OECD,2003].

In the past decades reduction of the energy intensity in the Iron & Steel andPaper & Pulp industry has been achieved by technological developments invarious parts of the production chain. Therefore it is of interest to analyze howa continuous development and implementation of efficient technologiesaffects the energy intensity of the process and the final energy consumption.

In this chapter an overview of the studied sectors will be made describing themain processes involved, also a general picture of the current energy use.

3.1 Iron and Steel: Energy Use for Steelmaking

3.1.1 Overview of the iron and steel process

An overview of the process will be given with a brief explanation of the mainprocesses involved, detailed analysis of these processes are better explainedin the references provided.

Technological developments affect the energy intensity and emissions of theiron and steel industry, therefore it is important to describe the production ofiron and steel steps and later the current and potential energy savingtechnologies that could be applied at each step.

Currently, steel is mainly produced in two ways -from primary and secondaryproduction these mainly come from two routes, the integrated primary steeland scrap-based or minimills. Primary production involves the mineral and


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coal while the secondary process involves recycling scrap along with spongeiron and electricity. Broadly iron and steel production can be divided into 5steps:

1. treatment of raw material

2. iron making3. steel making4. casting, and5. rolling and finishing

Depending on the production route some of the steps are omitted thussubstantially reducing the energy intensity of the overall route: integrated(steps 1-5) and minimills (steps 3-5).

An overview of the iron and steel routes can be seen in figure 4. Although theblast furnace (BF) is the main process for iron making, smelt reduction (SR)

and direct reduction technologies (DRT) are alternative technologies for theprocess [OECD and IEA, 2000; Farla and Blok, 2001; Schumacher andSathaye, 1998].

Figure 4: Processes for the Iron and Steel industry. Source [OECD and IEA, 2000]


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3.1.1.1 Treatment of raw material

The main raw materials in the iron production process are coke, iron and

limestone. The process starts through a carbonization process where coke isproduced by heating coal in the absence of air. Some of the by-products ofthis process are separated and cleaned and later used as energy carriers inthe steel works. Iron ore is agglomerated in sinter plants or pellets plants.

3.1.1.2 Iron making

This is the most energy intensive step in the steelmaking process. Coke, oreand lime are fed alternately in the blast furnace. A hot compressed stream ofair, the blast, is blown from the bottom into the furnace. A gas is produced thatreduces the iron ore. Molten pig iron, rich in carbon, is tapped from the bottomand transferred in isolated vessels to the oxy-steel plant. The coke oven gas(by-product from previous step) is fed into the blast furnace and the energy inthe gas is used for the iron making.

Some of the new technologies in the iron making process currently beingused are DRI and smelting (COREX, where one plant exists), although not atlarge scale and their market penetration is small.

3.1.1.3 Steel making

Steelmaking is the reduction to below 1.9% in carbon content of the hot ironmetal. Here carbon and other impurities are removed by oxygen blowing.Usually part of the input into the oxy-steel plant is scrap or other iron-bearingmaterials. The characteristics and quality of the crude steel are adjusted in aseries of ladle refining processes. Integrated steel mills may use the OpenHearth Furnace (OHF) or the Basic Oxygen Furnace (BOF). Secondary steelis produced in an electric arc furnace (EAF); here scrap is melted and refined

using electrical energy.

3.1.1.4 Casting

The casting of steel can either be continuous or batch (ingot casting). In ingotcasting liquid steel is cast into ingots that are cooled, then reheated and rolledinto slabs, blooms or billets in the primary mill. In continuous casting thereheating step is eliminated because the molten steel is cast directly intoslabs or blooms while still hot, thus more efficient in terms of energy use.

Currently 86% of casting is continuous [IISI, 2002].


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3.1.1.5 Rolling and finishing

The cast steel is reheated, rolled and sent to a number of finishing operations.

These final operations depend largely on the type of steel that is produced.Slabs, strips, bars or plates are made by hot forming, where the heated steelis passed between two rollers until it reaches the desired thickness. Wires,tubes, sheets and strips are produced by cold forming, although more timeconsuming the products have better mechanical properties. After rolling iscompleted, the steel pieces are finished to prevent corrosion and improveproperties of the metal.

3.1.2 Current Energy Use

Knowing the general process for the production of iron and steel it becomesimportant to know what the energy use for each process is. The followingtable provides typical energy intensities of the key iron and steelmakingprocesses.

Table 1: Ranges of primary energy intensities of key iron and steelmaking processes(GJ/tonne steel); compiled by Price et al. 2002.

Process Ranges of primary energy intensity (GJ/tsteel)

Iron making Pig iron1, 2Smelt Reduction3DRI4, 5

12.7 18.613.0 18.010.9 16.9

Steelmaking OHF4, 6BOF1, 7Scrap+EAF1, 4,7DRI+EAF4

3.9 5.00.7 1.04.0 6.54.0 6.7

Casting Ingot Casting4, 7,8,9,10Continuous casting4, 7,8,9,10Thin slab casting3, 5

1.2 3.20.1 0.340.6 0.9

Rolling Hot rolling1, 10Cold rolling1, 10

2.3 5.41.6 2.8

Note: Ironmaking includes energy used for ore preparation and cokemaking. Ironmaking DRI and Steelmaking DRI+EAF assume 80% DRI and 20% scrap.Sources: 1Worrell et al., 1999; 2IISI 1996; 3Worrell and Moore, 1997a; 4WEC, 1995; 5IISI 1998; 6Kudrin, 1985;7

Energetics, 2000;

8

Brown et al., 1985;

9

Energetics, 1998;

10

Worrell et al., 1993.

The ranges on table 1 show the various levels depending on the technologiesused within each step of the process. It can be observed from the table thatvarious production routes show differences in energy intensity, as the BOFroute shows higher energy intensity due to iron reduction process whilst theEAF skips this stage.


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3.2 Paper and Pulp: Energy Use for papermaking

3.2.1 Overview of the Paper and Pulp process

As with the Iron & Steel sector, an overview of the process will be given with abrief explanation of the main processes involved, detailed analysis of theseprocess are better explained in the references provided. A view of the stepswithin the process will help foresee where the current and potential energysaving techniques could be applied.

Broadly paper production can be divided into 4 steps:1. raw material preparation2. pulping

3. pulp processing, and4. papermaking

An overview of this process is presented in figure 5 along with a description ofthe main processes [Martin et al, 2000; CEPI, 2001; de Jong, 1998].

Figure 5: Schematics of the processes for the paper and pulp industry.

3.2.1.1 Raw materials preparation

The preparation of raw materials takes place at the logging site, whereforestry, harvesting and sorting occurs. After the trees have been harvested,the logs are sorted and transported to the mills where the bark is treated.

Raw material preparation

Pulping

Pulp Processing

Papermaking

Forestry

Recovered paper

Bleaching

Stock preparation sheet formation finishing

Chemical recovery

paper drying

Mechanical Chemical

harvesting sorting


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Usually the energy consumption is not included in the pulp and paper industry[de Jong, 1998], but processes like debarking, chipping and conveying havebeen estimated to consume about 30.3 KWh/t raw material ]Martin et al.,2000].

3.2.1.2 Pulping

The main purpose of pulping is freeing the fibers from the lignin that binds thefibers together in wood. Within the pulping process the main processes are:

Mechanical: Is the oldest pulping process where pulp is produced by grindingwood into relatively short fibers. Its advantage is the higher yields thanchemical pulping and its drawback are the impurities that lead to weakerpaper (mainly newspaper and wood-containing paper). Among the

mechanical processes there are stone ground pulping, refiner pulping,thermomechanical pulping (wood particles softened by steam before enteringa pressurized refiner) and Chemi-thermomechanical pulp [Martin et al., 2000].

Chemical: The most used technique; in 2000 71% of all wood pulp in theworld was chemical pulp [FAOSTAT, 2003]. Compared to mechanical pulpingthe yield is lower but provides a stronger fiber of higher quality, thus highquality paper can be produced. The Kraft process is among the most common[Martin et al., 2000].

Pulp from recovered paper: Here the recovered paper is de-inked and re-

pulped before being used for papermaking. Recovered paper usesconsiderably less energy than wood-based pulp, therefore high energysavings can be achieved here. Recovered paper is being more competitive inall paper types due to new contaminant removal technology, with theexception of the highest quality grade since it needs longer fibers [Martin etal., 2000].

During the pulp processing the mixing of the virgin pulp with water is of greatimportance, obtaining a consistency of 1% dry substance in order to increaseflexibility and bonding power [de Jong, 1998].

3.2.1.3 Pulp Processing

Of the most important processes after pulping we have: a) bleaching which isdivided in various stages to remove the remaining lignin that is bonded to thepulp; diversity of bleaches for different types of paper make energyconsumption vary, b) chemical recovery (extraction and reuse of the pulpingchemicals) which is divided into black liquor concentration, energy recoveryand recaustization of the remaining liquor and, c) paper drying; necessary to

ship the pulp to the paper mill in case the pulp and paper mills are not locatedin the same place. It must be noted that this stage is highly energy intensive


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and essential to the papermaking process, therefore high savings can beachieved.

3.2.1.4 Papermaking

Consistency is an important parameter that reflects how much water has beentaken out. For the later processes in special paper pressing the consistency isusually 40-50%, where more consistency is wanted as it reduces the energyrequirement for drying. Thus pressing for a higher consistency is an importantoption in saving techniques.

The papermaking process is composed of stock preparation (blending pulpsand additive to form uniform and continuous slurry), sheet formation (paper is

formed by spraying a low consistency pulp onto a moving wire mesh thatallows water to drain away) and finishing (here pressing promotes furtherpaper bonding between fibers by removing more water. The end of theprocess involves the drying section where steam filled rollers dry the paperthrough evaporation. This section consumes the bulk of energy inpapermaking at 10GJ/t and 21 kWh/t paper [Martin et al., 2000].

3.2.2 Current Energy Use

Based on the previous process description it is of relevance to know theaverage energy use during each process, the following table provides suchtypical intensities.

Table 2: Ranges for primary energy intensities for papermaking. Compiled from de Jong,1998 and de Beer, 1999.

Type SECh (GJ/t)steam

SECe (GJ/t)electricity

SEC primary(GJ/t)

Raw material processingForestry and harvesting

Harvesting only1Harvesting only2

0.22

0.190.10

PulpingFiber preparation3Mechanical pulp4Chemical pulp4Other wood pulp4Secondary Fiber4

-2.110.0-3.00.4

0.085.32.56.01.4

0.1911.216.312.03.9

Pulp Processing5

BleachingDrying

0.853.38

0.530.4

2.253.38

PapermakingNewsprint4

Newsprint6Printing4

2.52.3-8.67.0

1.41.3-2.92.0

6.08.712.0


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Printing 6Sanitary4

Sanitary 6Packaging4

Packaging 6Other paper4

Other paper6

2.9-8.65.02.6-7.05.02.3-7.76.0

5.0-7.0

1.9-3.22.42.4-3.61.51.3-2.91.5

1.3-1.8

15.411.016.98.812.110.5

9.5Sources: 1Kaltschmitt and Reinhardt, 1997; 2NOH, 1992; 3Jaccard et al., 1996; 4Farla et al.,5Nilsson et al., 1995; 6de Beer et al., 1998. Note: Primary energy has been calculatedassuming all heat is generated at efficiency of 90% and electricity at 33% for de Beer and40% for rest of sources.

Table 2 shows the various ranges for energy consumption at the differentstages of the paper and pulp processes. About 75% of current pulping ischemical. Adding the highest SEC of the ranges the largest possible SEC isfor printing paper together with chemical pulping around 37 GJ/t; and for thelowest for newsprint around 27 GJ/t. If secondary fiber is used then the SECare even lower by about 12 GJ/t. This reflects how the final energyconsumption is very dependent on the pulping process and the paper product.


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4 PHYSICAL ACTIVITY INDICATORS

This chapter deals with the construction of the apparent consumption curves

based on historical data, and the assumptions made (i.e. consumption, trade,resources) for the projections for the iron and steel and paper and pulpsectors.

The level of activity for the sectors is described as a trend relating apparentconsumption per capita vs. GDP per capita. To construct such trend timeseries of historical data for the VLEEM regions are needed in terms ofpopulation, GDP, material production and trade of products. The data wasgathered from various sources as shown in table 3.

Table 3: Historical data needed to construct apparent consumption cap vs. GDP per capitatrend (level of activity) for the Iron & Steel and Paper & Pulp sectors.

Source InformationMacroeconomic Framework

VLEEMconsortium

GDP and population (1971-2000)

Iron & Steel Sector

IISI variousyears

Data of total crude steel production, type of process andapparent consumption was obtained from IISI StatisticalYear Book

UNCTADTrade Statistics

Trade data from the year 1982 for most countries. Thisinformation was used to calculate the apparent consumptionfor the several years and compare it with the report fromIISI.

UN IndustrialStatistics

The total production was compared against the UN Industrialstatistics to estimate level of reliability. This data wasavailable from the year 1970 for most countries.

U.S. HistoricalStatistics forMineral

Commodities

For the US data until 1990 (production, import, export andapparent consumption) was obtained from HistoricalStatistics for Mineral Commodities in the US.1

Paper & Pulp Sector

FAOSTATDatabase

Data of total paper products from 1970 until 2000 wasgathered.

At this stage the key physical indicator is the apparent consumption of theproduct (steel or paper, kg). In order to project material production per regionthe inclusion of trade (imports and exports) has to be included.

To accurately model trade a deep understanding of markets, resources,prices and other interests (governmental agreements, etc.) have to be

1http://minerals.usgs.gov/minerals/pubs/of01-006/ironandsteel.xls


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included. As trade follows a dynamic changing economic environment whereit is hard to quantitatively measure the effects and their impact on the globalsector certain restrictions and assumptions must be made.

Regarding the iron and steel sector, trade has been modeled in different

ways. Michaelis and Jackson [2000] keep the trade for the UK steel sectorconstant at 1994 levels in order to concentrate on the internal changes of theindustry, Ruth [2002] mentions the use of an econometric model for the USmarket demand and supply, Labson [1997] describes an econometric trademodel that simulates dynamics of regional production and consumption overthe short to medium term (4 years). For the paper and pulp industry trade isalso a complex systems, specially in regards to waste paper as westerncollection systems may have adverse effects due to lack of knowledge of localcircumstances, informal traditions, and ignoring market forces [Sharma et al.1997]. Given the found complexity in ways of modeling and the timeframe inwhich VLEEM operates, such detailed trade models have limited applicability.

In our case, trade is accounted in the following way: rather than keeping tradeas a fix material amount, the ratio between net import (imports minus exports)and apparent consumption (units of t/t) was kept constant at 2000 ratio. Thesign of the ratio expresses the importing or exporting tendency of the region,therefore added or subtracted to the apparent consumption to provide theprojected production (equation 3).

Equation 3: Projected production as a function of the projected apparent consumption andthe ratio trade-to-apparent consumption of the year 2000.

Trade was accounted in the same way for Iron & Steel and Paper & Pulp, adetailed explanation follows within each subchapter. As with all trade modeldrawbacks are unavoidable, under this consideration the assumption thatcurrent trade patterns for the regions will stay the same.

4.1 Iron and Steel: Production and Consumption

4.1.1 Historical data for iron and steel

As mentioned in the general methodology historical time series ofconsumption are needed for our projections, therefore the need that the databe as reliable and correct as possible. For the iron/steel statistics varioussources were used, the historical data was used and organized as presentedin table 3.

=

2000

2000

AppCon

NetimportAppConAppConP


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The main source use was obtained from the IISI reports to maintainconsistency within the way of reporting. Still, the chance for discrepancies toarise exists. This has been seen when cross checking some of the sources tosee what percentage of error might be encountered (e.g. IISI and UN datashow different values for the same country and the same year). A more

complete analysis of these types of discrepancies in the iron and steel data iscommented by Farla and Blok [2001]; it is good to note that their analysismight be applicable to other industries. Other references [Price et. al, 2002]make reference to reporting problems from countries institutions to higherinstitutions.

As explained in the methodology, this historical data was used to createrelation between material consumption vs. wealth that might occur on theassumption stated that regions tend to increase consumption with wealth untila balance is reached. The following figure shows the apparent consumptionfor the VLEEM regions.

1.00

10.00

100.00

1000.00

0 5000 10000 15000 20000 25000 30000 35000

GDP per cap (1995 US$, ppp)

LogApp.Comsumppercap(kg)

Latin America

Frmr USSR

North America

North Africa andMiddle East

South Asia

Africa Sub-Sahara

EU-25

Model

Figure 6: Apparent consumption per cap vs. GDP per cap for the representative countriesgrouped under the VLEEM regions and the adjusted empirical trend.

As expected, there is a tendency of increasing apparent consumption withwealth until a stabilization of this consumption occurs. Countries that show aclear apparent stabilization are the US, Canada, Japan, Australia, and variousEU countries. The trend that describes this tendency was selected using acurve fitting software CurveExpert v1.3 where the Modified Exponential

curve gave the best fitting under the expression:


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x

b

aey = Equation 4: Fitted curve for the apparent consumption trend, where a=634.28, b=-8585.44and correlation coefficient = 0.7575.

As explained in the methodology the fit obtained was verified against eachregion for acceptance. The equations used for each region are provided inappendix 2.

4.1.2 Projections

It must be noted that our approach is based on projections of observed trends

in the past, thus possibly do not account for increased material efficiencyimprovements [van Vuuren, 1999].

Adopting such apparent consumption development trend must take intoaccount several assumptions. Among these assumptions for the iron andsteel industry are:

Consumption: Demand for steel consumption slows down per capita value asthe wealth of the country per capita increases; this assumption is also seen inother studies (e.g. 425 kg/capita average for industrialized countries as of1995, [Price et al., 2001]).

Trade: Translating apparent consumption to production the net trade isassumed to be constant as a percentage of the apparent consumption (year2000 levels).

Figure 7 shows the historical net import to apparent consumption ratio versustime. In the last decades industrialized regions (figure 7a) tend to move intobeing importers and developing regions (figure 7b) into exporters2.

The ratio for North America was around 11.14% in 1971 and increased toaround 23.91% by 2000, similarly Asia Pacific OECD increased from -33.52%

to around -23.62% for the same years. In the case of Europe the ratio is aboutthe same for both years (-4.28% and -4.60%), but showing a strong exportingpeak in 1992 (-32%); when similar ratio is done for the totality of industrializedregions the ratio increases from around -3.9% to 0.44% in 1971 and 2000respectively. For developing regions with the exception of other Asia Pacificwhich shows the same ratio, the rest of the regions present a shift fromimporting to exporting in relation to the apparent consumption. Totaling thenet trade over apparent consumption for the developing regions it shows amovement from 28.78% to -1.81% in 1971 and 2000 respectively.

2 Data for former USSR after 1990s is not been included as it shows a drastic break fromhistorical tendency after its division in the early 90s, suggesting data problems.


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Based on this assumption North America will remain a net importer thus itssteel production will be lower than its consumption. Similar analyses areobserved for developing regions, where South America (mainly due to Brazil)have a higher production to meet the exporting assumption. Other regionssuch as Middle East and other Asia Pacific have a lower steel production. A

limitation is that current trade patterns for the regions will stay the same.

Figure 7: Ratio of net import over apparent consumption vs. time for industrialized regions(upper) and developing regions (lower) for the Iron & Steel industry. Positive sign showimporting trend compared to consumption and negative sign an exporting trend.

Regionaly, industrialized regions (North America, Europe and Asia OECD,figure 7a blue line) have mantained a general shift towards an importingtendency for the past decades; North America has increased its share of

imports (in relation to their apparent consumption), whereas Asia OECD showa shift from exporter to importers. In the case of Europe the past decades

-60.00%

-50.00%

-40.00%

-30.00%

-20.00%

-10.00%

0.00%

10.00%

20.00%

30.00%

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

time

ratio(nettrade/app.consump) North America

Asia Pcific OECD

Europe

IndustrializedRegions

-60.00%

-40.00%

-20.00%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

time

ratio(nettrade/app.consump)

Latin America All

China

South Asia

Former USSR

North Africa and Middle East

Other Asia Pacific

Africa Sub Sahara

Develping Regions


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shows a trend towards importing, but no change from the beginning of thetime series. This shows the need for longer time series to have a betterunderstanding of trade patterns.

For developing regions (figure 7b red line) a general opposite shift is

observed, where South America and Africa have a strong exporting positionrelative to their apparent consumption in the last decade.

Plotting the same ratio against GDP per capita in order to observe the relationbetween the wealth of the region and its trade behavior related to theirconsumption it is seen how at an early state regions are net importers (NorthAfrica & Middle East), as their wealth increases they become higher steelproducers (South America, China) tending towards a relative stabilizationrelated to their consumption (Europe & North America).

It must be noted that the products taken into account for trade are semi-

finished and finished products as reported by IISI (e.g. flat products, longproducts, tubes, etc.).

-80.00%

-60.00%

-40.00%

-20.00%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

0 5000 10000 15000 20000 25000 30000 35000

GDP cap

ratio(netimport/

app.consump)

Latin America All

North America

China

Asia Pcific OECD

South Asia

Former USSR

North Africa and Middle EastOther Asia Pacific

Africa Sub Sahara

Europe

Develping Regions

Industrialized Regions

Figure 8: Ratio of net import over apparent consumption vs. GDP per capita for industrializedregions (right side of graph) and developing regions (left side of graph) for the Iron & Steelindustry. Positive sign show importing trend compared to consumption and negative sign anexporting trend.

Simply put, our assumption implies a constant net import to apparentconsumption (horizontal line) for any change in their GDP per capita growth.

Resources: Material input availability, iron ore and scrap, for primary andsecondary routes is assumed no to be a limiting factor for future development.Based on reports the largest iron ore producers: Brazil [BDB, 2000], Australia

[Mbendi, 2003] where long-term projected supply is expected to come from


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[MPR, 2000], India [Schumacher 1998] and South Africa3 have the capacity toincrease and meet the demand for iron ore and it is assumed that steel scrapwill be available.

Political reforms: Reforms that have influenced this apparent consumption

trend are seen in China in its economic reforms and opening to the outsideworld [Ma et al. 2002] and Mexicos investment and expansion afterprivatization [Martin et al. 1999].

4.2 Paper and Pulp Sector: Production and Consumption

4.2.1 Historical data for paper and pulp

Historical time series of paper production and trade (final products) wherecollected from the FAOSTAT database4.

This historical data was used to create relation between material consumptionvs. wealth that might occur under the assumption stated in the methodology.The following figure shows the apparent consumption for the VLEEM regionsfor the paper and pulp industry.

1.00

10.00

100.00

1000.00

0 10000 20000 30000 40000

GDP cap

L

ogApp.Concap(kg) Latin America All

North America

China

Asia Pcific OECD

South Asia

Frmr USSR


Other Asia Pacific

Africa Sub Sahara

Europe

World trend

Figure 9: Apparent consumption per cap vs. GDP per cap for the VLEEM regions and theadjusted empirical trend for the Paper & Pulp Industry

3

AME Mineral Economics. Short term forecast and analysis.http://www.ame.com.au/guest/fe/main.htm (access 01.09.03)4 For more information on the FAO Statistical data and data sources refer to the database.


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As expected, there is a tendency of increasing apparent consumption withwealth. A faster rate is seen in the early stages (e.g. developing regions)followed by a slower rate as wealth per capita increases (e.g. industrializedregions). Regions that seem to be reaching this latter rate of increasedconsumption are North America, Europe and Asia OECD. The representative

trend that best fits this behavior was a combination between the power curveand the modified exponential curve (equation 4), as before the fit obtainedwas verified against each region for acceptance.

21000

21000

>

=

xxce

xbaxy

d

Equation 5: Fitted curve for the apparent consumption trend for paper and pulp, wherea=1.85e-04, b=1.39, c=538.18 and d=-20760.

4.2.2 Projections

As with the Iron & Steel our approach is based on projections of observedtrends in the past. Similarly, the assumptions made for the Paper & Pulpindustry are:

Consumption: Apparent consumption for paper tends to stabilize as the

wealth of the country per capita increases.Trade: The net trade is assumed to be constant as a percentage of theapparent consumption (year 2000 levels).

Figure 10 shows the historical net import to apparent consumption ratioversus time, for paper, where in the last decades industrialized regions (figure10a) have stayed generally constant in their trend with a recent tendencytowards exporting and developing regions (figure 10b) also relatively constantas being main importers5, only Other Asia Pacific region has shown a sharpmove towards exporting paper relative to their consumption.

Based on this assumption North America and Europe will remain a netexporter thus its paper production will be higher than its consumption, whileAsia OECD has shown a paper export trend in the past decade. Similaranalyses are observed from developing regions, where with the exception ofOther Asia Pacific and Africa Sub-Sahara the rest of the regions present arelatively constant ratio.

5 Data for former USSR after 1990s is not been included as it shows a drastic break fromhistorical tendency after its division in the early 90s, suggesting data problems.


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Figure 10: Ratio of net import over apparent consumption vs. time for industrialized regions(upper) and developing regions (lower) for the Paper & Pulp industry.

Regionaly, industrialized regions (North America, Europe and Asia OECD,figure 10a blue line) have mantained consitent exporting tendency, where theratio in 1971 is -3.55% and -6.10% in 2000. North America has kept this trendwith some fluctiations (in relation to their apparent consumption), Europe has

shown a stronger shift towards exporting ( -0.19% to 9.84%).

For developing regions (figure 10b red line), have maintained an importingtendency relative to their consumption where in 1971 this ratio was 30.49%and 18.19% in 2000. All the developing regions with the exception of OtherAsia Pacific are importers relative to their consumption.

Plotting the same ratio against GDP per capita shows an apparent balancebetween trade and consumption for industrialized regions with an exportingtendency. Developing regions dont present this relative stabilization, but haveremained within the same range with the exception of Other Asia Pacific.

-12.00%

-10.00%

-8.00%

-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

time

ratio(netimport/app.consump)

North America

Asia Pcific OECD

Europe


-20.00%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

ratio(netimport/app.consump)

Latin America All

China

South Asia

Former USSR


Other Asia Pacific

Africa Sub Sahara

Develping Regions


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-20.00%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

0 5000 10000 15000 20000 25000 30000 35000

time

ratio(netimport/app.co

nsump)

Latin America All

North America

China

Asia Pcific OECD

South Asia

North Africa and MiddleEastOther Asia Pacific

Africa Sub Sahara

Europe

Develping Regions


Figure 11: Ratio of net import over apparent consumption vs. GDP per capita forindustrialized regions (right side of graph) and developing regions (left side of graph) for thePaper & Pulp industry. Positive sign show importing trend compared to consumption andnegative sign an exporting trend.

Political: Environmental concerns is among the most important drivers oftechnological change, also the health and environmental impact of bleach hascreated some debate, which has driven the industry to search for chlorine-freeproducts as bleaching agents [Nilsson, 1996; Lundmark, 2003]. Collins [1994]examines the environmental importance on technology innovation seen in

cradle-to-grave analysis that award eco-label within the EU.

Also recycling might be pushed further by certain governments as it tends toreduce public cost of waste recollection and landfilling, in their study Sharmaet al. [1997] raised several policy issues at the international, national and locallevel that might provide a framework that facilitates the analysis of wastepaper in developing countries.

Through various governmental policies there seems to be potential forachievements; Ren [1998] summarizes the Clean Production (CP) initiativewhich has reduced pollution and brought a competitive advantage on themarket, Pilavachi [1996] discusses the role of the EU through its R&Dprogramme in supporting energy efficiency in the paper and pulp industry,providing insight into the projects that show the most benefit, and Price andThillainathan [1981] address the utilization of waste paper in their policysimulation experiments.

Resources: This report doesnt go into detail with respect to the raw material,for example the type of wood hardwood or softwood which could result inhigher yield or greater strength respectively [de Jong, 1999]. New fast-growing woods, as Eucalyptus, are particularly attractive for cloning use,

which can be harvested after seven years and providing high quality pulp witha higher yield [Collins, 1994]. Neither can we forecast resource depletion, as


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Indonesias case their tropical forests are being lost at a rate of 3.8m hectaresa year. At this rate almost all its forest might be lost in a decade or two.Currently it estimated that 80% of logging is done illegally.6 Conditions suchas this one are out of the scope of this thesis.

6 Article on WBCSD www.wbcsd.org. Jakarta promises to tackle loggers, but admitscorruption will impede progress. (Accessed on 11-13-03).


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5 SPECIFIC ENERGY INDICATOR

This chapter deals with the energy potentials used and technologies involved

in the projection of energy demand for both sectors. As in the case of the levelof activity, the level of specific energy use is described as a trend relating thespecific energy consumption (SEC) in GJ/t vs. time. First, the creation of thespecific energy consumption curves is explained for various processes withinthe sectors (e.g. EAF for iron and steel, and newsprint for paper and pulp),along with the assumptions made. Second, categorization of possible energyefficient technologies and measures with the potential of achieving the SECreported are presented and commented.

For Iron & Steel and Paper & Pulp different studies on available technologies,best practices and potentials of technologies within regions have estimatedvarious levels of specific energy consumption that could be achieved in thelong-term. Based on these potentials (SEC, GJ/tonne, for the processes) afuture technological development trend is created. To construct such trendhistorical and potential values are collected from various studies are plotteduntil the year 2050, thereafter the procedure described in the methodology isfollowed.

Some studies have warned about the inclination to estimate future potentialsbased on past technological advances as the results could be too optimistic,stating that future developments in some processes cannot simply be

extrapolated [Daniel and Moll, 1998]. Some of the reasons for this standinclude: getting to the limit of technological improvements (theoreticalminimum efficiency) and the rate of current and future changes (in %p.a.)cannot be as high a

energy consumption scenario in the industry sector: sector extension and analysis related to the...

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