HIsarna, a Revolution in Steelmaking

June 21, 2013

CEPS Meeting, Brussels

Tim Peeters

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Paper & Steel : Common Ground?

•  CO2 intensive (1.1% vs 4% of man made CO2)

•  Energy intensive

•  High recycling rate (70% vs 95%)

•  Capital intensive

•  Major facilities > 20 years life span •  Large sites, large installations •  Threshold for implementation of breakthrough technologies

•  Trend of past 20 years

•  Process efficiency, labour productivity increase •  From Fragmented to Consolidated industry •  Changing competitive landscape in major markets •  Sustainability and Climate Change challenge

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The Challenge in Steelmaking

Growth Sustainability World steel consumption Ambition to cut CO2 emissions will double in 2050 by 50 % in 2050

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The International Approach

•  Climate Change is Global

•  Climate Change is Long Term

•  Support at board level, governmental level, EU level

•  Build industrial partnerships, bring people together

•  Use a broad range of expertise

•  Build a common language

The Brand:

Ultra Low CO2 Steelmaking

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The ULCOS project

Objective: 50% reduction in CO2 emissions per ton of

steel from iron ore based steel production by 2050

•  Globally the largest steel industry project on Climate Change mitigation

•  Core partners: ArcelorMittal, Tata Steel, ThyssenKrupp, Ilva, Voestalpine, LKAB, DillingerHütte/Saarstahl, SSAB, Rautaruukki

•  Co-partners: 48 Institutes, Universities, Engineering companies, etc

•  Budget: 75 M€ •  Duration ULCOS I: 2004 – 2010 ULCOS II: 2011 – 201…

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ULCOS Consortium: 48 partners

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Idea Experiment Pilot Demo Industry

CO2 and sustainability modelling

Selection Industrial Demo

ULCOS - I Project 2010 201.. 2004

Selection Criteria • CO2

• Economical • Technical maturity • Social acceptance • Other environmental aspects • Fit with existing configurations

Pilot plant

progress

ULCOS - II Project

Inventory of 200 process options

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Common approach, definitions, boundaries

Everything is assessed for one ton of Hot Rolled Coiled (HRC)

Classical Integrated Steel Mill

Gate to Gate approach for the

Focus area: Ironmaking is responsible for 85-90% of CO2 per HRC

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Selection Process: Funnelling the Options

CO2 and sustainability modelling

Selection

ULCOS - I Project 2010 201.. 2004 ULCOS - II Project

Top Gas Recycling Blast Furnace

Gas based reduction

Electrolysis of iron ore

HIsarna

4 processes selected

Inventory of 200 process options

Better use of Carbon in retro-fitted plants

Better use of Carbon in a new process

Replacing Carbon with Natural Gas or Hydrogen

Green power, mimic Aluminium production

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Top Three Hurdles to Manage

•  Technical

•  High intensity, high efficiency process development •  Focus on generic long-term solutions

•  Financial

•  High risk, high reward •  Partnering: sharing benefit + cost + effort + risk •  Industry contribution

+ local / national / European funding •  Organisational

•  Consortium •  People: availability, expertise, critical mass •  Communication •  Public relations •  Intellectual property

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Iron ore

coal

Steel Production Process Route Where does HIsarna fit?

Ironmaking Steelmaking

Casting Rolling & Coating Steel

products

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Iron ore

coal

coke

sinter

Liquid iron

Blast furnace

HIsarna technology Comparison with the Blast Furnace route

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Iron ore

coal

coke

sinter

Liquid iron

Blast furnace

Direct use of coal and ore

No coking and agglomeration

HIsarna technology Comparison with the Blast Furnace route

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HIsarna pilot plant

2004

2009 2010

2011 2012

2007

Campaign A

Campaign C in progress

Engineering

Concept development

Negotiations with ULCOS

Construction

Campaign B

2015

Preparations Industrial Demo

2013

7 Years of preparation before the first hot metal was produced

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Key Success Factors

•  Commitment from all levels

•  Financial support

•  Logistical, Engineering and R&D know-how on site

•  Cooperation

•  Perseverance

•  Fast cycle of learning and improving

Construction

September 2010

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Cold Commissioning, January 2011

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First Start-up, April 2011

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First HIsarna Hot Metal, May 2011

Production runner HIsarna pilot plant

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Campaigns A, B, C

•  Campaign A (April – June 2011)

•  The first metal was tapped on May 20, 2011 •  Process works as expected but the number of operating hours was below

expectation •  Many points for plant improvements were identified •  Improvements were implemented before the start of Campaign B

•  Campaign B (Oct – Dec 2012)

•  Confirmed process efficiency and product quality •  Name plate capacity of 8 t/h achieved •  Promising results with respect to energy efficiency

•  Campaign C (May – June 2013)

•  In progress

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•  With the ULCOS and HIsarna project the European steel industry is proactively approaching the Climate Change issue

•  In the HIsarna project knowledge and experience of steelmakers and equipment suppliers from all over Europe is brought together

•  HIsarna is a high risk/high reward innovation with the potential to have a strong environmental and economical impact on the steel industry

•  Environmental impact:

•  Without capture and storage: 20% CO2 reduction •  With capture and storage: 80% CO2 reduction •  Strong reduction of other emissions

•  Economical impact:

•  Wider range of raw materials •  Lower CapEx, OpEx

HIsarna Summary

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Challenges for HIsarna Future

•  Demonstrate robustness of technology

•  Further pilot plant campaigns: people, time, funding

•  Up-scaling to industrial size – “Valley of Death”

•  Transition from “generic” to “specific” (location, size, configuration) •  Investment 250 M€ (± 50 M€) •  Demonstration scale should have a competitive business case •  Governments can support this; mitigating the business risk •  Many potential innovations in ironmaking have not survived this step

•  Sustainable industry future, supported by National and European policies

•  Review the 2050 Roadmap (environmental, economical, social landscape) •  Develop business case for pushing out Blast Furnace technology

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What have we learned along the way?

•  Think big: Focus on breakthrough, not incremental

•  Partnerships, collaboration, trust

•  Set scope, targets, common definitions

•  Clear funnelling & selection process (ULCOS):

•  Generic, Long Term solutions •  Handle good ideas outside the scope

•  Don’t bet on one horse

•  When stakes get higher, stay connected with the business strategy

•  Innovation comes from people with expertise