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Steel's CO2 Balance 2The Steel Industry's Contribution to Climate Protection

P t d b G h d E dPresented by Gerhard Endemann, Head of Business Area Politics / Senior Manager Environmental Affairs

Wirtschaftsvereinigung Stahl / Steel Institute VDEh

Aims M th d lMethodology Overview of case studies Results Summary

1 1 | 7.5.2010 · Gerhard Endemann · © Steel institute VDEh | WV Stahl

Aims


Aims

• Analysis of the impact of the steel industry on the CO2 emissions in Germany from an overall perspectiveGermany from an overall perspective

• By means of an extensive CO2 balance

• Use of selected case studies in the sectors energy generation• Use of selected case studies in the sectors energy generation, traffic, households, and small consumers

• Find out where innovations in the material steel and its use in i ti li t f i dl li ti h CO d iinnovative, climate-friendly applications can have a CO2-reducing effect

• Pre-conditions: - Time frame until 2020 - No comparison to other materials - Low vulnerability

N l i li t f t di


- Non closing list of case studies

Methodology


Focus and methodology of the CO2 balance for steel

Emission and time focus


Geographic focus

Geographic focus

Case studies and overall view

Case studies and overall view CO2 balance CO2 balance

Other GHG not examined

1,216

940

722

• > 95% of emissions of the steel industry are CO2

• Base year 2007 • Projection to 2020

1990 2007 20201

j 0 0

Exclusive examination of CO2 emissions for

2007 and 20201


1. 1990 as reference year for report Note: GHG = greenhouse gases; mat. = materials Source: BCG




Geographic focus

Geographic focus




1,216

940

722



• Delineation of emissions of the steel industry and applications

1990 2007 20201

j 0 0


2007 and 20201

y pp

Focus on Germany






Geographic focus

Geographic focus




1,216

940

722

Filter criteria Geography

&




• Geography • Change compared with

base year • Material substitution/

competition • Absolute potential • No "overall projection"

1990 2007 20201

j 0 0


2007 and 20201

y pp

Focus on Germany

p j

Eight case studies and overlap-free summation

to annual effect 2020






Geographic focus

Geographic focus




Other materials

Only

A

B

Expenditure Reduction CO2 emissions 1,216

940

722

Filter criteria Geography

Only steel

Only steel

Raw mat.

B

C

D

&




• Geography • Change compared with

base year • Material substitution/

competition • Absolute potential • No "overall projection"

• Imputation of steel share in reduction potential

• Imputation of all required expenditures

Other mat. C

1990 2007 20201

j 0 0


2007 and 20201

y pp

Focus on Germany

p j

Eight case studies and overlap-free summation

to annual effect 2020

p

Consistent net balancing of CO2 reduction

potential



Assessment of the CO2 balance on the basis of case studies across the product life cycle

Steel's CO2 balance analyzed … Steel's CO2 balance analyzed …

Other applications

Innovative applications

Mining

Pro- duction Pro-

cessing ≤ Case study

3

Case study

2

Case study

1

Case study

...

Industry carbon Eff t i thcarbon

footprint Effects in the

use of the products


Assessment of the CO2 balance on the basis of case studies across the product life cycle

Steel's CO2 balance analyzed … Steel's CO2 balance analyzed … … across total product life cycle … across total product life cycle

Raw material

Raw material produc-

tion

Pro-cessin

g Use Recyc

-ling tion

CO2 emissions in Mt + Other applications

Innovative applications

Quantification of eight

Mining

Pro- duction Pro-

cessing ≤ Case study

3

Case study

2

Case study

1

Case study

...

Industry carbon Eff t i th

Raw material

Steel production

Processing Use Recycling Total

case studiescarbon footprint

Effects in the use of the products


Overview of case studies


Case studies selected based on four-step filtering logic

• Inland water transport

• Tunnels

• Nuclear power plants

• Solar heat • Ocean and inland

t t t • CCS • ...

Initial list • Weight reduction

in cars • Wind power • Leaf springs

2

1

water transport• Pipelines • Bridges

• Structural steel

• ...

• Rail • Turbines in

air traffic

Eight case studies

• Leaf springs • Rubber-enforcing

steel structures for tires

• Motor systems • Assembled

camshafts

Geography

Change potent

compared w

ith 2

Substitutionm

aterials

Absolu

potent

34

• CCS • Reduction of

losses in the production of other products

• Pipelines St t l t l

Focus on Germany

Relevant change betw.

2007–2020 predicted

No comparative examination of

alternatives

Examination of case studies with more

than 1 Mt CO2 reduction potential

ial 2007

n of s ute tial

• Structural steel • ...

predicted reduction potential

F f t l d t t l d ti


Focus on use of steel products—steel production process not explicitly examined

CO2 reduction impact of steel in the energy sector

Case study Case study Influence and impact of steel on CO2 emissions Influence and impact of steel on CO2 emissions

1 Efficient fossil fuel PPs

• Steel innovations and innovations in central steel components increase the efficiency of power plants in dependence on the respective fuel types

• Impact primarily via increase in steam temperatures and pressures through improved power plants

• Increase of the wind power share avoids CO2 emissions from the combustion of f il f l ( d ti f th CO i i f th i )

indu

stry

3

2

Other

Wind power plants

• Increase of the renewable energy sources share avoids CO2 emissions from the combustion of fossil fuels (reduction of the average CO2 emission of the energy mix)

fossil fuels (reduction of the average CO2 emission of the energy mix)• Expansion of onshore wind power possible in capacity and capacity utilization

through repowering • Offshore wind parks with high potential until 2020

Ener

gy i 3

4

renewables

Efficient transform.

( g 2 gy )• Great potential in Germany, especially in biomass • Hydro (e.g., turbines), photovoltaic, and geothermal (e.g., pipes) limited

• Steel innovations increase the efficiency of transformers through special steels and reduce loss in power transmission and distribution

• Efficiency of a conventional distribution transformer lies at approx. 98% and is limited primarily by the physical properties of the steel core

5 Efficient e-motors

• Steel innovations increase the efficiency of electric motors through special steels and reduce conversion losses

• Efficiencies of electric motors lie between 50% and 95% in the relevant segments industry, household, and commerce/trade/services

• Special cores achieve a relative efficiency increase of 30–35%

limited primarily by the physical properties of the steel core• Grain-oriented steel cores lead to a relative efficiency increase of 35%


Special cores achieve a relative efficiency increase of 30 35%

CO2 reduction effect of steel in traffic and for households and small consumers

Case study Case study Influence and impact of steel on CO2 emissions Influence and impact of steel on CO2 emissions

• The weight of a vehicle has a significant impact on CO2 emissions • Weight reduction lowers the specific CO2 emission of the German car fleet • Innovations in the steel industry allow construction of much lighter vehicles • Modern, high-performance steels (e.g., manganese-boron alloys) allow further

substantial weight reductions

c

6 Weight reduction in cars

• Innovations in the steel industry allow construction of much lighter trucks • Weight reduction in trucks provides two levers

– Reduction of fuel consumption on limited-volume, empty, and partially loaded trips Reduction of required trips in case of full loads through higher additional load

Traf

fic

7 Weight reduction in trucks

• CHP units allow waste heat in power plants to be used as heat energy, fuel utilization in simultaneous generation of power and heat up to 90%

• Share of CHP in power and heat generation is planned to be doubled by 2020

– Reduction of required trips in case of full loads through higher additional load• Reduction of trips through higher additional load with stronger CO2 reduction effect

8Combined heat and

in trucks

nd S

C

• Growth area for the use of CHP units especially in local cogeneration units to generate local heat for residential areas, large buildings, swimming pools, or industrial parks (e.g., pipes)

8 heat and power

HH

an


Results


Innovative use of steel saves six times as much CO2 as is caused by the production of the steel

Case study Case study Emissions in the steel production3 Emissions in the steel production3

0.4

<0.1 Efficient fossil fuel PPs

Wind power plants Energy

1

2

0.7

0.1

0.03 Other renewables2

Efficient transformers Efficient e-motors

Energy industry 3

5

4

1.0

0.9

8.4 Weight reduction cars Weight reduction trucks Combined heat/power

Traffic

HH, ind., CTS1

6

7

8

Mt 9 11 10 1 0

CTS

∑~ 12 Mt


1. HH = households; CTS = commerce, trade, and service 2. Geothermal, biomass, hydro 3. CO2 expenditure for other materials not examined; values are rounded 4. Ratio relates exclusively to the emissions of steel production; values are rounded Source: BCG analysis


Case study Case study Net CO2 reduction potential Net CO2 reduction potential Emissions in the steel production3 Emissions in the steel production3

14.2

29.5

0.4



1

2

1.9

2.1

5.0

0.7

0.1

0.03 Other renewables2


Energy industry 3

5

4

9.2

1.0

11.2

1.0

0.9

8.4 Weight reduction cars Weight reduction trucks Combined heat/power

Traffic

HH, ind., CTS1

6

7

8

Mt 5 30 10 0

Mt 9 11 10 1 0

CTS

∑~ 74 Mt ∑~ 12 Mt




Case study Case study Net CO2 reduction potential Net CO2 reduction potential Emissions in the steel production3 Emissions in the steel production3

Ratio between CO2 reduction/emission4 Ratio between CO2

reduction/emission4

14.2

29.5

0.4



1

2

~ 400 : 1

32 : 1

1.9

2.1

5.0

0.7

0.1

0.03

14 : 1

Other renewables2


Energy industry 3

5

4

3 : 1

~ 200 : 1

9.2

1.0

11.2

1.0

0.9

8.4 1.3 : 1

1.1 : 1

Weight reduction cars Weight reduction trucks Combined heat/power

Traffic

HH, ind., CTS1

6

7

8 9 : 1

Mt 5 30 10 0

Mt 9 11 10 1 0

CTS

∑~ 74 Mt ∑~ 12 Mt 6 : 1



Annual CO2 reduction due to examined innovative steel products are higher than steel production emissions

CO2 emissions of steel products CO2 emissions of steel products

CO2 effects in Mt 67 Emissions of

total steel production in

Germany

-74

Germany

Emissions of the examined case studies

19 19 | 7.5.2010 · Gerhard Endemann · © Steel institute VDEh | WV Stahl Source: WV Stahl; BCG



CO2 effects in Mt 67

-74

Series

CO reductionsEmissions of


CO2 reductions of the examined

case studies

Emissions of steel production

in Germany





-74

Series

Balance ofCO reductionsEmissions of


Balance of CO2 reduction


case studies


in Germany



Results Results CO2 emissions of steel products CO2 emissions of steel products

• Steel production causes approx. 67 Mt CO2 emissions in Germany, thereof approx. 12 Mt for the examined applications


pp

• CO2 reduction potential of the eight examined case studies is approx. 74 Mt CO2

• Including recycling and i l i f th ff t f

-74

inclusion of the effects of raw materials extraction, positive CO2 balance of steel products

• Further steel products potentially with additional

Series

Balance ofCO reductionsEmissions of


reduction effects Balance of CO2 reduction


case studies


in Germany


Steel with positive CO2 balance across product life cycle

Source: WV Stahl; BCG

Government climate targets cannot be achieved without steel Steel contributes up to 33% to political CO2 reduction plans

1 036 -19%

CO2 emissions Germany (Mt CO2 p.a.) 1,036

841

-220

(Mt CO2 p.a.)

St l

Energy industry Traffic

~74

HH and SC

220 Steel contribution:

~33%

Industry processes

Manufacturing industry

2007 2020 National climate target1

1990


1. Decision of the German federal government to reduce greenhouse gas emissions by 40% until 2020 compared with 1990 levels Note: HH = households; SC = small consumers Source: UNFCC; IEA; German federal government; IPCC; BCG analysis

In over 80% of the case studies, realization is possible only with the use of steel

CO2 reduction targets CO2 reduction targets Segmentation of the case studies Segmentation of the case studies

1,036

841

-19% CO2 emissions in Germany (Mt CO2 p.a.)

17%

Application only possible with steel

Alternative materials also

possible

n of

ns

~74 Energy industry Traffic

-220 Steel contribution:

~ 33%

45%

17%

Opt

imiz

atio

nex

istin

g ap

plic

atio

n

HH and SC Manufacturing industry Industry processes

38%

New

ap

plic

atio

ns

1990 2007 2020 National

climate target1

∑ > 80%


1. Decision of the German federal government to reduce greenhouse gas emissions by 40% until 2020 compared with 1990 levels Note: HH = households; SC = small consumers Source: UNFCC; IEA; German federal government; IPCC; BCG analysis

Summary


Summary

• Annual reduction potential of ~ 74 mil t CO2 in 2020 by eight examples of steel applications onlyby eight examples of steel applications only

• Positive CO2 balance as reduction potential exceeds the total emissions of the German steel industry in 2007 (~ 67 mil t)

• Average ratio of savings compared with the emissions during production of the required steel is six to one for the selected cases

L t l f d i ffi i i i f il f l• Largest levers found in efficiency increase in fossil fuel power plants and an expansion of renewable energy sources

• About one-third of the remaining federal government's climate target can be achieved with steel alone

L t l L li t t ti


Less steel => Less climate protection

Climate Change – Steel is the best Choice Steel – driver of innovations to increase efficiency of resources


Stahlinstitut VDEh | Wirtschaftsvereinigung Stahl

Stahl-Zentrum 29 | 7.5.2010 · Gerhard Endemann · © Steel institute VDEh | WV Stahl

© G. Endemann 2009

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