Industry and globalisation

Environmental performance of the steel sector

 

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The world steel industry is being called on to play an important role in mitigating climate change, by reducing the CO2 emissions of its production, but also by contributing to the infrastructure of a low-carbon economy.


In the long run, reducing the industry’s emissions to be consistent with a low-carbon economy will require innovation and breakthrough technologies, in other words a shift away from current production methods towards completely new ways of making steel. In the shorter term, there is still significant scope for improving energy efficiency in existing production processes.

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1. Energy efficiency in steel

Energy efficiency can help address climate change challenges and, given the high share of energy costs in steel production, can also increase industrial productivity. While anecdotal evidence suggests “win-win” opportunities for companies that invest in energy efficiency (in terms of lowering their energy costs and having a positive environmental impact), many companies do not pursue such investments or do so at a seemingly slow pace. For example, the costs associated with energy efficiency projects as well as uncertainties in the market and policy environment have important effects on the incentive to invest in energy efficiency.

Steel – Energy Efficiency Policy database

The Steel – Energy Efficiency Policy database contains qualitative information on national policies for energy efficiency in the steel sector. It provides thematic and country-specific access to a broad range of information, including programme descriptions, typologies of policy instruments, target populations, estimated costs and benefits (where available) and links to official websites.

Data are currently available for 18 economies that have policies in place to improve energy efficiency in the steel sector. The information contained in this database is particularly relevant for policymakers as well as to analysts that may wish to assess how policy settings can affect energy efficiency outcomes.

The database has been developed in collaboration with Mr. Hannes Mac Nulty, external consultant, and the Institute for Industrial Productivity, and draws on information compiled by the International Energy Agency (IEA).

Energy Management Systems: A tool to improve energy efficiency in the steel sector

An energy management system is a systematic process for continuously improving energy performance and maximising savings. Energy management systems can save energy through low-cost operational improvements. A recent report released by the OECD overviews the benefits of energy management systems, explores barriers to their implementation, and how they can be supported and promoted by governments.

Read the full report: An Introduction to Energy Management Systems: Energy Savings and Increased Industrial Productivity for the Iron and Steel Sector

Energy efficiency in the steel sector: why it works well, but not always

Even though the benefits of energy efficiency are commonly accepted in the steel sector, many market, policy and organisational factors can discourage seemingly cost-effective energy efficiency investments. The OECD recently undertook a project to investigate the barriers to investment in energy efficiency, through a survey that was distributed to steel companies around the world, in collaboration with a number of major international and national steel associations. This survey was carried out from April to June 2015.

Read the full report: Energy efficiency in the steel sector: Why it works well, but not always

2. Greening Steel: Innovation for climate change mitigation in the steel sector

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Rapidly increasing environmental challenges require new approaches and production processes that help mitigate climate change and contribute to a more efficient use of resources. More investments in R&D, training, and other efforts will be needed in the future, particularly to develop breakthrough technologies for low-carbon steel production.

The world steel industry is an important CO2 emitter and is therefore being called on to play a major role in mitigating climate change, not only by reducing the CO2 emissions of its production processes but also by contributing to the infrastructure of a low-carbon economy. In the long run, significantly reducing the industry’s emissions will require a shift away from current production methods towards new methods of production. The industrial application of already existing technologies could contribute significantly to mitigating climate change. As an example, wider diffusion of the use of more energy-efficient production practices could significantly reduce CO2 emissions. In the longer term breakthrough technologies will be required to reduce the impacts still further. In particular, the adoption of Carbon Capture and Storage technologies would reduce CO2 emissions from the sector drastically.

For more information on Carbon Capture and Storage see the IEA page.

Data suggest that the direction of invention in steel-related technologies is turning towards climate change mitigation. However, a recent downward trend could be of concern given the environmental challenges ahead.

Additional information on trends in new environmentally friendly technologies in steel is available at the newly released Greening Steel: Innovation for climate change mitigation in the steel sector.

 

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