Steel supply chain innovations deliver green benefits

Steel supply chain innovations deliver green benefits

A better integrated supply chain and consumption-based accounting would enable more efficient use of steel and less waste, so helping reduce the industry’s environmental footprint.

The steel sector needs to think about how it can provide the same services with less steel, Julian Allwood from Cambridge University told the 2nd annual SBB Green Steel Strategies conference in April 2011. The steel industry is nearing the limits of energy-efficiency improvements and recycling because it is already doing both very well, he said, estimating that in the UK a further 10% efficiency improvement is possible at best. Meanwhile, laws to limit landfill mean nearly a third of steel is already recycled.

There are few process innovations with the potential to cut the sector’s CO2 emissions dramatically. Only carbon capture and storage offers real hope – a report in 2010 by CE Delft suggested the sector could reduce its greenhouse gas emissions by up to 80% by 2050 with this technology – but it remains in a pre-commercial phase.

Nevertheless there is an opportunity for the steel sector to innovate and use less steel –reducing carbon emissions as well as virgin raw material use – by co-operating more closely with downstream operators such as car manufacturers and construction firms.

The Wellmet 2050 project is exploring five options for steel and aluminium: designing products with less metal, reducing waste, reusing components, diverting waste to other uses and extending product life.

Most products, such as food cans, could be designed with 30% less metal and still perform the same function, the project finds. The amount of steel wasted could be reduced, as around a quarter of cast iron ends up as scrap. There are no technical barriers to reusing steel sections in construction and the economic case is not bad either. To extend product life, buildings could be made with a solid steel core and renovations only of add-on components such as windows.

The challenge for policymakers is how to motivate improvements – the EU’s emission trading scheme for example is a production-based system that would not attribute downstream carbon cuts to the steel sector.

It requires a shift to consumption-based accounting, which Sonia Thimmiah from Accenture told the SBB conference is gaining ground. But many developed countries are reluctant to pursue this because for most resources it means they would be responsible for a much higher share of use and associated pollution.

Nonetheless, companies are identifying opportunities and may well set the pace. Finnish metals firm Ruukki has developed a container whose lifetime CO2 savings are 30-fold that emitted during production for example – its very low weight also makes this very attractive to customers.

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