Steel and the environment
People that are worried about climate change seem to wage a battle against companies that produce greenhouse gases. The largest producer of the greenhouse gas CO2 – in the country that I live in – seems to be a certain steel producer in the Northwest of the Netherlands. This company has had to deal with an ever increasing amount of rules and regulations over the past decades. Nevertheless, it is still producing steel, even against a profit, as far as I know. This is no small feat, regarding the state of the steel market – global overcapacity and steel from low wage countries being dumped in our region.
For several reasons, I believe this is a great company and we should cherish its presence in our country. Do not get me wrong here – I am not blind to the environmental impact this company has. Even more so, some of the people that live nearby are concerned about negative health effects. However, there are many others in the area that support this company being here. Let us not forget that about 35,000 people make their living by producing steel at this company, including its 9,000 employees, its subcontractors and suppliers.
Why produce steel locally?
Some people would rather see the whole site being closed. They seem to assume that here is no shortage of steel and we can get our steel somewhere else. Indeed, steel mills can be found all over the world, mainly in the vicinity of iron ore and/or coal availability, or a harbor where such bulky materials can be supplied from easily. So why not import our steel? Get the steel factory out of our back yard, and problem solved. Or can’t we just stop using steel?
As long as we want to use steel in our society, someone needs to produce it, and it is better produced by factories that are technically advanced and that maximize the circular flows, than the ones who do not care so much, or are not scrutinized by their environment. And steel is needed everywhere – look around you and you will see applications of steel, which are not substitutable by other materials, or only against very high costs, or suffering on durability. You need steel to build, to transport, to produce, to pack, to farm, and there are many more applications. Note that steel can be recycled quite well. Put a magnet on a pile of rubbish and the steel will be separated. After remelting, it can be processed as if it were newly produced.
The circular puzzle
The steel company in the Netherlands is relatively clean. Their planning puzzle for the ‘front-end’ is dominated by circular material flows. With the front-end, I mean the discharging of coal and ore, up to loading the blast furnace and the steel factory. This is also the part which environmentally is the most challenging. The planning puzzle has been modelled such, that almost everything that is produced as a by-product, is used again as much as possible. Again, I do not know of planning puzzles that are that circular by design.
In producing steel with blast furnaces, you roughly need two types of material: iron ore and coal. Very simply put, you set fire to the iron ore using the coal and the steel flows out. The iron ore is first processed into pellets. The coal is baked into cokes. But there is a third stream, which is called sinter. I have learned – with my simple view on things – that sinter is basically a produce from all the nasty stuff that you get as by-product anywhere in the process. Sinter looks a bit like solidified lava and it is loaded into the blast furnace in a carefully designed mix with the pellets and the cokes. So the sinter is actually a circular material flow into the blast furnace.
This is just one example, as there are many more circular flows – including the blast furnace gas which is used again for heating. There will be molecules in the process that will visit the blast furnace multiple times, as they exit the process for some reason, not being part of the main product, and they will be fired up again. The motivation of steel company to work like this goes beyond environmental ideals – there are high costs associated to dispose of materials that are not used anymore – especially with the volumes that are associated to the steelmaking process. This is not to say that environmental considerations do not play a role: some elements of the production process have purely been added or changed because of environmental reasons, such as the filters that are installed at the sinter production. Would the people that rather see the steel company shut down, ever wonder whether steel factories on other parts of the world are equally circular?
Should we depend on others?
But these people might argue, that in a densely populated country like the Netherlands, the direct environmental impact of a steel company is felt much stronger. Yes, there are examples of pollution that has affected the nearby environment. Still, the area is a popular place to live and the Wijk Aan Zee beach, which is a few hundred meters of the blast furnaces, is a busy and popular place to sunbathe and swim. The site area itself contains a richness of plants and animals, because it is only accessible to employees of the steel company.
And let us look at another reason to keep steel production local: steel production is seen by many countries as strategically important. Similarly to energy, countries should not want to depend solely on imports for their steel supply. Or should I say, countries that are not so naive to believe that the world is a nice and friendly place and will stay like that forever. We have seen nasty examples in the world recently, that made us rethink our sourcing strategy for strategic products.
There is a way to produce steel without producing the amount of greenhouse gases that we do today – use renewable hydrogen. It is a promising technology, but it will require huge changes. And with huge, I mean gigantic. The blast furnaces and part of the ‘front side’ of the steel company need to be dismantled and rebuilt. An enormous amount of (green) energy is needed to produce the required hydrogen. Remember that sites that currently produce steel with hydrogen are in a prototype phase and do not produce to the scale as our traditional steel plants. Even when adding up all planned Direct Reduced Iron (DRI) projects that are currently planned in Europe, this would only amount for a small fraction of the total current production. I am not saying we should not pursue this promising technology, but it will take decades before we reach the objective of (nearly) emission free steel production. And that steel will be more expensive than the steel produced with the traditional technology, so we will have to protect our market against ‘dirty’ steel and all products that contain it in significant amounts. In the meantime, let us accept the fact that we need steel and that we therefore should be grateful to have such a technologically advanced steel production site nearby, offering employment to thousands of people, and providing a superb example of circular planning.
This article was also published on LinkedIn.