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German Federal Ministry for Economic Affairs and Energy: The steel industry accounts for 30% of industrial greenhouse gas emissions

2021-07-22

Steel casting, a key German industry, has long been in crisis. A far-reaching shift toward climate-friendly production should boost the sector's growth. The German federal government and steel mills are accelerating the process, and the billions of euros in financial aid aren't just for the environment. According to the German Federal Ministry for Economic Affairs and Energy, the steel industry accounts for 30% of industrial greenhouse gas emissions and about 6% of Germany's total emissions. The German federal government and steel mills hope to accelerate the heavy industry's transition to climate-friendly production. German Economy Minister Peter Altmaier, after consultations with the Steel Association and the IG Metall trade union, stated that as an industrialized nation, Germany must and wants to maintain a strong steel-producing position. Hydrogen energy offers an opportunity to transform this fundamental industry. The German federal government is supporting hydrogen technology conversions worth up to €2 billion under the Important Projects of Common European Interest (IPCEI), part of an €8 billion fund launched to fund hydrogen projects. Projects from all major German steel mills will be considered. Minister A emphasized that by 2030, annual CO2 emissions will be reduced by nearly 11 million tons. The German government has also not ruled out the possibility of using quotas to purchase green steel. There are promising signs that, due to the accelerated pace of climate protection targets, the entire industrial sector—not just the automotive sector, but also other sectors—is interested in purchasing green steel. Regulating this within a market economy would significantly reduce the burden. Steel groups such as Thyssenkrupp, Salzgitter, and ArcelorMittal are among the largest producers of climate-damaging CO2 emissions. These companies claim they cannot undertake the multi-billion-dollar transformation alone. Hans Jurgen Kerkhoff, Chairman of the Steel Industry Association, called for further action, including a climate protection agreement and other tools such as a green indicator market, to enable the sustainable business model of green steel to develop in Germany. Furthermore, the competitiveness of conventional steel products must be maintained during the transition to climate neutrality. To this end, sufficient certificates must be freely issued in the EU emissions trading system. IG Metall Board Member Jurgen Kerner stated that the steel industry's climate-friendly transformation will not succeed without strong government support. The industry needs binding financial commitments to meet the scale of this historic challenge. The transformation would cost approximately €30 billion. Approximately €10 billion will be needed by 2030. The EU recently decided to extend steel safeguards for three years, from June 30, 2021, to June 30, 2024, to protect EU steelmakers from a potential surge in imports. (Source: Bureau of Foreign Trade, Ministry of Economic Affairs) Source: CSRONE (https://csrone.com/news/6967)

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