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Project Overview


Sustainability is a practice we live

Salzgitter AG is a leading pan-European steel and technology group. As part of the steel industry we are an important economic factor and supplier to many different sectors. It is in our basic interest to produce steel as efficiently as we can in terms of the resources we use. Consequently, we operate our integrated steelworks in Salzgitter on a virtually energy autonomous basis and close material loops to enable residual material and cogenerated products to be reused within the company or across sectors. This approach has enabled us to rigorously optimize production, which has steadily minimized wastages. We are meanwhile working very close to the limits of what science and technology permits, which puts us among the world’s most efficient producers of steel. 

Lowering CO2 with SALCOS®

Production in our Salzgitter steelworks generates around eight million tons of CO2 a year, made unavoidable by processes and by the current status of technical conditions and the facilities available. In order to lower our CO2 emissions beyond the current scope, we want to test out new approaches and research innovative process technologies. CO2 emissions could be massively reduced through a special production process. Under the project name of SALCOS®, researchers and experts in production within our Group are collaborating with the Fraunhofer Institutes and other partners in investigating new technologies and incorporating them into an integrated steelworks.

The framework conditions for SALCOS®

Our Group operates in a multi-faceted environment and is influenced by various different decisions and demands, including political framework conditions such as EU climate targets and the European Emissions Trading Scheme, the expectations of society, the needs of our employees and responsibility for the region. Another a decisive issue is the technical feasibility and the investigation on how the new facilities could be integrated into the existing steelworks. In addition, our concept needs to harmonize with our own ideas on sustainability and our profitability criteria, while guaranteeing our continued existence in the international competitive arena. Our ambition is to accommodate all these factors and work with SALCOS® on a long-term solution.

International competitive arena

In order for SALCOS® to finance the requisite technologies, we would need to raise the price of our end products considerably. As an international group operating on the global market, passing on increased costs to the product is, however, not possible as the price pressure is huge. In other countries, China for example, steel is becoming cheaper, but for this to happen it is being produced with higher emissions.

Economic efficiency criteria

In the MACOR feasibility study, our scientific team from Salzgitter Flachstahl and Salzgitter Mannesmann Forschung, together with the Fraunhofer Institutes, are investigating whether the plans for CO2 reduction in our steelworks are also robust enough to satisfy economic and financial requirements, along with technical and ecological ones. The feasibility of SALCOS® depends on how the levy under German Renewable Energies Act (EEG) develops, for instance.

European Emissions Trading Scheme

Companies within the European Union have to buy allowances for CO2 emissions that permit them to emit a certain volume of carbon dioxide. This paper is traded in Europe. In order to lower emissions in the future and to ramp up the pressure on industry, the availability of these allowances is to be drastically reduced as from the fourth trading period in 2021. Accordingly, the price of the allowances will rise from €5 per ton of CO2 today to potentially around €30. This enormous additional cost bulk only affects European companies and may cause them to lose their international competitiveness. For Salzgitter AG, this will mean a hole in the budget of 40% in the future, which corresponds to around 3.2 million tons of CO2.

Technical feasibility

Implementing our project directly is not technically possible. The SALCOS® team and the colleagues from the Fraunhofer Institute are working on a concept involving modification in stages. This concept provides for a transformation process lasting several years during which the blast furnaces will initially continue to operate and may then be possibly replaced in stages by direct reduction plants.

Possibilities for integration into the existing steelworks

One of the greatest technical challenges consists of integrating the new facilities into the existing steelworks. This is an undertaking that has not so far been implemented anywhere else in the world. Salzgitter may therefore be the first steel company to combine a direct reduction plant in stages into an integrated steelworks.

Responsibility for the region and for our employees

In SALCOS®, we have made a deliberate decision to create a scenario that could enable the facilities to be used in our integrated steelworks at the Salzgitter location. Relocating production to non-European countries in order to reduce requirements for CO2 allowances, so-called carbon leakage, runs counter to our idea of regional and global responsibility.

Own ideas about sustainability

We understand sustainability as a concept that embraces holistic responsibility. For this reason, we have opted to research a so-called carbon direct avoidance strategy through which CO2, so far generated by processes to reduce iron oxide in the blast furnace, is directly avoided. Under SALCOS®, we are working on a concept for this undertaking.

EU climate targets

The European Union makes a definitive contribution to global climate protection. To this end, it has already formulated numerous programs and rules and regulations designed to lower CO2 emissions, above all in an industrial environment. An important instrument for promoting this goal is emissions trading. Measured against the status of 1990, CO2 emissions in the EU are to be lowered by 20% by 2020, 40% by 2030 and 80% by 2050.

Functionality


Direct reduction

From a technological standpoint, there is a possibility of expanding the existing steelworks, in line with our endeavors to reduce emissions, and of integrating new facilities. Iron ore could initially be reduced to iron with the aid of natural gas and a higher volume of hydrogen in a direct reduction reactor. The reaction takes place at 950°, and sponge iron is produced. Based on this method, a reduction of iron of up to 85% can be achieved. Moreover, the facilities in question involve an integrated process. Gas is introduced in a circular pattern and, after separation of the water produced by the reduction, cleansed of any remaining CO2 and reused.
The challenge inherent in direct reduction consists of integrating the new facilities into the existing steelworks. Through the gradual implementation of a reactor of this kind, CO2 savings of initially up to 50% are theoretically possible. If, in the future, switching the entire production to a direct reduction plant is possible, this figure can be raised to up to 85%. 

Future opportunities of direct reduction

This undertaking cannot be directly implemented from a technical and financial standpoint. The SALCOS® team and the colleagues from the Fraunhofer Institute are working on a concept for a staged conversion. Current calculations show that CO2 emissions could even be more substantially reduced by 2050 than originally estimated by the politicians. Along with technological considerations, whether CO2-reduced steel production under SALCOS® is a promising project or just a desirable vision ultimately hinges on political framework conditions and economic efficiency criteria.


Adjacent projects


GrInHy as a component – “green” hydrogen for steel production

The integration of new facilities into the existing infrastructure is a challenge. This challenge involves not only the flexible use of hydrogen and natural gas and reduction agents in the direct reduction process but also flexible hydrogen production based on renewable energies. After all, CO2 savings within the process are voided if hydrogen, for instance, is produced on the basis of natural gas or electrolytically using the current electricity mix.

In order to potentially produce hydrogen ourselves in the future, Salzgitter AG has been cooperating in an EU research project together with Sunfire GmbH and other partners since March 2016: GrInHy (= Green Industrial Hydrogen via reversible high-temperature electrolysis). The facilities in Salzgitter also feature the world’s currently most powerful reversible high-temperature electrolyser.

The technology of high-temperature electrolysis enables the reversible operation of the trial facilities. While, during electrolysis operation with the highest electrical efficiency levels, the technology turns industrially generated steam from waste heat into hydrogen, in the reverse case of fuel cell operation, it produces electricity and heat from hydrogen or natural gas.

The electrolytically generated hydrogen can already be used today as a shield gas enabling annealing processes to be used for steel production and replaces fossil-based hydrogen. In the future, naturally with significantly larger capacities, use as a substitute for carbon for the direct reduction of iron oxide is feasible.

Along with the proof of electrical efficiencies of more than 80% (in terms of calorific value), the test operation of the techno-economic assessment of the technology also serves as proof in the context of competitive hydrogen production.

www.green-industrial-hydrogen.com


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