New legislation and emissions trading increase pressures
of finding new environmentally sound solutions in order
to tackle climate change. There are pressures also in steel
industry that causes some 6% - 7% of global CO2 emissions.
This research studies the reduction of CO gas, a
pre-form of CO2, formed in steel mills, by considering
the utilisation of the CO for producing chemical products.
This study conducts economic calculations on the impact
of a steel mill selling CO gas to be used as raw material
for chemical products by taking emissions costs, value of
CO gas, and electricity price into account.
The results of this study show that carbon dioxide
emissions caused by steel industry can be reduced by
selling CO gas, from blast furnace and basic oxygen furnace,
to chemical industry. As this CO gas is currently
utilised for producing energy, the replacement electricity
has to be bought from the markets. In order to meet the
environmental requirements, this electricity must originate
from sustainable sources.
The results prove the economic profitability of a transition
from in-house electricity production from CO gas
to selling it to a chemical producer. The financial benefits
of producing chemicals from carbon monoxide produced
by a steel mill, can be estimated by acknowledging
potential gains and tradeoffs. A steel mill would gain the
price obtained for sold CO gas, and the impact of emissions
trading costs. The tradeoffs would include a steel
mill having to replace the electricity, previously produced
from CO gas, by energy purchased from the markets.
This study calculated the economic impact of this
type of transition with different parameters and compared
to a true steel industry scale. With current price levels for
electricity, CO gas, and the impact of emissions trading,
a steel mill, producing a volume of 600 million Nm3
/a of
total pure CO, would benefit of some 50 million € annually,
if all of the CO gas would be sold for chemical
production. CO2 emissions trading roughly doubles the
economic incentives for such a transition.
This study provides a potential model for managers in
the steel industry for calculating alternative models for
operations by using their own exact case-specific figures.
This study supports combining economic facts with the
strive towards sustainability. This article gives a tangible
example on calculating CO2 emissions trading in economic
terms. The managers in the chemicals industry,
especially those considering new investments, may find
the proposed transition as a new opportunity to obtain
raw materials without extensive investments to production
capacity for CO gas.
The purpose of this article was to prove the viability of
transition towards sustainability both technically and
economically. However, this research did not cover the
case specific realities of every steel or chemical producer.
In addition, the CO quantities produced by steel industry
are so vast that a single solution does not solve the environmental
challenges of the entire sector. Also, the realities
of chemical producers were not looked upon, e.g.
market growth for chemicals and steel mill site locations
in relation to markets. The future research could include,
aside addressing the above described limitations, analysing
the detailed differences of BOF and BF gases from
the perspective of chemical production.