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Steel decarbonisation gathers speed

  • : Hydrogen, Metals
  • 22/02/07

The announcement within the last week of over 6mn t/yr of new direct-reduced iron (DRI) capacity and five new electric arc furnace (EAF) sites by the early 2030s suggests that conditions are becoming increasingly favourable for low-carbon steelmaking.

German steelmaker Salzgitter will fully move to hydrogen and renewable energy-based DRI-EAF steelmaking by 2033. It will award construction projects for industrial facilities by the end of this year.

ArcelorMittal announced further DRI and EAF capacity in France, including 2.5mn t/yr of DRI-EAF capacity at Dunkirk and an EAF unit at Fos-sur-mer to be fed by scrap, requiring a total investment of €1.7bn ($1.94bn). This brings the steelmaker's total DRI capacity plans for 2030 to roughly 10.8mn t/yr, including projects in Spain, Belgium, Germany and France.

Swedish steelmaker SSAB announced last week that it would do the same, bringing forward plans for almost 3mn t/y of EAF capacity at Lulea, Sweden, and Raahe, Finland, to 2030 from 2030-45.

ETS phase-out incentivises decarbonisation

The timing of steelmakers' decarbonisation plans suggests that EU policy on carbon costs is having the desired push effect towards greener steelmaking. While so far only pilot-scale hydrogen-based steel projects are operational, several industrial-scale projects are planned to come on line around 2026, when the ETS-CBAM transition begins, and over 30mn t is planned by 2033, after the phase-out is to be completed in 2030.

The phase-out of free allowances under the EU emissions trading system (ETS) and the introduction of a carbon border adjustment mechanism (CBAM) over 2026-30 in theory provides protection for low-carbon steelmaking in the EU, while removing the incentive for steelmakers to cut costs by continuing to use coal or gas as an energy source. And the threat of paying over €80/t in carbon costs is an important incentive for EU steelmakers to decarbonise. But European steel association Eurofer argues that the EU should continue to grant free emissions throughout the whole ETS-CBAM transition phase to mitigate the carbon costs that steelmakers will bear, alongside the considerable investment costs of reducing emissions by 30pc by 2030, estimated by Eurofer to be around €25bn. "The combined effect of the huge investment needed to decarbonise — and also [of] simply cutting emissions by cutting production, which is inevitable given the existing technology, plus skyrocketing energy prices and rising production costs will put enormous and unsustainable pressure on our members," Eurofer director of market analysis Alessandro Sciamarelli said. Eurofer estimates the cost to the industry in 2030 will be €14bn at today's emissions levels or €8.4bn presuming a 30pc emissions reduction.

Cross-sectoral relationships pivotal

The EU plans to have 6GW of renewable hydrogen electrolyser capacity by 2024, and 40GW by 2030, as well as 40GW of production available for import from outside the EU by 2030. But partnership with companies in upstream and downstream sectors have been determining factors for steelmakers assessing the viability of hydrogen-based DRI-EAF steelmaking.

Salzgitter and Danish energy provider Orsted aim to establish a circular supply chain, within which Salzgitter will supply renewably-produced steel, largely for use in the construction of wind farms, and Orsted will supply renewable (wind-generated) energy, as well as returning windmill parts to Salzgitter as low-CO2 scrap at the end of their life span. The company aims to increase the amount of scrap it uses by 50pc to 3mn t/yr by 2033. Salzgitter will also supply low-CO2 steel to all of carmaker BMW's European plants from 2026 onwards.

ArcelorMittal recently added to its investments in the renewable energy sector, committing $100mn to sustainable energy-focused investment fund Breakthrough Energy, and $5mn to Israel's H2Pro, a company that has developed E-TAC (Electrochemical — Thermally Activated Chemical) technology that splits water into hydrogen and oxygen in a process similar to electrolysis.

For SSAB, the abundance of hydroelectric and wind power in northern Sweden has played an important part in allowing the steelmaker to fully commit renewable-powered EAF production within the next eight years, as has its partnership with iron ore mining firm LKAB and energy provider Vattenfall.

Further progress by steelmakers in forming supply or offtake partnerships might encourage further decarbonisation commitments in the near future. German steelmaker Dillinger-SHS has an initial agreementwith engineering company Paul Wurth and steelmaker Liberty to develop a 2mn t/yr DRI plant including 1GW of hydrogen electrolysis capacity at Dunkirk. The steelmaker is also working with seven energy and engineering companies to develop a "hydrogen economy" in the German Saar region, the French Lorraine region, and the state of Luxembourg by producing 61,000 t/yr of hydrogen and investing €600mn in production facilities and transport infrastructure.

Green steel projects

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25/02/05

US DOE cancels H2 hub community meetings: Update

US DOE cancels H2 hub community meetings: Update

Updates with comment from California hydrogen hub Houston, 5 February (Argus) — The US Department of Energy (DOE) has canceled meetings between planned hydrogen hubs and the public, casting further uncertainty over how the multibillion-dollar ventures will proceed as the administration of President Donald Trump pauses clean energy initiatives. California's Alliance for Renewable Clean Hydrogen Energy Systems (Arches) has informed members of the hub's Community Benefits Workgroup that it was canceling a meeting scheduled for 13 February. "In accordance with the recent Department of Energy memo issued last week, mandating that we stop all community benefits-related work, we will be pausing our biweekly Hub-level Community Benefits calls as we work with DOE to evaluate how this guidance affects Arches' community engagement strategy moving forward," Arches said in an email seen by Argus . Arches is one of seven proposed regional hydrogen production hubs around the US that were designated by former president Joe Biden to receive billions of dollars in federal funding. A total of about $170mn was announced last year and in early January to be paid out as first tranches of government funding to the seven hubs to initiate planning and development activities. The status of those payments and future disbursements have been thrown into doubt since Trump ordered a pause on payments related to the Inflation Reduction Act, an executive decision that a judge then ordered temporarily halted . Arches continues to work during a temporary pause in community engagement meetings, Arches chief executive Angelina Galiteva said in an email to Argus . "We recognize that programmatic reviews are a standard part of administrative transitions and remain confident in the ongoing progress of Phase 1 activities," said Galiteva. Community organizers in the northeast that have protested the Mid-Atlantic Clean Hydrogen Hub (Mach2) were also notified that an upcoming webinar hosted by the DOE's Office of Clean Energy Demonstrations about Phase 1 funding awards have been canceled. "We are postponing this briefing until further notice," said an e-mail sent out to those who had registered for the 13 February briefing. By Jasmina Kelemen Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US met coal market mixed on China tariffs


25/02/05
25/02/05

US met coal market mixed on China tariffs

London, 5 February (Argus) — US coking coal market participants are still mulling their position since President Donald Trump reignited the country's trade standoff with China and Beijing retaliated on Saturday with substantial tariffs . Market sources said the retaliation will affect some coals more than others, but disagree on the severity of the risk. Many US producers ramped up exports to China in 2020 and 2021 following restrictions on Australian imports. But trade flows have slowed in the past two years largely because of lower-priced Russian and Mongolian met coal driving down Chinese price expectations and wider weakness in the seaborne coking coal prices making US sales to China less attractive. The Chinese tariffs announced yesterday apply to US coal and other energy products such as crude and LNG . Starting on 10 February, a 15pc levy will be added to the pre-existing 3pc tax on US coking coal imports for a total 18pc. The industry is cautious to draw conclusions as China returns from holiday and a diplomatic solution to the dispute is still deemed possible in light of the start date. But seller sentiment has generally been negative on the threat of further downward price pressures in a struggling market. "We are still hopeful that a trade war can be averted, or at least not last too long. Trump does a lot of talking as part of his negotiation style, but eventually, it is good for both countries to find a solution," one US producer said. Expectations are for some US exporters to turn to India as an alternative, but again they would face competition from Russian producers. Still, some in the market question how real an impact the measures could have, in particular citing the strong presence of Core Natural Resources' low-cost Bailey coal in the shipment volumes to China. Market estimates suggest that around 2mn-3mn t of Bailey coal was shipped to China last year, accounting for about 30-40pc of US exports to China. Consol, part of the newly merged Core, reported an average cash cost of $35.85/st for coal produced at its Pennsylvania mining complex, where Bailey originates, in the quarter ending 30 September last year. "I don't think it will be the consequence that everyone fears because the higher-quality US coals are already too expensive [in China]," one European trader said. "The Chinese are not looking to buy too much material." A common reason sellers give for not dealing with China is that many Chinese buyers contractually expect US sellers to take the risk of tariff hikes. The expectation is likely to deter even more producers now that risk is soon to be reality. "I can't imagine anyone in the US is going to be accepting that contract now," an Alabama-based supplier said. Not all downhill But there may still be some upward support ahead for US coking coal prices. US production has slowed over the past half year, first with a fire shutting the Allegheny Metallurgical Coal's Longview mine in West Virginia and more recently the fire at Core's Leer South mine resulting in a force majeure . Heavy snow fall in December and mine operators cutting additional shifts in a weak price environment has also curtailed output. In Europe, ongoing production issues at the coking coal mines operated by JSW in Poland may also add to a supply squeeze in the Atlantic. While Chinese tariffs may push down prices of US coal, stronger Chinese demand for Australian coal could potentially lend support to fob prices in Asia-Pacific too. How exactly US supply will be diverted from China in the event of a trade war and how this will affect prices is very much an open question. When China first imposed tariffs during its trade war with the US in July 2018, Argus ' high-volatie A fob Hampton Roads assessment rose by $22/t to its height in November. By the time the dispute was wrapping up in 2020, prices had sunk to near $60/t below pre-tariff levels. By Austin Barnes and Siew Hua Seah US coking coal exports since 2019 by partner '000t Partner 2019 2020 2021 2022 2023 2024 India 4,260 4,035 3,235 7,657 8,400 9,604 China 1,064 1,485 10,337 2,432 4,846 8,123 Brazil 6,707 6,182 5,100 5,353 6,271 6,297 Netherlands 4,628 3,116 3,041 4,960 4,068 4,609 Japan 6,011 3,291 2,950 3,617 4,594 3,858 Turkey 1,442 2,469 743 1,361 1,387 2,270 Germany 405 33 1,006 1,424 1,315 1,193 France 1,085 773 612 1,185 999 1,041 South Korea 2,473 2,090 824 1,161 1,032 1,013 Spain 418 333 493 653 616 664 Tariffs pulled back in March 2020 — Global Trade Tracker US high-volatile coal prices fob Hampton Roads $/t Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Q&A: Africa's role in the EV revolution


25/02/05
25/02/05

Q&A: Africa's role in the EV revolution

London, 5 February (Argus) — The African continent plays a vital role as a supplier of raw materials essential for electric vehicles (EVs), but what about the downstream? Argus spoke with Dave Coffey, chief executive of the African Association of Automotive Manufacturing(AAAM), at the sidelines of the Indaba Mining Conference in Cape Town, South Africa about Africa's EV ambitions. Which African countries are ready for EV adoption? We see demand for motorcycles and public transport today, and east Africa is leading that market. The passenger car will take much longer because of affordability issues. Today, we are struggling to increase the sale of internal combustion engines (ICE) and transitioning to electric vehicles will not happen quickly. Instead, you are likely to see an increase in three-wheelers or even four-wheeled micro-mobility options, while passenger cars will lag. Also, countries will transition at different speeds depending on their natural resources. Some countries have gas, CNG, and they're pushing to convert vehicles to piped natural gas (PNG). Others are pushing for green hydrogen. You're going to see different journeys on the transition to electric mobility. And if you just look at India and China — I often use India as a benchmark for Africa because of its similar population — they are exploring all different types of powertrains, and Africa will be likely to follow suit, moving at various speeds. Which countries are better positioned in the EV supply chain? South Africa clearly has the greatest demand on the continent today. If you look forward, say, 10 years, Egypt will have strong demand. Egypt will come through and can produce 500,000 vehicles in the next decade for its own consumption. Algeria is also taking off. Its industry was closed for a number of years owing to corruption issues. Algeria could get to 400,000 vehicles. Morocco will get to 220,000 vehicles for its own use, not for exports. Tunisia will probably be at 80,000 cars. In sub-Saharan Africa, the Ivory Coast may see demand for 80,000 to 90,000 vehicles. We are investing significant effort into driving demand in sub-Saharan Africa because of the vast opportunities present there. However, it is essential to provide affordable mobility solutions to reduce the reliance on used vehicle imports. What are the main challenges apart from affordability? It's the political will to implement the industrial policy, because how do you switch over and cut off used vehicles? You can't industrialise and hope people will buy when they can't afford to buy. The big issue is access to affordable finance. It's a big issue that we're working on in Africa. Imagine if you have a new vehicle that becomes a used vehicle and attracts vehicle finance. It'll compete with the used cars coming in. Financing is a critical issue, both from a consumer perspective and an investment perspective. You're getting component manufacturers wanting to invest. It's not a big ticket out of $10mn. It might be $2mn, and they're not able to access capital. Finance all around is a big development drive in Africa. Are there any logistical problems delaying EV adoption? My view on logistics is that, for example, people say we can't ship between one country. We've already seen, and I've got examples, that when the volume picks up, it just gets sold. It does. Because then you've got shipping lines that will put on the shipping routes. Yes, Africa does face logistics challenges, particularly the lack of rail infrastructure. However, consider this: currently, intra-Africa trade is only at 17pc. Imagine if that figure increased to 50pc. We would need a significant number of commercial vehicles to support that growth. Commercial cars have a huge future for Africa as a result of the intra-Africa trade we're trying to drive. Creating demand drives the value chain and the entire ecosystem. We need to generate demand. By Cristina Belda Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

S Korea to invest $89.5mn in net zero, energy security


25/02/05
25/02/05

S Korea to invest $89.5mn in net zero, energy security

Singapore, 5 February (Argus) — South Korea today announced plans to invest 129.3bn won ($89.5mn) this year in new research and development projects in the energy sector, to achieve carbon neutrality and ensure domestic energy security. About W78.7bn will go to 41 projects in the first round of funding this year. These projects will focus on technologies related to "carbon-free" energy such as renewable energy, nuclear power, and hydrogen, among others, South Korea's energy ministry (Motie) said on 5 February. The ministry will also invest W46.2bn to improve energy efficiency and in power systems, especially given surging power demand driven by artificial intelligence. Motie also plans to invest W56.9bn in securing technologies such as next-generation solar power, flexible operation of nuclear power plants, and large-capacity water electrolysis facilities, to "respond to the climate crisis". South Korea's science ministry in December 2024 unveiled plans to invest W2.75 trillion in technologies this year to respond to climate change, which included renewable energy technology and "carbon-free" technologies like nuclear power. It is unclear if the latest W56.9bn commitment is part of the W2.75 trillion announced last year or a separate investment. South Korea in December 2024 also announced plans to invest W450 trillion won in green finance by 2030, then acting president and prime minister Han Duck-soo said before he was impeached later that week . This made deputy prime minister and finance minister Choi Sang-mok the current acting president and acting prime minister. President Yoon Suk Yeol was impeached on 14 December and has since been arrested. If Yoon is removed or resigns, a presidential election must be held within 60 days, instead of the original election date in 2027. By Tng Yong Li Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US tariffs to push automotive prices higher


25/02/03
25/02/03

US tariffs to push automotive prices higher

Houston, 3 February (Argus) — US tariffs on Canada and Mexico would likely lift automotive production costs noticeably higher as automakers and their suppliers rely on multiple cross-border shipments. US president Donald Trump said over the weekend he would enact 25pc tariffs on imports from Canada effective 4 February, but delayed Mexican tariffs until at least March . An all-encompassing tariff on the two and potential retaliatory tariffs could severely hamper regional automotive producers, which draw from cross border flows for both raw materials including finished steel and aluminum as well as integral parts and components. The tariffs are meant, in part, to drive more manufacturing back into the US — as General Motors chief executive Mary Barra said her company would likely do should the tariffs be imposed on Canada and Mexico. Other automotive manufacturers could possibly follow suit in order to escape the increased costs associated with tariffs. But shifting operations from one country to another would be costly and time consuming. Some manufacturers produce parts for the same vehicle on different sides of the border, meaning even a car or truck assembled in the US could see its costs increase if it relies on parts made by the same company at a Canadian factory. Completed vehicles The US imported 2.855mn of its smaller passenger vehicles from Mexico and Canada between January and November of 2024, according to customs data, or about 41pc of all such vehicles. The two nations also accounted for the import of 1.16mn heavier vehicles designed for the transport of goods in the same period, or about 95pc of all of those vehicles. Mexico alone sent 83,201 tractors to the US for the year-to-date 2024, roughly 39pc of the US total. Automotive parts Cross border flows of parts and accessories could be curtailed even more as they likely will have to cross in and out of the US in multiple stages, potentially receiving multiple 25pc tariff hits. The US imported 3.4bn motor vehicle parts and accessories from the two countries or about 38pc of all such imports, and exported 3,073t of these parts back across the border to Canada and Mexico. Nearly 90pc of the US' exports of spark-ignition piston engines, or 3.57mn units, were sent to Canada and Mexico, while 30pc of all US imports of such engines, or 2.26mn units, come from the two countries. The US imported roughly 82pc or 43,582t of its cast-iron parts for internal combustion engines from Mexico. Metal mounting and fitting imports for automobiles from Mexico alone represented 73pc of US totals, with the US in return exporting 64pc of such products back to Mexico. Canada took in 24pc or 29,035 metric tonnes (t) of the product. The US acquired 40pc or nearly 36,000 of larger auto bodies and chassis from the two nations in 2024, while sending 57.5pc of its exports or 21,553 back across the same borders. Alternatives limited Although some alternative import sources do exist, many of these auto plants are located inland of key receiving ports and have closely tied operations that could require multiple stagged parts replacements. Some vehicles are estimated to cross US borders into Canada and Mexico and back as many as seven or eight times before final assembly, according to a 2021 Congressional Research Service paper. China would be a major alternative supplier for US or Canadian automotive parts in multiple cases, including for internal combustion engines. The US imported $87.1bn in light vehicles from Canada and Mexico and $77.5bn in automotive parts in 2022, according to a 2023 US International Trade Commission report. Any tariff could notably sting regional automotive producers just climbing out of multi-year low sales levels. US total vehicle sales hit a seasonally adjusted annual rate of 17.22mn in December, the highest level since May of 2021, according to Federal Reserve data. By Cole Sullivan and Zach Schumacher US automotive imports from Canada count Jan-Nov 2024 Jan-Nov 2023 Diff ±% Share of total volumes Full vehicles, bodies, and chassis Tractors 1,612 1,395 217 15.60% 0.80% Motor vehicles 915,408 1,138,494 -223,086 -19.60% 13.00% Motor vehicles for transport of goods 152,232 150,279 1,953 1.30% 12.50% Special-use vehicles (ex. firetrucks) 1,826 1,554 272 17.50% 53.40% Work trucks (ex. airport luggage vehicles) 1,595 1,656 -61 -3.70% 8.00% Vehicle chassis fitted with engines 1,821 1,622 199 12.30% 14.60% Vehicle bodies 8,896 8,584 312 3.60% 11.50% Spark-ignition engine parts 705,337 924,439 -219,102 -23.70% 9.40% Compression-ignition engine parts 3,198 3,759 -561 -14.90% 0.10% Parts and accessories 1.23bn 1.28bn -48mn -3.80% 13.70% — US Census Bureau US automotive imports from Mexico count Jan-Nov 2024 Jan-Nov 2023 Diff ±% Share of total volumes Full vehicles, bodies, and chassis Tractors 83,201 108,267 -25,066 -23.20% 38.90% Motor vehicles 1.94mn 1.79mn 151,439 8.50% 28.00% Motor vehicles for transport of goods 1,007,433 919,850 87,583 9.50% 82.40% Special-use vehicles (ex. firetrucks) 35 70 -35 -50.00% 1.00% Work trucks (ex. airport luggage vehicles) 6,513 4,214 2,299 54.60% 32.50% Vehicle chassis fitted with engines 4 7 -3 -42.90% <0.1% Vehicle bodies 25,285 15,922 9,363 58.80% 32.60% Spark-ignition engine parts 1,551,874 1,415,311 136,563 9.60% 20.60% Compression-ignition engine parts 1,526,994 1,943,567 -416,573 -21.40% 68.60% Parts and accessories 2.17bn 2.18bn -8,121,686 -0.40% 24.30% — US Census Bureau Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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