No, Franz Kaldewei doesn’t usually go to Duisburg to buy steel himself. His family business makes very expensive bathtubs and sinks – not from ceramic or plastic, but from steel-enamel, a mixture of metal and glass. But now Kaldewei, gray suit, black helmet, is standing in a huge Thyssenkrupp warehouse.
The bathroom supplier has not only ordered 300 tons of steel, he is also taking a certificate back to Münsterland: This steel, it is certified, has a 70 percent smaller CO₂ footprint than conventional goods. “Sustainable building is a huge issue, especially in architecture,” says Kaldewei. Hopefully, you will soon no longer be able to avoid your bathtubs.
70 percent less CO₂, that sounds revolutionary for a city like Duisburg. Steel has been cooked here for 130 years – according to an unchanged recipe: ore is reduced to pig iron with coal and processed into steel. But the climate balance is bad. The Thyssen plant in Duisburg alone causes two percent of all greenhouse gas emissions in Germany.
There is a recipe for the future: with green electricity and hydrogen. But until the necessary systems are in place, the industry tries to get the most ecologically beneficial out of the blast furnaces. She is now starting to sell steel that protects the climate at least a little. But if you look behind the labels, you end up in arithmetic tricky. Or – in another case – with French nuclear power.
Manufacturers of cars, refrigerators and washing machines want to buy green steel
Above all, Thyssenkrupp is trying to use less coal. For this, Germany’s larger steel manufacturer is using the first quantities of sponge iron. That is already reduced iron, currently it is still produced in Russia with natural gas. Thyssenkrupp is also using more scrap in the blast furnace. In both cases, less coal is needed and less CO₂ escapes.
The group can offset these savings against a small part of the production. Companies like TÜV Süd check the calculation. Thyssenkrupp plans to sell 50,000 tons of low-carbon steel in the coming year. Of course, this only corresponds to around 0.5 percent of annual production. “By 2024, the amount should increase to 500,000 tons,” says division manager Bernhard Osburg. The steel is not completely green; Preliminary products like sponge iron also want to be manufactured and transported.
From the Rhine port to the blast furnaces to the conveyor systems: Thyssenkrupp’s steelworks in Duisburg alone is larger than the Principality of Monaco.
(Photo: Ina Fassbender / AFP)
What is to be made of such computing tricks? “In terms of balance sheet green steel can be a sensible interim solution,” says Nicole Voigt, steel expert at the Boston Consulting Group (BCG). Because really “green” steel with hydrogen will not be available in considerable quantities before 2025. “The manufacturers can already test the market,” says the management consultant. “And there is already a demand.” Manufacturers of cars, refrigerators and washing machines in particular want to use more green material. “That puts steel manufacturers under pressure,” says Voigt.
It’s not easy to see what’s inside when it says green steel
What is certain is that Thyssenkrupp is not alone with the interim solution. Germany’s second largest steel manufacturer Salzgitter has been supplying “green” steel to Mercedes-Benz and the home appliance company BSH since this summer. The goods come from an electric arc furnace, which is mainly fed with scrap and a lot of electricity. The corresponding steel has a 66 percent lower CO₂ footprint compared to the blast furnace route.
Saarstahl has also recently been rolling low-CO₂ steel – initially into wire for construction. Here the goods come from the electric arc furnace of a subsidiary in France; Around 75 percent of the electricity there comes from nuclear power plants.
IG Metall rally in front of a Salzgitter Group plant: the industry is hoping for state support for “green” steel.
(Photo: Moritz Frankenberg / dpa)
BCG expert Voigt fears a certain proliferation of new brands for low-carbon steel. “For customers, it is not easy to see what exactly is inside when it says green steel,” says the management consultant. In their opinion, uniform criteria are needed, which, for example, industry associations could define.
And not all steel grades can be produced with scrap in the electric arc furnace. Steel manufacturers therefore need a replacement for their blast furnaces in the long term. Thyssenkrupp and Salzgitter each want to build a first so-called direct reduction plant by 2025. It produces sponge iron, which is then to be further processed into steel. Instead of coal, such a system can be operated with natural gas or hydrogen. It becomes practically CO₂-free if the hydrogen is obtained from water with a lot of green electricity.
The green steel bathtub is said to be around ten to 20 percent more expensive
But the new systems will cost a few billions. The manufacturers have applied for state subsidies, since climate protection is a task for society as a whole; they refer, for example, to the promotion of electric cars and their charging stations. In addition to the systems, they also need transport lines for hydrogen – and a lot of green electricity to generate it.
The steel industry in Europe has lost its importance in recent years. Worldwide, production is shifting more and more to countries like China or India – with comparatively low wages and requirements. In this respect, some see climate protection as an opportunity: “The market for green steel is still a long way from being divided,” says BCG consultant Voigt. “The train has not yet left for German manufacturers.”
With a certificate in the picture frame: Thyssenkrupp steel boss Bernhard Osburg (right) hands over the first CO₂-reduced tons to family entrepreneur Franz Kaldewei.
(Photo: Roland Weihrauch / dpa)
And is the first low-CO₂ steel now more expensive than the ordinary? Yes, says Thyssenkrupp manager Osburg. For example, the purchase and transport of the sponge iron is an issue. Nevertheless, his group is already “in talks with a number of other customers”.
Buyer Kaldewei estimates that its products with the low-CO₂ steel are ten to 20 percent more expensive than the conventional series. But that could only be a first indication, says the entrepreneur. He is initially planning a “limited edition”: The first order will probably only be sufficient for around 10,000 bathtubs and basins.