The initiative will start with a five-year exploratory phase, which should be followed by a pilot phase lasting for another five years before commercial implementation can be considered.
The consortium, called ULCOS (Ultra Low CO2 Steelmaking), is led by a core-group of steel producers comprising Arcelor, Corus, ThyssenKrupp Stahl, Riva, Voestalpine, Saarstahl and Dillinger Hüttenwerke. Suppliers to the steel industry such as L'Air Liquide and Danieli-Corus, are also participating, as are a number of academic institutions.
The ULCOS consortium is part of a multidisciplinary steel research platform co-financed by the innovation programmes of the European Commission, officially launched on 12 March 2004. The report of the Group of Personalities of the Steel Technology Platform identified the need for the sustainability of steel production to be enhanced through massive reductions in CO2 emissions.
This is an ambitious requirement, as the integrated steel production route generates about two tons of CO2 per ton of steel. Intense effort by the industry has seen energy consumption go down by 60 per cent in the last 40 years, while the total CO2 emissions of the steel industry has been reduced by 50 per cent over the same period.
But to go beyond these major achievements and decrease emissions by a significant factor in line with the probable post-Kyoto requirements for the future, the steel industry needs to develop new process paradigms based on breakthrough technologies.
There are a number of key factors behind this push towards greener steel production. For a start, manufacturers are experiencing ever-greater pressure to meet new climate control regulations, reduced emission targets and better waste disposal. The Emission Trading Scheme is one of the policies being introduced across Europe to tackle emissions of carbon dioxide and other greenhouse gases and combat the serious threat of climate change.
The scheme, which came into force 1 January 2005, is designed to ensure that greenhouse gas emissions in the energy and industry sectors are cut at least cost to the economy and help the EU and its Member States meet their emission targets under the 1997 Kyoto Protocol.
Emissions trading involves the buying and selling of emission allowances between countries or firms that are obliged to mitigate their greenhouse gas emissions at a specified level. The EU ETS scheme facilitates this as a means of tackling emissions of carbon dioxide and other greenhouse gases and combat the serious threat of climate change. It allows governments to regulate the amount of emissions produced in aggregate by setting the overall cap for the scheme but gives companies the flexibility of determining how and where the emissions reductions will be achieved.
By allowing participants the flexibility to trade allowances the overall emissions, the theory is that reductions are achieved in the most cost-effective way possible.
Reducing energy consumption is also in the economic interests of companies to think about sustainable production. Rising world energy costs, particularly oil prices to which continental European gas rates are tied, have triggered sharp increases in energy prices across the globe.
Energy charges account for 20-25 per cent of production costs of industries such as manufacturers of glass products, pulp and paper, and steel, rising to 40 per cent for aluminium smelters.
In addition, environmentally friendly packaging has become a major growth area, reflecting consumer and retailer awareness of the issue of waste disposal. A large number of packaging firms are launching products made of 100 per cent recycled materials, and there biodegradable inks are also increasingly evident on the market.
This R&D programme therefore hopes to identify new ways of decreasing CO2 emissions within the steel industry in order to meet EU expectations and maintain the competitiveness of the sector. The consortium believes that within five years, it could have developed an iron ore-based process with verification of its feasibility in terms of technology, economic applicability and social acceptability.
One possible technology is based on the recycling of blast furnace top gas after decarbonisation. CO2 capture and storage technologies could also be added. Other radical technologies to be examined include electrolysis and the use of hydrogen.