Author: Michael Reichenbach
In the interview, Basjan Berkhout of Tata Steel explains how a steel mill is shaping a sustainable future mobility with hydrogen replacing carbon with the aim to become CO2-neutral by 2050.
ATZ _ Springer Professional: Basjan Berkhout, Tata Steel promised to assist in developing electric vehicles which are more sustainable. What does this look like in terms of day-to-day development process exchange with an automotive OEM?
Berkhout: The term sustainability encompasses a broad range of requirements. Our pledge includes therefore the responsible sourcing of raw materials for our products including the welfare and human rights aspects associated with their extraction. As a member of the ResponsibleSteel non-profit organisation and through our own procurement processes, we expect and cascade high Environmental, Social and Governance standards (ESG criteria) to our suppliers. The issue of sustainability is also about the transition to a circular and decarbonised future. Our approach is to maintain a regular and close dialogue with our customers about our current performance, our major future plans and timelines for transition and the impact this will have on their products. We will be offering more circular and at least 30 % lower carbon footprint products by 2030.
Steel mills should become more sustainable. Where do you stand on the subject of green steel? Competitors, such as Ovako and SSAB, already supply automotive manufacturers like Volvo Trucks.
Green steel is a rather unspecific and very wide-ranging term. All of our current products are substantial lower in carbon dioxide footprint than global averages. And by 2030, we aim to further reduce our carbon footprint by at least 30 %, as I mentioned before. This will be achieved through a major transformation of our ironmaking assets by 2030, replacing existing blast furnace technology with a Direct-reduced Iron (DRI) process using green hydrogen and/or natural gas. This will enable us to offer at least 2,0 million tonnes of "green" steel products. But we recognise the need to act now. In the short term we will continue to enhance the performance of our existing assets, reducing CO2 emissions and increasing the amount of end-of-life steel in our products.
Green steel is made with hydrogen instead of carbon in these DRI plants. But according to materials science, iron needs carbon to become steel, right? Only then the steel is not too brittle and easier to process. How is this to be understood?
A small amount of carbon is indeed needed to make iron into steel, but in most modern strip steels the levels required are relatively low: Except in specialty products, the carbon content of our products is rarely above 0.2 % and in some products 100 times less! Using carbon to reduce iron ore results in far more carbon in steel than we need and it has to be removed. In the future, we will use hydrogen to reduce iron ore and only add the small amount of carbon needed to meet the product requirements.
Thanks, so then hydrogen can replace carbon almost 100 % for green steel production by the DRI process. Other question: What changing trends do you see, for example on the topic of secure international supply chains? Is there a need to manufacture more locally again? How does this affect the cost of, for example, the steel body of a passenger car?
We are observing a clear trend toward localization of the key, strategic products for the OEMs. There are several factors that are responsible for this trend: The supply chain risk (triggered by Covid pandemic, Suez Canal blockage, microchip shortage, Ukraine war, etc.) should be reduced. The environmental footprint is to be minimized in light of sustainability strategies. Lean supply chains with low stocks are needed to bring down costs. It is important to maintain control over the development of differentiating technologies (that is, especially for e-motors and batteries). I am not sure whether this trend will lead to significantly higher cost prices or not. OEMs have always only partly relied on imports so in the greater scheme of things this trend will not lead to huge changes.
Everybody is currently talking about rising energy prices for gas and electricity on the world markets. In how far are you affected as a Dutch steel mill? How do you counteract this in Europe?
Energy prices (gas and electricity) have risen sharply since mid-2021. Like everyone else, we are impacted by that. Although, a positive effect could be that these rising energy prices (and their dependencies) act as a catalyst for accelerating the use of hydrogen in Europe.
Basjan Berkhout, thank you very much for the insightful interview.
You can read more of the interview in ATZworldwide 9/2022, which will be published on August 26, 2022 digitally.