Steel producer ArcelorMittal released its decarbonisation roadmap on Tuesday, setting out clear steps towards becoming a net zero carbon emissions company by 2050. However, the country’s problem child, Eskom, electricity tariffs and wheeling charges could prove a stumbling block.
ArcelorMittal’s chief executive, Kobus Verster, says the substantial transformation of the company’s current electricity supply will require an active, real transition from coal-based electricity to electricity from renewables and other clean sources.
In this regard, the company has announced projects to generate at least 200 megawatts of renewable power on its premises.
However, Verster warns that the financial viability of renewables procurement will be influenced by Eskom/Nersa’s pricing structures, as well as wheeling charges.
Blackouts – a serious impediment
“Clearly load shedding, or the continued unreliable supply of grid electricity, will be a serious impediment to South Africa realising its decarbonisation ambitions.
“The extent to which Eskom is able to green its electricity generation, and the pace at which it rolls out renewables, will have a bearing on our decarbonisation efforts and those of most manufacturing industries,” he says.
Verster adds that implementation of the decarbonisation roadmap will not only change the way the company operates, but will be a catalyst for changing the steel industry and the economy of South Africa.
“The decarbonisation roadmap is based on the implementation of clear actions and interventions. However, it is by no means cast in stone and will be subject to regular updates and changes as breakthrough technologies emerge and are proven – which will influence how the company ultimately implements its energy transition,” he says.
As part of the way forward, ArcelorMittal is targeting a reduction of ArcelorMittal South Africa’s carbon intensity from 2.9 tonnes of carbon dioxide per tonne of crude steel (tCO2/tCS) in 2018 to 2.16 tCO2/tCS by 2030, and a residual 0.4 tCO2/tCS by 2050.
Based on these targets, the company will reduce its carbon intensity by 25% by 2030, and 86% by 2050, with residual emissions being offset by yet-to-be-developed technologies and/or carbon offset arrangements.
One of the two blast furnaces at Vanderbijlpark will undergo a reline and upgrade between 2027 and 2030, while a suitable electric arc furnace (EAF) will be commissioned in Vanderbijlpark.
This means that in 2030, in addition to the EAF, one blast furnace will be permanently closed and another returned to service as a low carbon-enabled furnace. The current blast furnaces are able to produce 1.3 million tonnes and 1.9 million tonnes of molten iron, ...