CEO Rick Osborne updates the Australian steel sector on what’s happening in New Zealand.
This piece ran in the December 2021 edition of the Australian Steel News (page 6)
The Climate Change Response Act 2002 requires the New Zealand government to publish an emissions reduction plan by 31 May, 2022 setting out how the country will meet its climate targets. The plan will set the direction for climate action for the next 15 years and require action across a range of areas including energy, transport, waste and construction.
In a perfect world, decisions regarding the use of building materials should be driven by engineers, designers and specifiers on a project-by-project basis: and for the most part they are doing that. Notwithstanding, the metals sector must continue to change practices to reduce the embodied and operational costs of new buildings, otherwise it risks losing round to other materials with a perceived lower carbon footprint.
This comes as a timber processing lobby is wearing out shoe leather on the windy streets of Wellington, attempting to convince policymakers that the solution to how New Zealand reduces its „embodied carbon‟ at the build stage lies with wood.
In short, to succeed, our local steel supply needs to be low carbon and we must continue to not only tell a compelling story about what we are doing to deliver lower emissions but also to strive for a circular economy. Of course, no one knows what the future holds, but I‟m reminded of former New York Yankees catcher and amateur philosopher, Yogi Berra, who said: “It’s tough to make
predictions, especially about the future”.
The fact steel plays a prominent role in our daily lives and is critical to New Zealand’s infrastructure is well known. Likewise, Metals New Zealand members are aware that the New Zealand Government plays a dual role as both a customer – and a large one at that for some – and a regulator. Nowadays, Government procurement tenders are specifying the use of materials that support New Zealand’s aim to be a net zero carbon economy by 2050. Ministers have instructed the public sector to lead the way by giving consideration to the lowest carbon option as part of government procurement strategies.
What our industry is doing
It is helpful therefore that back in February of this year BlueScope Steel (owner of New Zealand Steel) appointed Gretta Stephens as Chief Executive Climate Change. Whilst Gretta’s appointment has global reach, being based in New Zealand provides the sector with an opportunity to share world best-practice, and to engage with government and business customers on the sectors transition to a low-emission future. New Zealand Steel recently collaborated with its supplier of co-generated electricity, Alinta Energy, to improve off-gas and heat recovery from the multi-hearth furnace afterburners and increase steam generation. This three-year project has resulted in a near 10 per cent increase in onsite electricity generation (55,000 MWh/yr), representing 5 percent of total electricity requirements at Glenbrook.
Fletcher Steel recently received decarbonisation funding for its coil coating process. At the completion of this work, Fletcher Steel’s fossil fuel consumption will be reduced by up to 89 per cent and have a resulting reduction in eCO2 emissions of 67 per cent, smashing Fletcher Building’s mandate of a 30 per cent reduction by 2030.
Steel & Tube’s greenhouse gas emissions are down 9 per cent year on year through a range of company-wide initiatives.
New Zealand is leading the way in sourcing alternative reductants for New Zealand steelmaking.
Victoria University of Wellington’s Robinson Research Institute has demonstrated its hydrogen-ironmaking reaction in a custom-built fluidised-bed reactor, which reacts New Zealand ironsand with hydrogen gas at temperatures up to 1000 ⁰C to produce very high-purity iron (better than 99.8 per cent iron).
The new process utilises hydrogen instead of coal. The hydrogen reacts with iron ore to form only water vapour, and hence the process has zero CO2 emissions Hydrogen can be generated from the electrolysis of water using ‘green’ electricity from wind, solar or geothermal sources. The team recently received a grant of $6.5 million from the Ministry of Business Innovation and Employment Endeavour Fund, which will support continued research into the scale-up of hydrogen-steelmaking in New Zealand.
Heavy Engineering Research Association (HERA) is launching a world first zero-carbon steel offset programme. In response to its role in reducing Aotearoa New Zealand’s carbon emissions, it has developed the world’s first comprehensive steel product offset calculator. This is part of its steel product carbon offset programme -Tātaitai Puhanga Waro (mo te Hua Rino)- which has been developed to provide a robust carbon offsetting programme for steel products in New Zealand. HERA is also developing an Australasian first material passport for steel, which will increase the ability to reuse steel (i.e. facilitating reuse vs. recycling as part of circular economy).
85% of Aotearoa’s building and construction steel waste is recycled, which at this recovery rate has potential savings in global warming per tonne of steel scrap generated in the sector of 1,249 kg CO2-equivalent. If 100% recovery could be achieved, there are potential savings of 1,473 kg CO2-equivalent.
The metals sector shares the government’s objective of reducing net carbon emissions.
In doing so, we need to move away from outdated talk about embodied carbon and start focusing on conversations about lifetime carbon emissions.
As the sector transitions to 100 per cent circularity and zero carbon emissions, the sustainability credentials of steel and other metals will be very hard to challenge. When this occurs, I would wager that making predictions about New Zealand’s steel industry, with its rosy future, will get a whole lot easier.