Steel sector battles to cut carbon footprint

By Eric Onstad

LONDON (Reuters) - The biggest challenge for the global steel industry is combating climate change and reducing its footprint as the biggest industrial contributor to carbon dioxide emissions, a senior industry figure said on Monday.

"We account for the biggest emissions of any industrial sector, and that's due to our sheer size," Ian Christmas, secretary-general of the International Iron and Steel Institute, told the Reuters Global Mining Summit in London.

In the short term, a significant impact can be made by improving energy efficiency in China, which accounts for around half of steel sector C02 emissions, and Russia, Christmas said.

But longer term, the steel industry must boost research and development spending to find ways to either capture and store carbon dioxide or find new technological solutions for the production process, he said.

A concerted effort is key since developing nations are expected to continue ramping up the building of infrastructure and consuming huge amounts of steel, meaning the sector could double in size in volume terms over the next three decades, Christmas added.

NEW THINKING

"The steel industry, I think, has to come up with a lot of new thinking. We have a major program to do long-term research to find new ways of making steel," he said. "But society as a whole also has to find new ways of using materials in a more efficient way."

Christmas criticized governments that want to spur change in the sector by imposing financial penalties.

"The concern of my members is that governments are focusing on the short-term fix and that may even be at the expense of a long-term solution," he said.

For example, if the European Union charged a stiff penalty of 50 euros per tonne on firms that did not meet strict emissions criteria, it would do little to cut global carbon dioxide levels.

"All that would happen is that production would go elsewhere in the world, which probably has lower energy efficiency than ourselves, but more fundamentally it would probably reduce the ability to spend on long-term research and development and find new ideas."

So far, the most potential for cutting carbon dioxide in the steel industry seems to be through carbon capture and storage, he said.

"In the steel sector, most of the emissions are associated with the production of iron in the blast furnace, in a single-point source... (where) you could capture large volumes of CO2 relatively easy."

(For summit blog: summitnotebook.reuters.com/)

(Reporting by Eric Onstad; editing by Rory Channing)