Climate change has been a critical issue in all sectors, including iron and steel industry which contributes up to 3-4% of total world greenhouse gas emissions. However, we cannot ignore the fact that steel is essential and has become a necessary part of life. Global steel consumption has been growing rapidly every year, resulting in a substantial increase of steel production to serve the needs of the world. In the 1950s, annual global steel production was around 200 million tones. However, in 2006 the figure stood at 1,239.5 million tonnes, as reported by IISI.
Obviously, we cannot stop consuming steel nor producing it. The future growth in demand for steel is apparent and is driven mainly by China, India, Russia and other countries including ASEAN. IISI has estimated that every tonne of steel produced will create an average of 1.7 tonnes of carbon dioxide. Imagine how much greenhouse gas could the steel industry emit per year. In fact, over 90% of steel industry emissions come from iron production. The existing major nine countries or regions producing iron are Brazil, China, EU-27, India, Japan, Korea, Russia, Ukraine and the USA. There will be more iron-making capacity expansion from both green-field and brown-field projects. ASEAN region itself is expected to see several iron-making projects being implemented in Thailand, Indonesia, Malaysia and Vietnam over the next few years.
A number of nations are concerned over the contribution to climate change by iron and steel industry and have started to address the issue of emission reduction. The Japanese steel industry is engaged in the running of a programme in research and development to reduce energy consumption. It has set a target of 10% reduction in energy consumption for the year 2010 compared to 1990 levels. Many other countries are making similar efforts in this direction.
IISI has approached governments attending the recent Bali meeting on climate change to work with steel industry to improve energy efficiency and reduce carbon dioxide emissions. In brief, four key issues have been raised
1. Government should work closely with the steel industry on a global approach by adopting a sector specific framework which involves all major steel-producing countries.
2. Any emission regulatory regimes should support the expansion of efficient steel companies and the decline of the least efficient companies based on an equal basis.
3. Governments should work with IISI to adopt and support a new methodology that will measure and analyse emissions data from its member companies' plants in all major steel producing countries.
4. Governments should work with the steel industry to invest in the next generation of "breakthrough" technology CO2 programmes, to bring about the next major advancement in steelmaking.
IISI has also issued a position paper on CO2 emission reduction for the steel industry. The study has suggested several important roles that the steel industry should play in finding solutions for the climate change.
Firstly, the steel industry is advised to focus on technological advancement which will enable substantial reductions in CO2 emissions from steel production. This includes enhancement of energy efficiency in the steelmaking process, improvement of steel recycling and use of by-products from steelmaking as well as employing better environmental protection techniques.
In addition, the paper suggests that the steel industry should adopt technologically-advanced applications of steel which are part of the solution to climate change. The steel industry is requested to get involve in programmes to help transfer efficient technologies to speed up the replacement of outdated steel plants in developing countries. Last but not least, it is noted that IISI and its members are at the cutting edge of long-term research and development into the next generation of steelmaking technology. To make a significant reduction in CO2 emissions, fundamentally new processes to optimize the use of energy in steel industry are required.