ArcelorMittal, the world’s biggest steelmaker, has launched plans that could eventually cut 2% off its annual EU ETS emissions by using waste gases from its plants to produce low-carbon transport fuel.

The firm will commence construction on an €87 million bioethanol facility at its works in Ghent, Belgium, later this year, and it forecasts the plant will produce about 47,000 tonnes of the biofuel a year from 2018, ArcelorMittal said in a statement.

Once the process is proven, the steelmaker intends to expand the technology across its European operations, which would have the potential to produce 500,000 tonnes of bioethanol annually.

For every tonne of bioethanol produced, it reduces ArcelorMittal’s CO2 emissions by 2.3 tonnes, as well as displacing 5.2 barrels of gasoline that would otherwise have been used to power cars, the company said.

This would have been enough to cut around 2% off ArcelorMittal’s ETS-related CO2 output in 2014, when it emitted 54 million tonnes, according to figures from Carbon Market Data.

“Steel is produced through a chemical process that results in high levels of waste gases being emitted; this new technology will enable us to convert some of these waste gases into fuels that deliver significant environmental benefits when compared to conventional fossil fuels,” said Carl De Maré, vice president of innovation at ArcelorMittal, in the statement.

He said this environmental benefit was further justification of why steelmakers’ carbon footprint should be viewed by regulators on a life-cycle basis rather than merely at site level under the EU ETS.

FUNDING INNOVATION

ArcelorMittal intends to set up a dedicated company to roll out this technology with strategic financial partners, and it said it is talking with other potential investors.

The steelmaker has already secured €10.2 million of EU taxpayer cash via the EU’s 2020 Horizon programme for research and development.

As the biggest industrial manufacturer in the EU ETS, ArcelorMittal has made many more millions of euros by selling off surplus carbon allowances after being freely allocated more than it needed to cover its annual emissions since 2008.

In 2014, ArcelorMittal received 6 million EUAs more than it needed, according to Carbon Market Data, a surplus worth around €46 million at current prices.

Steelmakers have contested some third party calculations of their EUA surplus, stating they do not fully take into account transfers to power generators of both the waste gas and the corresponding EUAs.

TECH IN DEVELOPMENT

ArcelorMittal has been working on the biofuel process since 2011 and has launched a partnership with technology provider LanzaTech and engineers Primetals Technologies to build the Ghent plant, which would be Europe’s first commercial scale facility to create bioethanol from steelmaking waste gases.

LanzaTech’s technology uses microbes that eat the waste gases and turn them into bioethanol, which can then be blended with conventional gasoline to cut emissions from vehicles by up to 80% compared to conventional fossil fuel.

The collaboration with ArcelorMittal could in theory be rolled out globally, as only around half of the company’s steel output is made in Europe.

LanzaTech is also collaborating with companies in other sectors including US aircraft manufacturer Boeing and Japanese industrial conglomerate Mitsui.

By Ben Garside – ben@carbon-pulse.com

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