HIsarna, a Revolution in Steelmaking

1. February 25, 2013 / Tim Peeters HIsarna, a Revolution in Steelmaking

2. Paper & Steel : Common Ground? • CO2 intensive (1.1% vs 4% of man made CO2) • Energy intensive • High recycling rate (70% vs 95%) • Capital intensive • Major facilities > 20 years life span • Large sites, large installations • Threshold for implementation of breakthrough technologies • Trend of past 20 years • Process efficiency, labour productivity increase • From Fragmented to Consolidated industry • Changing competitive landscape in major markets • Sustainability and Climate Change challenge

3. The Challenge in Steelmaking Growth Sustainability World steel consumption Ambition to cut CO2 emissions will double in 2050 by 50 % in 2050

4. The Brand: Ultra Low CO2 Steelmaking The International Approach • Climate Change is Global • Climate Change is Long Term • Support at board level, governmental level, EU level • Build industrial partnerships, bring people together • Use a broad range of expertise • Build a common language

5. The ULCOS project Objective: 50% reduction in CO2 emissions per ton of steel from iron ore based steel production by 2050 • Globally the largest steel industry project on Climate Change mitigation • Core partners: ArcelorMittal, Tata Steel, ThyssenKrupp, Ilva, Voestalpine, LKAB, DillingerHütte/Saarstahl, SSAB, Rautaruukki • Co-partners: 48 Institutes, Universities, Engineering companies, etc • Budget: 75 M€ • Duration ULCOS I: 2004 – 2010 ULCOS II: 2011 – 201…

6. Energy, Oxygen Institutes Equipment manufacturers Steel Universities SMEs ULCOS Consortium: 48 partners

7. Idea  Experiment  Pilot  Demo  Industry 201.. 2010 2004 ULCOS - I Project ULCOS - II Project progress CO2 and sustainability modelling Selection Pilot plant Industrial Demo Inventory of 200 process options • Selection Criteria • CO2 • Economical • Technical maturity • Social acceptance • Other environmental aspects • Fit with existing configurations

8. Common approach, definitions, boundaries Gate to Gate approach for the Classical Integrated Steel Mill Everything is assessed for one ton of Hot Rolled Coiled (HRC) Focus area:Ironmaking is responsible for 85-90% of CO2 per HRC

9. Selection Process: Funnelling the Options 201.. 2010 2004 ULCOS - I Project ULCOS - II Project 4 processes selected CO2 and sustainability modelling Top Gas Recycling Blast Furnace Better use of Carbon in retro-fitted plants Inventory of 200 process options Better use of Carbon in a new process HIsarna Replacing Carbon with Natural Gas or Hydrogen Selection Gas based reduction Green power, mimic Aluminium production Electrolysis of iron ore

10. Top Three Hurdles to Manage • Technical • High intensity, high efficiency process development • Focus on generic long-term solutions • Financial • High risk, high reward • Partnering: sharing benefit + cost + effort + risk • Industry contribution + local / national / European funding • Organisational • Consortium • People: availability, expertise, critical mass • Communication • Public relations • Intellectual property

11. Steel Production Process RouteWhere does HIsarna fit? Iron ore Steelmaking coal Ironmaking Casting Rolling & Coating Steel products

12. HIsarna technologyComparison with the Blast Furnace route Blast furnace sinter Iron ore coke Liquid iron coal

13. HIsarna technologyComparison with the Blast Furnace route Blast furnace sinter Iron ore coke coal Direct use of coal and ore No coking and agglomeration Liquid iron

14. 2011 2010 2009 2007 7 years of preparation before the first experiments 2004 HIsarna pilot plant 2012

15. Key Success Factors Construction September 2010 • Commitment from all levels • Financial support • Logistical, Engineering and R&D know-how on site • Cooperation • Perseverance • Fast cycle of learning and improving

16. Cold Commissioning, January 2011

17. First Start-up, April 2011

18. First HIsarna Hot Metal, May 2011 Production runner HIsarna pilot plant

19. HIsarna Summary • With the ULCOS and HIsarna project the European steel industry is proactively approaching the Climate Change issue • In the HIsarna project knowledge and experience of steelmakers and equipment suppliers from all over Europe is brought together • HIsarna is a high risk/high reward innovation with the potential to have a strong environmental and economical impact on the steel industry • Environmental impact: • Without CO2 capture and storage 20% reduction • With CO2 capture and storage 80% reduction • Strong reduction of other emissions • Economical impact: • Wider range of raw materials • Lower CapEx, OpEx

20. Challenges for HIsarna Future • Demonstrate robustness of technology • Further pilot plant campaigns: people, time, funding • Up-scaling to industrial size • Transition from “generic” to “specific” (location, size, configuration) • Investment 250 M€ (± 50 M€) • Demonstration scale should have a competitive business case • Governments can support this • Many potential innovations in ironmaking have not survived this step • Sustainable industry future, supported by National and European policies • Review the 2050 Roadmap (environmental, economical, social landscape) • Develop business case for pushing out Blast Furnace technology

21. What have we learned along the way? • Think big: Focus on breakthrough, not incremental • Partnerships, collaboration, trust • Set scope, targets, common definitions • Clear funnelling & selection process: • Generic, Long Term solutions • Handle good ideas outside the scope • Don’t bet on one horse • When stakes get higher, stay connected with the business strategy • Innovation comes from people with expertise