Speech by Premal Desai, Chairman of thyssenkrupp Steel Europe
Climate Action Summit, New York, September 23, 2019
Dear Ladies and Gentlemen – thank you for the opportunity to speak on behalf of thyssenkrupp at this press conference on Climate Action. My name is Premal Desai and I am the Chairman of thyssenkrupp Steel.
thyssenkrupp is a German industrial company with operations worldwide. We are Germany’s number 1 and Europe’s number 2 in steel production. We also provide elevators and automotive components as well as plant engineering and materials services for customers around the globe.
Our climate strategy and technology routes for green steel production
We at thyssenkrupp are fully committed to the Paris Climate Agreement of 2015 and support the climate policies of the German Government. thyssenkrupp will reduce its "scope 1" and "scope 2" greenhouse gas emissions by 30 percent, and we aim to become climate-neutral in our own processes and the entire value chain by 2050.
Steelmaking is globally a substantial carbon emission industry today. In order to significantly reduce carbon emissions in our steel operations, we pursue two parallel routes: Our “Carbon2Chem” route is based on Carbon Capture and Usage, using steel emissions and converting them into base chemicals. The other route is a Carbon Direct Avoidance-approach by hydrogen-based steelmaking.
With the hydrogen route we intend to replace metallurgical coal such as the chemical reducing agent in the steelmaking process with “green” hydrogen so that in the long run, no CO2 will be emitted in the production of steel.
We are technically capable of doing that. And we at thyssenkrupp have already started this very ambitious transformation. However, due to our long technological investment cycles of 20 to 30 years, it will take time to ramp-up and transform our current production base – and it will come at a cost: currently, we estimate capital expenditure for our transformation of around 10 billion Euros or more up until 2050. And at current prices, hydrogen-based steel will be costlier than the current carbon route.
climate-friendly steelmaking
To achieve our targets, we at thyssenkrupp – and the steel industry as a whole – require a reliable framework. Firstly, we need a true regulatory and economic level playing field worldwide that includes a globally consistent price for carbon as well as fair trading conditions for steel. Secondly, global steel overcapacities need to be tackled in a meaningful way. And thirdly, customer incentives and financing support will be necessary to develop a market for steel with lower carbon footprint.
But above all, we need high volumes of green hydrogen at competitive prices as well as the necessary infrastructure. Green hydrogen strategies will be of utmost importance for all decarbonization efforts. This means that the amount of renewable energy has to be increased manifold.
Setting the necessary framework for climate-friendly steel involves politics, society and business
Ladies and Gentlemen, what we at thyssenkrupp are doing now is nothing less than reinventing the process of steelmaking. And let me be very clear: There is no alternative. Steel will continue to be the material of choice for industrial development and an integral piece of future value chains – it is incomparably versatile and recyclable.
Let me summarize: it can be done. We can make the steel industry climate-friendly. We at thyssenkrupp have started on this path even though major challenges have not yet been addressed by regulation and policy makers. This must follow. Fast. Not only in Germany. Not only in Europe, but all over the world. The sooner, the better.
The challenges we face regarding climate action can only be addressed jointly by governments, societies and business. The founding of the Leadership Group for Industry Transformation at the summit today is a very good step in this direction.
The relevant Heads of States and Governments and policy makers are here to attend this summit. We request you to quickly set the scene for the successful transformation of the steel industry. Because we want to be a part of the solution and the future. Thank you.