SMS group: aligning value creation, sustainability, and responsibility for generations to come

SMS group: aligning value creation, sustainability, and responsibility for generations to come
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In an exclusive interview with Green Steel World, Mr. Tim Kleier, Head of Green Steel at SMS group, talks about how the company that stands for future-oriented technology is creating new perspectives beyond its core business and taking responsibility for the industry and society as a whole very seriously.

Most of us know that pursuing the goal of sustainability, in other words, meeting our own needs without compromising the ability of future generations to meet theirs, is vital if we want to preserve a livable world for many years to come. With the steel industry being one of the largest emitters of CO2, it has a huge responsibility to achieve the target of net zero by 2050, yet it also has another significant factor in its favour: ensuring that sustainability careers have a central role to play in the future of our world, so that the generations to come can look towards a secure and bright future. Well, the good news here is that there is one company making sure that the steel industry of the future offers plenty of diverse opportunities for today’s and tomorrow’s employees hoping to make an impact.

What does green steel or low-CO2 steel mean to the SMS group? How do you define it?

As per the World Steel Association, green steel is a marketing term. However, for the SMS group, green steel is a journey that has a final destination clearly defined by the IPCC. Particularly because the sector is hard to abate, we need to identify the individual steps required to achieve this goal. With existing businesses and operations, especially, taking reasonable steps one at a time, with our feet on solid ground, is a secure way of de-risking the enormous transition without losing sight of the ultimate objective. With this goal in mind, SMS group offers a wide portfolio of decarbonisation solutions; not only the ultimate solution looming on the horizon that is being pursued in many companies’ roadmaps, but also all the steps in between.

Your website states that it is SMS group’s “mission to create a carbon-neutral and sustainable metals industry”. Could you elaborate on that?

Producing steel without carbon is impossible because steel is an alloy of iron and carbon. Therefore, carbon is an essential component. However, we have to ensure that we minimise the harm done to the environment by using only the absolute minimum of carbon, as per the requirements of the given iron and steel production route and the target product specifications. The small amount that remains can then be substituted by renewable carbon sources such as bio charcoal or gas or recycled carbon from waste plastics, for example. We also need to ensure that the journey is defined by economic success and that it is viable for us and our customers. It shouldn’t just be technology for technology’s sake. The technology must help our customers to achieve their sustainability goals.

Mr. Tim Kleier, Head of Green Steel at SMS group, will be speaking at the Green Steel World Conference to be held on April 4 and 5, 2023, in Essen, Germany.
Mr. Tim Kleier, Head of Green Steel at SMS group, will be speaking at the Green Steel World Conference to be held on April 4 and 5, 2023, in Essen, Germany.

GSW: Could you explain what the “full-circle use of metals” means? Does it have anything to do with recycling and circularity?

In principle, it covers recycling and promoting circularity in the entire metals industry. Taking a holistic view of all metals, not just steel. At SMS group, we support this by building plants that make circularity possible. Not only that, SMS group offers digital tools that pursue this very purpose. These tools quickly gain traction, as they not only achieve CO2 emission reductions with low costs and short implementation times but also offer a way to track carbon emissions for each product that leaves a plant, providing the transparency and credibility required to monetise investments in more sustainable steelmaking processes. 

As far as the steel industry is concerned, steel scrap melting is very well established, where existing businesses take care of the scrap collection, preparation, and distribution, with advanced processes implemented to turn scrap into new products. Scrap itself is used in line with common standards but the way all the by-products are utilized still needs some work. We can improve efficiencies by re-using so many by-products from the iron and steel production route in our processes. One good example of this is the Blue Blast Furnace, developed by SMS group, where we take coke oven gas and reform it internally to form syngas, which is a mixture of hydrogen and carbon monoxide, and feed it back into the process. 

Currently, these gases are generally used for power generation and have lowefficiency levels of up to forty per cent and a relatively high carbon footprint. So, by using these gases for metallurgical purposes we can reduce the input of fossil carbon that is brought into the plant and promote the use of greener versions of power. The Blue Blast Furnace technology promises CO2 emission reductions ranging from 10% to 70%, resulting eventually in a process that takes place within the blast furnace shell, but that is completely different.

Are your processes based just on steel scrap or there is a high usage of virgin iron ore too?

Today the global steel industry produces 1.9 billion tons of steel, which, according to several forecasts, will increase to roughly 2.5 billion tons by 2050. That’s an increase in production of 600 million tons of steel per year over the next 30 years. During the same period, scrap availability will go up by only 500 million tons. So, understandably, there will be a wide gap between the scrap available on the market and the steel required by the market.

This gap can only be filled by virgin iron ore-based steelmaking. We will maintain the same level of iron orebased primary steel production or perhaps even grow it slightly over the next 30 years. Therefore, the real solution to decarbonisation on the one hand is to use as much scrap as possible and, on the other hand, to avoid direct carbon in the primary steelmaking route. We provide cutting-edge technologies for both. Still, because there are efficient technologies available for scrap processing, the focus when developing new roadmaps is on the iron ore-based primary route, especially as most CO2 emissions in the steel industry originate from the reduction of iron oxides.

According to a recent press release, SMS group recorded its highest level of order intake in ten years. Would you say decarbonisation, the circular economy, and digitalisation are the biggest drivers of growth and the industry landscape is changing?

These are not only growth drivers – climate protection especially is the main motor for the most significant changes the steel industry has ever undergone. In most parts of the world at the moment, the ability to produce certain grades of steel with a lower carbon footprint is a competitive advantage. At the same time, other areas are still trying to increase their capacities to build up sufficient steel supplies, though they are still not able to fulfil the infrastructural requirements to supply green steel in large enough volumes.

Even when new facilities are built, the question remains as to how we can make sure these capacities are greener in the future. It is the key point in project discussions with customers around the world, and we are proud that we can supply and support our customers with integrated technologies and services, including digitalisation.

SMS group uses 150 years of experience and unique expertise in metallurgy, industrial processes, and digitalisation.
SMS group uses 150 years of experience and unique expertise in metallurgy, industrial processes, and digitalisation.

How big is the market for greener steel production and related technologies?

Let’s first focus on the green steel product market. It depends on where you look. For European steel traders, demand outweighs supply.

Currently, scrap-based processes are capable of producing “green” steel with the lowest product carbon footprint, but in many cases, it cannot be sold as green steel because of a lack of transparent carbon footprint accounting.

With the help of our digitalization team, we can offer a carbon tracking module as part of our energy and sustainability platform that keeps tabs on process greenhouse gas emissions as well as energy consumption along the entire value chain for each final product. This tool would be the ideal source for providing full, transparent data for the accreditation of green steel products by auditors, allowing products to be placed on the market as green steel with the highest degree of information detail.

Ongoing attempts are being made within the industry to develop new standards and we’ll have to watch and wait to find out which of these ultimately receive recognition or acceptance. Our customers’ customers who are interested in buying green steel want a clear, transparent and reliable definition of what it is. In my opinion, this could be as “simple” as a cradle-to-gate product carbon footprint accompanied by a basic categorization that helps to contextualize the calculated numerical value.

Moving on now from the market for green steel products to the market for green steelmaking technologies: as far as existing technologies are concerned; the spotlight is on direct reduction. There is no doubt it is a breakthrough technology for decarbonisation, yet it can’t be the only one. To reach the target of net zero for 1.4 billion tons of primary steelmaking every year, diverse technologies and pathways are needed. And, at SMS group, we are working tirelessly to offer alternative ways of reaching this end goal.

In other words, it is safe to say that viable technologies are there, but the real challenge now is to create the infrastructure these plants need for operation. Massive quantities of green energy are required to produce green hydrogen on an industrial scale. So, new technologies are available, but the conditions aren’t.

How do you see the role of hydrogen in the decarbonisation of the metals industry, especially steel?

Hydrogen has a tremendous role to play in the decarbonisation of the steel industry. As I mentioned earlier, we will still have iron ore-based steel production in the future. In particular, the substitution of fossil carbon sources with green hydrogen as the main reductant has significant carbon abatement potential.

We can support the use of hydrogen by driving other carbon-avoidance measures along the whole value chain, such as increasing energy and raw material efficiency and using different processes to improve the potential of hydrogen, ultimately reducing demand for an otherwise huge volume of it because the infrastructure is lacking at the moment. 

What are your personal views on decarbonisation and sustainability in general?

Net zero is possible if we start being more open about the application of technology. A big focus at the moment is on direct reduction technology, which is super important, yet there is a significant bottleneck in the construction of these plants, and there are not enough of them to satisfy a 1.4-billion-ton industry. We must be open to accepting other technologies that contribute to reducing CO2. Looking ahead at the next steps, we need to recognize that diversity will be the ultimate solution to the significant challenge we are facing.

Moreover, the political situation needs to be clear for steelmakers, so that they can build these plants with the necessary permissions and can have some certainty about staying competitive with what in some cases are completely new technology pathways.

The situation is certainly changing but at a snail’s pace. We have witnessed a lot of changes over the past few years with countries ramping up their pledges to carbon neutrality. In the end, these changes will drive policymaking. 

From today’s viewpoint, it looks daunting, but it is very much possible. Especially if we don’t focus on one solution only. Everyone who is involved in bringing about this change should feel extremely proud.

Anything you would like to share with us and our readers?

It is very important to get young people involved and show them what we can realize with our technology. It is important to encourage them because they feel insecure about their future jobs and are angry because of the impact of climate change. 

I would like to motivate them to pursue metallurgy, industrial processes, and digitalization careers. With SMS group, they have endless possibilities for making a positive impact. We need young people who are happy to work with modern technology and drive the metallurgical industry forward on its path towards decarbonisation. After all, without metals, there’s no future.

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Tanya Rudra
Tanya Rudra
Tanya earned her editorial stripes in the fast-paced world of online journalism, where her passion for sports enthralled a large audience. Having changed continents, she is now using her analytical skills to turn complex technical subjects into stories and articles that are both entertaining and informative.

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All images were taken before the COVID-19 pandemic, or in compliance with social distancing.