Toronto – Like some superheroes who channels the power of lightening, Algoma Steel Ink has begun to use the heat cast by arcs of powerful electric currents to create greenery steel.
Electric arch furnaces are not new – technology is more than a century, and Canada already has something – but algoma Last month, by calling the achievement of production from such furnace as a win, it faces an existential threat from the American tariff.
“We have recently reached a really important milestone for the Algoma and Canadian steel industry on the earnings call.” ,
“Despite uncertainty that the trade war is over, this achievement confirms our trust in our change strategy.”
A part of that strategy has been dramatically reduced emissions in an attempt to separate its products; Even it traded the Volta as the name of its cleaner steel, which is planning to produce this low emission iron feed and scrap metal mixture.
But experts say that the project is coming online as a market for green steel, and metal generally, tariffs and value pressure faces the upheaval, it is not clear what the financial benefits can get from the big upfront investment.
“The question is, what will be the demand? Will there be sufficient demand for Green Steel in North America?” Chris Betati said, which researches steel transition as an assistant research partner at the Center of Columbia University on the Global Energy Policy.
“America was starting to move in electric vehicles and start moving quite quickly to do steel and everything under previous administration, but now we have got a full U-turn.”
Steel emission was a priority in the US, and one remains one in Canada, as using coal to produce steel is so intensive. According to the International Energy Agency, globally, steel production makes about eight percent of carbon emissions.
But when it makes sense from an emission point of view, buyers ready to pay premium for more eco-friendly steel are mostly limited to the auto sector, Bayati said.
He said that European vehicle manufacturers are paying more than 40 percent premium for cleaner material, as they can use it for marketing, while only adding slightly to the final cost of a car, but the more important building area is more hesitant, he said.
There is still a demand in Europe, one region Canada has seen to diversify its exports, but due to disintegration with tariffs it is not clear how much capacity there is, trading expert Tomaso Fareti said.
“There is a structural demand in Europe, but to the extent to which will remain in structural demand, it is a big question mark,” said the Assistant Professor at Telphor School of Management, Otawa.
Garcia itself warned that algoma does not see much ability to sell Europe, or internationally elsewhere.
He said, “We can place our steel on Solt Stei. Mary can place it on a ship going into a sea, but can get it for an export customer in Europe or elsewhere, there are no opportunities right now. I don’t think many of those opportunities will move forward, to move forward, to be frank,” they said.
Challenges help explain as to why other major Green Steel Projects in Canada, Hamilton, Arselmormal, are trapped in neutral, Onts, in operations.
The company made a major demonstration to announce in 2022 that it was moving ahead with a $ 1.8 billion project to go to Green Steel-but the final update suggests that the project is still on the engineering stage, a spokesperson confirmed that there are no new meal stones to report.
Batel said that broad oversuply issues in the industry are part of the problem, as is doubtful about policies such as carbon pricing.
“There is some uncertainty about how fast the transition will run. … It is a difficult business to make a deer to be honest.”
Arcelormittal said in its latest stability report in April that he does not expect green steel projects to be affordable by the 2030s, and will require policies to address high capital and operational costs.
Federal and provincial governments in Canada have already stepped into capital costs. Elgoma received $ 420 million to help covers its project’s cost over $ 880 million, while ArcelorMital was offered $ 900 million to help reduce its overall costs.
But unlike algoma, the plans of ArcelorMital include the construction of a plant in Hamilton to remove oxygen from iron ore using hydrogen, rather than coal – a process that remains expensive, leading to many recent projects leading to cancellation.
Arselormital canceled itself two green steel projects in Germany in June, citing high power prices, while last year it noted the future of many of its other European steel projects because “there is a limited desire among customers to pay premiums for low carbon emission steel.”
Cleveland-Cliffs, who bought Hamilton-based Stelco Holdings Inc. last year, recently made plans for green steel conversion at an American plant, which was already a US $ 500 million in government finance.
Lauranco Gonclaves, CEO of Cleveland-Clips, cited the lack of clear hydrogen supply as due to cancellation of the project. He said that on July earnings call, there is a plan to revive the operation using existing resources, including “beautiful coal”, the current generates a very good interaction with the US Energy Department.
Ferreti is concerned that the pressures facing industry mean low investment in research and development to reduce and bring costs.
He said that there is a need to cooperate even more between the public and private sector for the important industry so that a route can be carried forward.
“In fact the real question is that … companies, steel manufacturers, cooperation between Canadian government, and their ability to re -strengthen themselves.”
For Bayti, the path may include using Canada’s vast renewable energy and iron ore deposits so that a direct shortage plant for processing close to the source can be constructed, and then there is already oxygen-less iron shipping worldwide.
“You can triple the value of those exports,” said Bayti.
“So on the one hand we face headwinds and Chinese overcapsity continues, but on the other hand, I think new possibilities are open to shipping green iron places, what you know, we did not consider earlier.”