Energy intensity development of the German iron and steel industry between 1991 and 2007

Abstract

The iron and steel sector is the largest industrial CO₂ emitter and energy consumer in the world. Energy efficiency is key to reduce energy consumption and GHG emissions. To understand future developments of energy use in the steel sector, it is worthwhile to analyze energy efficiency developments over the past two decades. This paper analyses the development of the specific energy consumption (SEC) (measured as primary energy use per unit of product) in the German steel sector between 1991 and 2007. We found that the total SEC declined by 0.4%/year. Of this 75%, or 0.3%/year, is due to a structural change towards more electric arc furnaces (EAF). Energy efficiency improvement accounts for about 25% of the observed change in SEC, or 0.1%/year. Energy efficiency improvements are found, especially in rolling (1.4%/year). The net SEC of blast furnaces decreased due to increased top gas recovery by 0.2%/year per tonne iron. Improvements in other processes were very limited or non-existent. In basic oxygen furnaces (BOF) net SEC increased due to a 60% decrease in BOF gas recovery between 1993 and 2007. In EAF and sinter plants the SEC remained constant or, respectively, even increased by 9% between 1991 and 2007 per tonne sinter.

Introduction

The global iron and steel industry is one of the largest industrial energy consumers and CO₂ emitters. It accounts for about 3–5% of the global CO₂-emissions [1]. Germany is one of the largest steelmaking countries in the world with a production of nearly 44 Million tonnes in 2010, making it the largest steelmaker in Europe and the 7th largest in the world [2].

Energy efficiency is one of the key measures to reduce CO₂-emissions and energy consumption, as well as production costs. Estimating energy performance in the steel industry is a difficult task due to various reasons:

• Data on the energy consumption of the steel industry on an international level is often not accurate. Therefore, estimating energy efficiency in the steel industry in international comparisons is often surrounded with considerable uncertainties, as shown by Farla and Blok (2001) [3].

• Tanaka (2008) [4] studied differences in the assessment of the energy performance in the steel industry. She points out that system boundaries of the analysis strongly influence the results. According to her findings the specific energy consumption (SEC) can vary from 16 to 21 GJ/t crude steel depending on the chosen boundaries.

• Data on the energy consumption in the steel industry is often aggregated at the sector level. Hence, data for the different processes are aggregated, making the calculation of the energy efficiency improvement per process (and over time) not possible.

Studies on energy efficiency in the steel industry can mainly be divided into two groups. First, studies on the comparison of the energy performance of the steel industry on an international level should be mentioned. Worrell et al. (1997) [5] compared the specific energy consumption in selected countries (e.g. Germany, China, Brazil) between 1980 and 1991 using a decomposition method. Kim and Worrell (2002) [6] compared energy and CO₂ intensity in the steel sector among seven countries. Farla et al. (1995) [7] analyzed options for the reduction of CO₂-emissions in industrial processes. Studies by the International Energy Agency (IEA) [e.g. 1] show on a global level energy savings potentials and energy savings technologies. An in-depth description of the production processes in the iron and steel sector, with a particular focus on best available low-emission techniques, may be found in the recent report by the European Commission's Joint Research Centre [8].

Second, a set of studies exists on the energy performance of the steel industry of selected countries. Worrell [9] et al. (2001) identified energy efficiency technologies for the steel industry in the US. Zhang and Wang [10] (2008) analyzed the influence of two energy efficiency technologies for selected steelworks in China between 1990 and 2000 using data on individual steel plants. Wei et al. (2007) [11] analyzed provincial panel data in order to estimate energy efficiency improvements in the Chinese state owned steel plants using the Malmquist Index Decomposition. Ozawa et al. (2002) [12] analyzed the development of the specific energy consumption in the steel industry in Mexico and estimated the effect of structural changes and efficiency improvements using a decomposition method. Price et al. (2010) [13] analyzed China's Top-1000 program which is designed to reduce energy consumption in the largest industrial companies. Price et al. (2011) [14] evaluated Chinas 11th Five Year Plan concerning energy efficiency.

Due to the limited availability of disaggregated energy consumption data, most studies use decomposition methods to estimate the impact of structural changes (e.g. a production shift to an increased share of electric arc furnaces (EAF)), and energy efficiency improvements.

Studies on the energy performance of the German steel sector are rather limited. Lutz et al. (2005) [15] used an integrated bottom-up/top-down approach to simulate policy-induced technological change, quantifying the shift from the BF/BOF (Blast Furnace/Basic Oxygen Furnace) route towards the EAF route as well as price-induced efficiency improvements for both routes. Schumacher and Sands (2007) [16] integrated bottom-up information on iron- and steelmaking technologies in a computable general equilibrium model for Germany to simulate macroeconomic effects of energy policies. Dahlmann et al. (2010) [17] present a factsheet on energy efficiency measures including a list of energy efficiency technologies for each type of plant in the steel sector. Frondel et al. (2010) [18] analyze the specific energy consumption (expressed per tonne of crude steel) in Germany since 1990 using data on the sector level. They mention the influence of an increasing share of the EAF over the BF/BOF route on the reduction of the SEC, but do not evaluate the impact of this development on overall energy use and intensity. Furthermore, the Stahlinstitut VDEh¹ publishes annual reports on CO₂-emissions of the iron and steel industry in Germany. They analyze in detail developments of the energy consumption of single (or groups of) energy carriers per process. However, in recent reports they do not publish the SEC for all energy carriers and processes. The reports (e.g. [19], [20]) also discuss activities to reduce CO₂-emissions (e.g. diffusion of energy efficiency technologies).

To summarize previous analyses we found that studies are restricted to aggregated levels as there is a lack of data on the process level. The conclusions of these studies are restricted to aggregated observations as well, e.g. showing the effect of structural changes on the development of the SEC. Furthermore we did not find any time series of the SEC in the iron and steel sector on the process level. Problems with data consistency occur if data stems form different sources.

In this paper we analyze data of the German Federal Statistical Office² on the energy consumption in the German iron and steel industry between 1991 and 2007. We calculate the SEC per process as primary energy use per unit of product and show the development of the energy efficiency per process in the studied period. As we rely on a single consistent data source and choose a single set of process boundaries we expect accurate results on the development of the SEC, while accounting for the development of energy efficiency in the German iron and steel industry and calculating the impact of an increasing share of EAF.³ First, we give an introduction of the analysis methodology, assumptions and data used for the analysis, followed by a description of the German iron and steel industry. Next, we discuss the development of the SEC by process and for the German iron and steel industry as a whole. We end with discussion and conclusions.