At the Eurometal Steel Day & YISAD Flat Steel Conference held at Istanbul Marriott Hotel Asia on Tuesday, March 5, in cooperation with SteelOrbis, Uwe Hadwich, global procurement director at Kirchhoff Automotive, talked about carbon emission targets and forecasts for the automotive industry.
Mr. Hadwich first shared some information about Kirchhoff Automotive, which specializes in development and supply of vehicle chassis. He stated that, even though most flat steel is currently produced through basic oxygen furnaces in western Europe, many companies are investing in direct reduced iron and electric arc furnace methods. From 2025-2026, steel producers will initially use natural gas as a reduction agent since the availability of hydrogen is limited due to energy intensity and high prices. According to the Kirchhoff Automotive official, the submerged arc furnace method has advantages over electric arc furnaces due to lower scrap content. About 86 percent of Turkey’s steel production is from recycled steel and that puts Turkey in an advantageous position in terms of decarbonization. Turkey is followed by the US with 70 percent and the EU with 58 percent. Mr. Hadwich said that the two biggest scrap exporters are the US and the EU, and that Turkey was the biggest scrap importer with 21 million mt in 2022. However, with the increase in electric arc furnace investments and DRI usage, scrap flow from the biggest suppliers will change in the future. Thus, DRI usage could help the sector to substitute some of its scrap needs.
Regarding green steel, Hadwich reported that the EU plans to increase the share of green steel in flat steel production to 50 percent by 2030 and that its carbon emissions reduction will reach 30 percent on average by the 2030s because of the fact that companies will have a different carbon footprint. If everything goes according to plan and green hydrogen is available, the EU will reduce carbon emissions by more than 30 percent.
Lastly, the Kirchhoff official evaluated the situation in the automotive industry. He said Europe and North America have recovered from the supply shortages that started due to the pandemic, while petrol cars are in demand again rather than electric cars after the EU governments stopped incentives. Electric vehicles will account for about 30 percent of global output and China will represent 40 percent of total global electric vehicle output. Furthermore, automotive output will decrease in the EU, Japan and South Korea this year, Hadwich predicted.