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The company believes demand for green steel will grow considerably
An automotive component manufacturer has become the first company in the sector in South Africa to trial “green,” low-carbon steel.
Malben Engineering, a supplier of stampings and welding components to local vehicle original equipment manufacturers (OEMs) for more than five decades, said this is part of an ongoing drive towards long-term environmental solutions, a key focus area for the automotive sector.
Speaking at the milestone handover of the first-ever green steel coil at the company’s Nigel manufacturing facility recently, Operational Director Luca Smargiasso pointed out that the increased use of this cleaner steel and the decarbonisation of the local steel supply chain will be game-changers for the steel and automotive sectors in the years to come.
The green steel coil delivered to Malben Engineering was produced by German steel and technology group Salzgitter AG as part of its SALCOS (Salzgitter Low Carbon Steelmaking) programme, and imported via local steel processor and merchant, Allied Steelrode.
Salzgitter Mannesmann International GmbH facilitates the supply of high-end steel coils from Salzgitter Flachstahl GmbH to core industries such as the automotive sector in overseas markets.
Green partnership forged in steel
The three companies – Malben Engineering, Allied Steelrode and Salzgitter AG – have formed a “strongly aligned, synergistic” partnership over the past few years.
“As pointed out in the Salzgitter AG strategy, decarbonisation of value chains will only succeed by joining forces. Our partnership with Allied Steelrode and Malben Engineering is a great example of exactly this,” said local Salzgitter AG agent Shane Barnard of United Steel.
The partnership’s work over the past 15 months, culminated in the importation and processing of the first-ever green steel coil on the African continent.
The three partners now have the opportunity to evaluate the mechanical and chemical performance of green steel, to compare all the quality-related aspects – from formability to welding, and the identification of potential corrosion issues during transportation – with that of conventional ‘grey’ steel.
According to Barnard, emissions vary from 2.2 to 2.4 tonnes of CO² emitted for every tonne of grey steel produced versus 0.48 tonnes of CO² for each tonne of green steel.
Aggressive demand for green steel projected
Smargiasso believes that global demand for cleansteel will grow considerably, given the growth trajectory for steel consumption in the future.
A recent study shows global steel usage increasing from 1,800 million tonnes per annum in 2020 to 2,800 million tonnes per annum by 2050.
Barnard, however, believes that the growth will be far more aggressive than this.
“This exponential growth – factoring in the differences in CO² emissions between conventional steel and green steel – will fast track the uptake in demand for green steel,” he said.
Barnard believes that the current price gap between grey and green steel will close in the near future, given the prevailing regulation landscape – a view supported by Lee-Ann Geyser, Chief Marketing Officer (Automotive and Contracts) from Allied Steelrode.
“In Europe, which is South Africa’s main automotive trading partner, moves to tax consumers for goods – such as vehicles which have high carbon footprints – will ultimately negate any cost difference, and eventually see green steel being the more cost-effective solution,” Geyser said.
Sustainable sourcing is here
“The road to sustainability has been shorter than initially expected! When we started looking at green steel, it was as a concept only – expected sometime during the next generation only. To the contrary, it has developed so fast – and we see the rising global demand for green steel impacting the entire supply chain,” said Geyser.
She said local automotive (and other) exporters should view the inevitable carbon taxes and border taxes proactively.
“This is no longer just a moral or environmental choice, but a strategic business decision, which incorporates sustainability mandates and corporate sustainability goals. International regulations are pushing all manufacturers, including OEMs, to actively seek more sustainable manufacturing materials.”
The need to reduce emissions
Renai Moothilal, CEO of NAACAM (National Association of Automotive Component and Allied Manufacturers), explained that the South African Automotive Masterplan 2035 (SAAM35) creates a future vision for the industry.
It sets specific development targets which include greater localisation, of which decarbonisation and sustainable sourcing have become important deciding factors.
“All local OEMs have global commitments to reduce supply chain emissions in the next two decades.
“Carbon emissions will become an important element in sourcing decisions.” |
