SteelOrbis talked to GFG Alliance COO Neil Barrell about Liberty’s European operations and their carbon neutral steel production target.
Can you tell us about Liberty’s European operations?
We own seven steel plants across continental Europe, with major integrated steelworks at Ostrava in the Czech Republic and Galaţi in Romania and rolling mills in Skopje (North Macedonia), Piombino (Italy), Dudelange (Luxembourg), and Flemalle and Tilleur in Belgium.
These operations employ over 14,000 people and have a combined annual rolling capacity of over ten million tonnes per annum, making us the fourth largest producer in Europe.
The businesses supply steel products to sectors including construction and infrastructure, mining, automotive, aerospace, sustainable energy, industrial equipment, consumer products as well as white and yellow goods
What can you tell us about the current conditions in the European steel industry? How do you see demand in the domestic market amid all these plant shutdowns and capacity reductions?
As many in the industry have been saying for some time, the European steel market is facing its most significant challenges since 2008 due to the continued high level of imports from outside the EU, many of which are not subject to constantly rising carbon prices; weak demand from the manufacturing sector; political volatility and trade wars; and high input prices.
Earlier this year, Liberty announced investments at some European plants (especially Galati). Can you tell us about the details of these investments?
We have completed the integration programme planning, which has included near-term operational priorities given current market conditions and longer-term investment plans for transformational change. We will be updating stakeholders on the key aspects of those plans soon.
However, we have already invested significant funds into the businesses and started work on a range of initiatives, from restarting or upgrading processing lines to identifying opportunities to install energy-improvement schemes, at each of our sites across Europe.
We know that Liberty is incorporating all of its steel operations. How do you think this will be reflected in your operations and business efficiency?
We are still in the process of developing the Liberty Steel Group strategy but the individual businesses will retain a high degree of autonomy. Its coherent vision and set of business principles will:
• prioritise safety and environmental performance;
• support customers with innovation as well as quality and value;
• demonstrate good governance in dealing with suppliers, workforce and government;
• accommodate the needs of communities by providing a lasting social return.
At the heart of the group’s mission will be an ambition to build on GFG’s existing Greensteel strategy to aim for net carbon neutral status by 2030 - placing Liberty Steel Group on a pathway to become the first carbon neutral steel company in the world.
What do you think about the EU safeguard measures? Do you think they are necessary and sufficient?
We believe the European Commission’s proposed three percent increase on steel imports is an improvement on the previous level, but in the context of falling demand it is still too high.
We know that you welcomed the European Commission’s Green Deal announcement. Can you please inform our readers about Liberty’s carbon neutrality plans?
At the heart of the group’s mission will be an ambition to build on GFG’s ambition to be net carbon neutral by 2030 - which we are calling our CN30 programme - placing Liberty Steel Group on a pathway to become the first carbon neutral steel company in the world. This will include exploration of the best use of new technologies such as hydrogen generated from renewable power to produce steel.
The Greensteel strategy focuses on using electric arc furnaces to recycle scrap steel, rather than producing all material from scratch, as well as using renewable sources of energy. Steel from recycled scrap using fossil fuel-based energy generates less than a third of the CO2 emissions compared with primary steel making, with the benefit dramatically increasing to almost zero emissions with the use of renewable power in Greensteel.
What is your view of the Ilva crisis in Italy? How do you think it will affect the domestic market and the European supply situation overall?
We are obviously monitoring the situation at Ilva and share the concern of the industry about the future of the site and the jobs. However, so far we have noticed little impact from the situation.
What are your expectations for 2020?
We await with interest the EU’s detailed proposals on its Green Deal as we believe it has the potential to create the right framework to support the steel industry’s long-term sustainability. However, it is important that current mechanisms, such as the free allocation of carbon credits and associated compensation schemes, are not just removed without being replaced by others which will support the significant investment which will be required to effect the industry’s transformation.