Decarbonization in Asia has been one of the major topics discussed at the SEAISI conference held on May 18-21 in Singapore. SteelOrbis has collected the major trends in this field, and in short, the importance of decarbonization is now much greater in Asia, though it may face delays, especially in Southeast Asia, due to high costs and the energy crisis.
Yeoh Wee Jin, secretary general of SEAISI, mentioned that decarbonization efforts in the ASEAN-6 are focusing mostly on policy development and the early implementation phase, while the oil crisis is likely to delay decarbonization efforts in the short term. The share of renewable energy is expected to reach 30-35 percent in 2030-2035 in most ASEAN countries, while in Vietnam the target is 50 percent by 2035, as LNG and renewable pathways are expected to phase out coal and decarbonize the power sector. But what is most important in the short term is “the necessity to implement a capacity management framework for the steel industry, which will favor local producers. Also, we need to introduce creative trade measures like those seen in the US and Europe,” Mr. Yeoh Wee Jin said.
In the medium term, no high-emission technologies should be allowed in Southeast Asia, he added. This has already been partially implemented in ASEAN. The Malaysian government has supported only green technologies over the past few years. Owing to this, ESteel Enterprise Sabah launched the first phase of its HBI project (2.5 million mt) in Sabah, eastern Malaysia, in H1 2025. MAEGMA Minerals is also going to install a 2 million mt HBI plant in Lumut, Malaysia, in 2029. The sourcing of cheap and green energy is one of the major challenges.
Antonio Della Pelle from the International Finance Corporation (IFC), a member of the World Bank Group, shared the challenges and opportunities for their DRI project in the Philippines, with a capacity of 2.5 million mt of DRI and 3 million mt of flat steel. He mentioned that even though the project will depend heavily on high-grade iron ore and will require LNG imports in the first stage, “every $1 invested will generate $23 in value over the project lifetime,” Mr. Della Pelle said. “There is a huge demand for small boats and vessels for local transportation and the development of the country, rather than the large ships produced by China or South Korea. The Philippines needs its own flat steel producer,” he added.
Of course, the major challenge for Asian countries in the decarbonization process is how to deal with existing capacities and balance high costs. Bernhard Steenken, Chief Sales Officer at SMS Group, shared information about EASyMelt (Electrically-Assisted Syngas Smelter) technology, which has already started to be implemented at Tata Steel India and which converts traditional, highly polluting blast furnaces into low-carbon ironmaking reactors using syngas. “Tata Steel’s objective is to cut CO2 emissions by more than 50 percent compared to the blast furnace’s baseline operations,” he said.