Schneider Electric: Green Hydrogen Ushers in Steel's New Era
For quite some time, British steel has faced numerous challenges.
The anticipated rescue deal of £500m (US$660m) by the UK government for the Port Talbot Steelworks, a Tata-owned enterprise, has not delivered the expected results. The closure of two furnaces is imminent, resulting in a loss of 2,500 jobs. An additional reduction in the workforce by about 300 is predicted in the next three years.
This development is a significant setback for the local communities and the British steel industry, which has been on a downward trajectory. The manufacturing sector's cry for a resurgence emphasises the uphill battle in rejuvenating the steel industry.
However, amid this gloomy situation, manufacturers like Schneider Electric have their sights set on a brighter future. They foresee the dawn of a new era for British Steel, driven by the emergence of green hydrogen, which not only aims to revive the industry but also supports the global objective of a clean energy shift and the creation of eco-friendly employment opportunities.
British steel: A brief history
In the golden era of the late 60s and 70s, steel, the backbone of modern infrastructure, thrived in Britain.
In 1970, Britain ranked as the world's fifth-largest steel producer, with more than 28.3 million tonnes of steel and employing upwards of 320,000 people. The industry was particularly vibrant in the North, including Teesside and Scunthorpe, significantly contributing to job creation and the economy.
The decline of the UK's steel industry was influenced by several factors, including privatisation and lack of subsidies unlike in other countries. Moreover, the high cost of electricity further burdened the steel production process, known for its carbon-heavy nature.
Fast forward to today, the production has plummeted to 5.6 million tonnes, positioning the UK 26th worldwide, with a workforce reduced to 33,500. This drastic reduction highlights the critical situation of manufacturing in the UK, affecting essential sectors like car manufacturing, heavy machinery and shipbuilding.
To combat this downward spiral, innovation and embracing new manufacturing methodologies are pivotal. According to Schneider Electric, the future lies in green initiatives.
Schneider Electric believes in steel's green future
“The steel industry is undergoing significant disruption and transformation on a global scale,” says Alex Richards, Vice President EMEA, Mining Minerals and Metals at Schneider Electric
“For a long time, it has been a critical industry to the UK, so while the news about potential job losses obviously comes as a concern, it is essential to shift our focus from managing decline to seizing opportunities for growth at this pivotal juncture.”
Alex highlights green hydrogen as a cornerstone for sustainable growth.
“Steel is a hard-to-abate industry, but also a key material for our decarbonisation efforts,” he says.
“In order to future-proof steel production in the UK, we need to be looking at adjacent industries that support growth and decarbonisation simultaneously through a transition to green steel.
“One such opportunity is green hydrogen. Green hydrogen enables the production of direct reduced iron (DRI), which in turn can be used to manufacture green steel.
“Producing DRI using green hydrogen can result in over a 95% reduction in CO₂ emissions compared to steel produced with coal. This presents an opportunity to sustain a steel industry with significantly less environmental impact.”
Green hydrogen can create a booming workforce
While sustainability is crucial, it should not compromise the workforce's future.
Alex asserts the role of green hydrogen in generating new manufacturing jobs, emphasizing the balance between tackling climate change and ensuring job creation.
“It's easy to look at news like today’s and worry about the future, but with change comes opportunity,” says Alex.
"By linking the decarbonisation of British steel with the development of green hydrogen, the UK can play a significant role in the global clean energy transition and support the workforce by creating new green jobs.”
The journey towards sustainability, though fraught with difficulties, is imperative for the well-being of the planet and the people.
It necessitates a collaborative effort from policymakers, industry leaders and employers to facilitate a smooth transition for the workforce into more sustainable roles.
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