WEBVTT
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Hello and welcome to Future Energy Insights by the World Future Energy Summit.
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I'm Robin Mills, and today I'm joined by Dr.
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Demetrius Demetriu, Senior Vice President for ESG and Sustainability at M Steel Group, one of the UA's largest industrial and building materials companies.
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Thank you very much for joining us, Demetrius.
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Pleasure to have you here.
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Thank you so much.
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Thank you.
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So I'd like to start by one what I think is one of the M Steel's most interesting initiatives in the field of sustainability and decarbonisation, and that's your Green Steel project.
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Could you tell us a little bit about that?
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The first thing I would say is that before asking whether green steel is ready for the mass market, we need to acknowledge that there is still no universally accepted definition on what green steel actually is.
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So today, different region certification schemes and customers use different methodologies and thresholds to define low-carbon steel, and this creates complexity because of the fragmentation of the different certification schemes between different jurisdictions, and it doesn't help really buyers deciding and committing to green steel purchases.
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It doesn't help investors as well, and lenders commit capital for projects that they lack this uniformity of green steel definitions.
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So we don't really know what green steel is right now.
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So, this is a true barrier: the alignment on standards, carbon accounting methodologies, the different taxonomies between the different regions and frameworks.
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And without this clarity, it's very difficult to create a consistent demand signals and to compare the products based on their carbon embedded carbon emissions.
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The second challenge is bankability.
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So, green steel projects or low-carbon projects are first-of-a-kind projects.
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They are not traditional investments that lenders typically finance that they rely on established markets.
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So, this makes it difficult in terms of risk allocation of these first of a kind projects because you have risks that haven't been encountered in the past.
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These are, for example, regulation, premium long-term offtakes for these products, and as mentioned before, product certification.
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So, cost is certainly part of the equation.
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Everyone knows that it costs more now to produce to dekonize especially heavy industry, which results in a more expensive product coming with a premium.
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However, I don't think this is the biggest challenge.
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The biggest challenge for me is uh the bankability and whether we can create a market structures, policy frameworks, uh, unified uh interoperability between uh the different standards to create these long-term demand signals that will allow green steel investments to become more bankable and scalable.
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So I I think if we just back up a little bit on what green steel actually is.
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So, steel today around the world, it's uh one of the major industrial emitters.
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It's made generally with coal, uh sometimes with natural gas.
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So, in your case, M steel, you operate a very large natural gas-fired uh facility in the Emirate of Abu Dhabi.
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And uh and this, of course, is carbon intensive.
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And we know that decarbonisation of steel along with other heavy industries is a very uh important part of the of the future NG system.
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Um could you tell us what what, in your view, what are some of the major misconceptions that people have about green steel?
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Yeah, thank you for the question.
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Uh you're right, uh, most of the global uh steel uh production or capacity is based on coal, I think more than 70%.
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We are in the bucket of the natural gas DRI producers for the obvious reasons because natural gas is a resource that is available in the UAE.
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With regards to the misconception, I think the largest one is that there is a single technology to decarbonize the steel industry.
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That's not true.
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It's really a portfolio of technologies that you need to look at, and that's exactly what we're doing at Tem Steel.
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Hydrogen is an important part of the solution, but it's not the only part.
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So important technologies that need to be part of this portfolio to decarbonize the steel industry, whether it is it is call-based or natural gas based, or elektric arch furnaces which are typically relying on recycled steel.
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Are obviously as jagged, hydrogen which has a kritiska roll.
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What is not a silver silver bålet and it depends on access to affordable renewable elektricity, storage, transportation and infrastructure and also suportiv market kondition.
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Elektrifikation is equally important.
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Renewable and klin elektricity it's the backbone of dekarbonising stil industry.
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This is particularly important för elektrisk ark förjärnjer on elektricity to smelt to melt iron and producer stil.
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And that's why resycling is also en major part of this transition.
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As you know, steel is one of the most recycled materials in the world.
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And increasing scrap utilisation, metal scrap utilisation, recycled scrap can significance significantly reduce emissions.
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However, the global stel demand continues to grow, meaning that simply scrap, recycled scrap, is simply not enough simply not enough at high quality to and it's not available to meet all these future demands.
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So we need to look beyond electric arc furnace decarbonisation through scrap recycling to decarbonize in integrated routes as well, such as such as natural gas TRI, cold plaster furnaces, etc.
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CCUS carbon capture utilization and storage, carbon capture and storage are important technologies as well, especially for existing assets that complete technology replacement is not feasible.
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So it's a solution that it's really important.
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Efficiency is, I would call it a low-hanging fruit.
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It's the starting point where everyone should start and start, including us.
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So we're looking at improving our efficiency constantly, meaning reducing our reliance on primary and secondary energy sources, fossil fuel sources.
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But you know it's a low-hanging fruit, it takes time, but you know it's important to set targets and start from there.
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It hits both both uh the boxes of uh saving energy, saving cost, and uh reducing your CO2 emissions.
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So, in summary, just to uh kind of go back to your uh your question, the biggest misconception is that still decarbonisation uh has a silver bullet.
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That's not in that's not true.
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There are various technologies, it requires a systems transformation, looking at uh the various different technologies that you can use uh to decarbonize uh the operations.
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Yeah, thanks.
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I think that's a very interesting point that you need the the portfolio and as you say, a systems approach.
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So I I think from the point of VM steel, you mentioned obviously your efforts on efficiency, on scrap recycling, uh, but then two of the of the the methods on uh on the primary production: the um first of all, the uh the Green Steel Project through through using hydrogen, which I'd like to hear more about, and the and the CCUS, the carbon capture, use and storage project, which I I believe you've been operating since 2016, which I think was the world first, right?
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Yes, correct.
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Uh it was 2016.
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Uh we partnered with uh AdNOC and uh we're operating uh the first uh carbon capture utilization and storage uh facility in collaboration with AdNok.
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It has a capacity of uh 800,000 tons, which is quite significant.
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And yeah, as I said, this also set the base for us in order to progress on Artica.
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It's a very important dekarbonisation lever for us.
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It allows us to partly dekarbonise our operations currently.
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But as you said, we're also looking at other important technologiska levers.
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Very recently about a year ago, we started our elektrolysers hitrogän pilot in kollaboration with MASDAR.
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So that's also an important milel for us.
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And it will help us gain the necessary knowledge to allow us to scale up.
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And hoffly the bankability uh issues that we discussed before can all come together so we can uh really scale it to a you know to to a size that will have a significant impact on reducing our CO2 emissions in the future and allow us to produce low carbon steel for this new market.
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Yes, and so I guess just to describe that project that's uh using renewable energy, I guess solar power to to split water to make hydrogen, and you can then replace some of the natural gas in the in the steel process with with hydrogen and therefore zero emissions.
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Correct.
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This is a small-scale project.
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Uh so pilot by definition, it's not a commercial undertaking.
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It allows us to learn on the technical side, as well as other important enablers that we would be required for scaling up such as certification such as testing the market.
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So we have produced, for example, hydrogen ribars through this hydrogen pilot which is connected to our commercial scale directed reduced iron reactor for an net zero mosque that has been recently launched by one of our partners.
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So it's important to test and understand, test the market, test the technology, test the certification and kind of prepare for the scaling up required.
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Yeah, so that, as you mentioned, is a pilot project, but indeed, the scaling up to a commercial project, um, at least initially, whether it's CCS or hydrogen or other methods is gonna cost more.
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Who, in your view, pays for green steel?
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This is a very important uh question in the entire decarbonisation debate.
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Because, yeah, as you say, ultimately someone has to pay for this transition.
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So, today the reality is that producing low carbon steel involves higher costs.
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From because it requires renewable energy, uh hydrogen which comes at a higher cost currently than natural gas, carbon capture technologies, new infrastructure, certification, all these elements add up.
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And the question is how to share this kostal across the value chain.
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So are customers willing to pay more?
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Some are, especially customers from the automotive sector, premium construction are showing more willingness to pay for low carbon materials.
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Also, there is new regulation uh kicking in.
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However, this willingness to pay a significant sustained premium remains limited when it comes, uh especially when we at times when we're facing challenging economic conditions across the globe.
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So, this is uh why I believe the debate should shift away if the customers are kind of ready to pay more.
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On a more important question, in my view, it's whether society values the reduction of carbon emissions enough to create these market mechanisms to recognize and reward low-carbon products.
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So, in summary, I think it's the question is not whether steel producers can pay for decarbonisation, it's whether the entire value chain finds a mechanism to share the cost and value.
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And low-carbon steel or green steel, uh it will not scale through premiums alone.
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It will scale when markets, policies, the financing system, customers align to make this uh low-carbon steel a competitive business proposition.
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Right.
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So, I mean, would it be fair to say then so for the higher cost, although it may be a significantly higher cost for steel, the the addition in the cost of the end product, a car, a bridge, whatever is uh is relatively minor.
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Yeah, for some sectors it's definitely minor.
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You uh for example you gave the uh the automotive industry as an example.
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Uh it's only a small fraction of uh the overall cost of a car.
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Therefore that's why there is more appetite from uh automotive kind of players, to value green steel.
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The kontribution to their overall construction is very small.
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They have very strong korporate commitments on deponising and scope 3 for them.
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It's uh part of it and very important.
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Yeah, and so ultimately as you say, then society pays for this through some kind of mechanism: a carbon price, a carbon trading mechanism, yeah.
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Um green industrial commitments and mandates and targets.
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Um, consumers' willingness to pay more for it for ultimately for a green product.
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Um, these kind of mechanisms, right?
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Yeah, absolutely.
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I think karbon pricing is also a great enabler.
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We've seen that in Europe.
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It's still evolving, it comes with challenges, especially as we said before in uh the current challenging ekonomik konditions.
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However, it's a great enabler to uh to to give some traction uh and make this investment in dekarbonisation which are currently some of them uh not feasible feasible, meaning it will cost less to dekarbonise than pay uh the carbon price for emitting this CO2, yeah.
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Yeah, and indeed that's the the idea of carbon prices, right, to drive this kind of innovation and and enable you to scale up your green solutions and bring down the costs of those.
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Yeah.
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Um so do you think that the challenge on green steel is is it more about technology or is it more about the market?
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Uh I think it's more about the market, not technology.
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There is a plethora of technologies, and uh we talked about pilot projects before.
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Many are testing uh pilots.
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I think we have reached a point where we are more or less comfortable with uh technology, new technology uh adaptation on the pilot scale.
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The main issue is uh bankability, how to create you know to to shift from uh pilot scale into uh larger scale.
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Uh so the main uh issue is not uh as I said technology, yeah.
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Yeah, yeah.
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And uh w you know when we talk about heavy industry, steel is obviously w one of the world's most important heavy industries and a very big emitter.
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There are others, there is also cement, and that's part of your business as well.
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And then there's uh aluminium and and and other heavy industries, um, which are all each of them contribute several percent of global emissions.
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Uh what do you think the lessons are that we can take from the from the the steel industry for the the the bigger picture of decarbonising heavy industry?
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I think we uh uh uh we need to work together, first of all.
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Uh it's not steel, cement, aluminium, chemicals looking at it uh separately.
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Uh they are both, all of them they are uh hard to abate sectors.
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Uh they face uh similar, if not the same, uh challenges with regards to uh decarbonisation and issues, such as access to low-cost renewable electricity, uh, hydrogen availability, carbon capture infrastructure, certification, and long-term demand.
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So these are not unique to steel.
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They are, I would call them, industrial economy challenges.
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Therefore, I think one of the key lessons we can learn from steel, and we have first hand experience in them steel, is that this is not just a technology challenge, it's an ecosystem challenge.
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So having the technology is important, but technology alone doesn't create this bankable investment case.
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So we need to start working together in the form of kind of industrial clusters where we can collaborate with the other industries: aluminum, cement, chemicals to share infrastructure whether this is a carbon capture that can serve all of these industrial clusters and the different sectors, as well as uh hydrogen and other uh technologies such as renewables.
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So this great this way you create efficiencies, and uh, I would say that you hit uh uh two birds with one stone uh effectively.
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Yes.
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Absolutely, and I think that's a trend that we've seen, right, both in Europe and and around this region in the Middle East as well, is this trend for these kind of integrated low carbon clusters which have carbon captured storage infrastructure, they have hydrogen supply, they have renewable electricity, nuclear electricity supply as well.
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Um and decarbonising, as you say, each each industry is a little bit different, has its own needs.
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Um but a lot of those needs are kind of common things that that, as you say, can be shared.
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Yeah, absolutely.
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Um to that point, um the industrial economy is a big part of the UA's uh economic development plans, and and also broadly in the Gulf, if you look at the other Gulf countries are often very also very similar ambitions.
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Um and clearly I think low carbon industry is a big part of that in in building on the Gulf's advantages.
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You know, the Gulf has these advantages like the availability of carbon capture infrastructure and sites, like the growing share of of low-cost renewable electricity, um, like the the the increasing availability of green hydrogen at at internationally competitive prices.
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Um, uh what what do you think?
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Who and what is needed to build that industrial new industrial economy?
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Good question.
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I think uh I believe that the next industrial economy will be built really by those who understand that competitiveness and sustainability are not uh separate agendas.
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And are no longer separate agendas.
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So the winners will not necessarily be the ones that the companies with a single breakthrough technology.
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We talked about the portfolio of technologies you need to rely on, the strategic collaborations the industrial clusters that need to be formed.
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And there is work in the background happening in the UAE on this.
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So there will be companies, investors, and countries that can bring together all this aspers: teknalig, infrastructure, kapital and demand.
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Ja, because this is also an important element of the industrial klasters that it can also bridge supply demand and demand into a koherent industrial ECOSystem.
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Så ja, all this various technologies that we discussed before will have a key roll to play.
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Bad also infrastructure financing connecting the different industrial ecosystems into one ekosystem that they can suppy clean energy.
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Also, circular is an important point, which is also sometimes underestimated, which is a potential benefit of having industrial clusters so each of the different sectors can recycle materials.
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Just to summarize, the the next industrial economy won't be built by one break of the technology.
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It will be built by ecosystems that connect clean energy, hydrogen, CCUS, circularity.
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We didn't really talk about AI, but this is also becoming very important as well in its role.
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It's AI is not a decarbonization technology by itself.
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But it's a great enabler to help optimize energy use, reduce waste, improve operational efficiencies, so it will also have a key role to play.
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In many cases, as you know, the cheapest tone of carbon is the tone you never emit in the first place.
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So the winners in this industrial economy will be the ones that bring all these elements together.
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Yes, I think that's very important.
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You mentioned the industrial infrastructure, physical infrastructure, but there's also kind of scientific and intellectual infrastructure, right?
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So the research side, the um the knowledge building, you mentioned AI as an important enabler as well.
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Um, so all that kind of integration.
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So, what do you see as the UA's role in building this low-carbon, this new low-carbon uh energy industrial system?
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Uh I think the UAE has uh a genuine opportunity, uh and it has several unique advantages that other countries don't have.
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It has a strong industrial base, uh, relatively young, but uh it's uh it's uh it has become very strong.
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Uh world-class infrastructure, uh, excellent logistics connectivity and a proven ability to deliver large-scale projects whether it's infrastructure or industry.
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Second, it has access to some of the world's uh, let's say, lowest renewable energy energy and resources, which is you know it's critical to decarbonisation, that's where it all starts.
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So, another thing that it's great about the UAE is that it has a pragmatic approach towards decarbonisation and the energy transition.
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It's not one size uh fits all.
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It looks at the combination of these different technologies to reach there.
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And that flexibility is very important because industrial decarbonisation it's too complex to be done by just a single approach.
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So I think there has been great progress in the country with regards to uh reaching the you know decarbonising and becoming a global platform for industrial innovation as well.
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And uh in summary, I think it will take a leading role, that's my view, in combining all these elements: uh clean energy, industrial capability, uh capital and technology partnerships, and uh this will help build the next generation of uh industrial competitiveness, and I see UAE being very well positioned uh towards uh meeting that goal.
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Right.
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So we've talked a bit about the UA, of course, its role there.
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We mentioned a bit about Europe and uh the carbon market and the importance of Europe, I guess, as a consumer of green or an importer of green products.
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Yeah.
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Um, but of course, there are there are many other countries involved in these these green industrial efforts.
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What kind of industrial cooperation do you think is required internationally to make this happen?
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I think first of all, uh the transition cannot happen without international kollaboration.
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That's uh that's very very key.
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And that's the approach that the UAE is taking with regards to strategic kollaborations.
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You see many partnerships have been uh formed in the UAE whether it's on the technology side or other parts of the value chain.
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So, the heavy industry operates in a global value chain.
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So, for example, steel producers, technology providers, investors the financing and energy developers and regulators are all interconnected.
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So there is no single company, country, or industry that can solve this challenge alone.
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Collaboration is very important.
00:26:09.839 --> 00:26:24.240
And from an MSTL point of view, and from our perspective, what we need from, for example, global technology companies is a partnership, and we've been very open on that.
00:26:25.039 --> 00:26:34.559
We mentioned before various collaborations we have with ADNOC and Mazdar on the adaption of clean energy to decarbonize our assets.
00:26:34.799 --> 00:26:50.640
But we're also very open into collaborating with technology players on innovation for technologies that can have an impact in the future on achieving our decarbonisation targets and goals.
00:26:50.960 --> 00:27:00.079
Of course, these technologies need to be piloted, but they also need to be commercially scalable.
00:27:00.720 --> 00:27:12.400
So it you know we need to have kind of a line of sight on their scalability, their feasibility, and their ability to reduce our emissions at a large scale.
00:27:12.640 --> 00:27:21.279
So, in short, decarbonising uh heavy industry is not a competition between countries or companies, it's all about collaboration.
00:27:21.680 --> 00:27:39.039
Uh, we need, as I said before, common standards, shared infrastructure, stronger partnerships, and a globally aligned market if we want this uh low-carbon industry to scale at a pace that uh you know uh the world is expecting.
00:27:39.680 --> 00:27:46.799
Yes, no, I think that's for me that's one of the very interesting things about all this is the the international collaboration and and also its diversity, right?
00:27:46.960 --> 00:27:53.039
So in this region, the UA is an important player, but also, of course, in in different aspects of green industry.
00:27:53.119 --> 00:28:06.160
Uh you have Oman, you have you have Egypt, you have Saudi Arabia all doing different things in in green hydrogen, for example, as well as green industry and carbon capture and storage, European carbon capture and storage hubs are you know, important example.
00:28:06.240 --> 00:28:08.160
They're now they're now starting to emerge.
00:28:08.319 --> 00:28:11.200
Um, Canada are an important player in CCS as well.
00:28:11.440 --> 00:28:14.720
And then, of course, in the bigger industrial picture, you have you have China.
00:28:15.119 --> 00:28:24.000
Absolutely, we haven't spoken much about China, but you know, a huge player if you speak at almost any clean energy technology, um, and certainly as a steel producer and and consumer.
00:28:24.160 --> 00:28:28.880
Um, and then we didn't also speak much about the supply chain, but you have the the um the raw materials, right?
00:28:28.960 --> 00:28:33.119
The supply of high grade iron ore from various countries for your process.
00:28:33.279 --> 00:28:33.359
Yeah.
00:28:33.519 --> 00:28:45.119
Um so that that's one of the things that strikes me as very interesting, is how do you bring all of these different international players to together and make the best use of their different natural advantages and their and the skills that they've developed.
00:28:45.839 --> 00:28:47.279
Yeah, that's a good point.
00:28:47.519 --> 00:28:50.720
Uh as I said, we are open uh first of all.
00:28:51.680 --> 00:29:11.920
The first uh step is to be open to collaboration and uh and align with uh align with the concept that you know only through strategic collaborations you'll be able to to you know to meet a goal because of the interconnectivity of uh the supply chains.
00:29:13.839 --> 00:29:30.240
This is kind of uh as we discussed before, a key uh ingredient in the way that the UAE uh does business and uh which cascades down also to the different uh national champions such as uh M Steele.
00:29:30.720 --> 00:29:49.680
So most of the uh projects that we're doing, some of them are public, some of them are still at a stage where we can't disclose uh much information, are based on this concept of strategic collaborations with uh iron ore suppliers.
00:29:49.839 --> 00:30:02.160
As you know, in the UAE there is no iron ore resources, so we will have to rely on strong partnerships on that, uh, as well as the end markets, especially when it has to do with uh low-carbon steel.
00:30:02.799 --> 00:30:15.039
Uh it's important to uh have uh long-term commitments and partnerships on the demand side as well to de-risk such projects.
00:30:15.359 --> 00:30:19.200
Yeah, and you mentioned the local industrial ecosystem here in the UA.
00:30:19.359 --> 00:30:20.880
I think that's very important too, right?
00:30:21.039 --> 00:30:30.559
So you have the collaboration with AdNok on the carbon capture, you have the collaboration with Mastar on the green hydrogen, and of course, also a provider of renewable electricity.
00:30:30.720 --> 00:30:39.359
Um, and then you have the the other key industrial entities in the UA, um, some of them are on their own decarbonisation journey, like aluminium and chemicals.
00:30:39.440 --> 00:30:44.720
Um, you have the power industry, of course, the uh the the but the both the renewable and the nuclear power.
00:30:44.880 --> 00:30:51.519
Um, so that I guess the kind of integration and those relationships between the different main UA players are very important.
00:30:52.160 --> 00:30:54.079
Yeah, it's uh absolutely important.
00:30:54.880 --> 00:30:58.720
We we discussed before about the concept of industrial clusters.
00:30:58.880 --> 00:30:59.920
I think that's key.
00:31:00.160 --> 00:31:14.960
It's key because it can bring all these players together that can uh leverage a certain infrastructure when it has to do uh with uh common carbon capture and utilisation infrastructure.
00:31:15.119 --> 00:31:24.720
Uh hydrogen, which is not only a steel uh enabler, a technology enabler, it's also an enabler in the chemikals uh uh industry.
00:31:26.240 --> 00:31:31.519
So yeah, it's really important to work uh towards this uh this approach.
00:31:31.680 --> 00:31:38.799
It will create efficiencies and it will also bridge the supply and demand of uh clean elektricity.
00:31:39.119 --> 00:31:39.519
Yeah.
00:31:40.480 --> 00:31:43.920
So maybe gives give gives a bit of the vision now.
00:31:44.079 --> 00:31:49.759
If all these initiatives are successful, if we make good progress on on the technology and and the the market.
00:31:50.000 --> 00:31:55.119
What is the steel industry in in 10 years' time, let's say 2035, what does that look like to you?
00:31:55.440 --> 00:32:07.359
Uh I think uh okay, I don't have the crystal ball, but if I had to guess, uh I think that the steel industry will look different in 2035, and I hope it looks different.
00:32:07.440 --> 00:32:10.799
Uh, although there has been significant progress already.
00:32:11.039 --> 00:32:17.039
Uh first, I don't think there will be a single dominant uh technology as we discussed before.
00:32:17.279 --> 00:32:34.400
There will be uh different regions, regions adapting different pathways depending on access to the various enablers such as renewable energy, natural gas, scrap availability, carbon capture and regulatory frameworks.
00:32:35.200 --> 00:32:46.640
I think perhaps hydrogen uh will become an important part, but it's not it's not gonna be uh the only solution.
00:32:46.720 --> 00:32:48.559
It's gonna be part of the toolkit.
00:32:50.240 --> 00:32:58.000
I expect technologies such as recycling and circularity to play to play a much uh let's say a larger role.
00:32:59.599 --> 00:33:06.480
Electrification and energy uh efficiency will continue to improve uh across the value chain.
00:33:07.920 --> 00:33:21.279
So, yeah, uh as for the market and the premiums, I hope uh by 2035 we will no longer be talking about green steel as a premium in the way we talk today.
00:33:21.440 --> 00:33:49.680
Yeah, uh we uh I hope that we uh will create uh low carbon steel uh as the competitive choice, not an is choice, meaning that uh the technologies will be mature, the supply chains will be developed, uh the carbon-related regulations will become widespread and unified, and we will see the cost gap narrowing significantly.
00:33:49.920 --> 00:33:58.559
So, just in summary, I think by 2035 the biggest challenge may not be the different uh technologies, it's not a technology race.
00:33:58.880 --> 00:34:05.119
Uh it may be that carbon becomes a standard uh product uh attribute.
00:34:05.279 --> 00:34:13.679
Customers will accept to expect to know the emissions footprint of steel just as they expect to know that its quality, performance, and price today.
00:34:14.000 --> 00:34:20.880
That's my uh kind of uh vision of uh uh green steel market in 2035.
00:34:21.360 --> 00:34:21.679
Yeah.
00:34:22.239 --> 00:34:23.199
Well, that's a great vision.
00:34:23.440 --> 00:34:36.559
I think the vision where green steel is readily available and the and the cost of it is uh the cost premiums come down, yeah, and the markets are there and the carbon regulations are there to support that and and help consumers make the the low carbon choice.
00:34:37.119 --> 00:34:38.000
Yeah, absolutely.
00:34:39.440 --> 00:34:41.119
So thank you very very much, uh Dr.
00:34:41.199 --> 00:34:41.679
Demetrius.
00:34:42.000 --> 00:34:53.440
A really fascinating conversation and getting into one of the key, uh the biggest and and and trickiest and like most complicated industrial challenges in in delivering this as low-carbon industrial economy.
00:34:53.599 --> 00:34:57.760
Uh, and really good to hear from somebody who is actually involved in uh day day by day in delivering this.
00:34:58.400 --> 00:34:58.880
Thank you so much.
00:34:59.119 --> 00:34:59.280
Thank you.
00:34:59.360 --> 00:35:00.239
It was great to talk to you.
00:35:00.960 --> 00:35:01.119
Thank you.
00:35:02.719 --> 00:35:08.000
So thank you for joining us for this edition of Future Energy Insights with the World Future Energy Summit.
00:35:08.719 --> 00:35:11.039
And we look forward to also seeing you in person.
00:35:11.360 --> 00:35:17.039
Please do join us for the World Future Energy Summit in Abu Dhabi between the twelfth and fourteenth of January twenty twenty seven.
00:35:17.840 --> 00:35:18.079
Thank you.
00:00:07.599 --> 00:00:11.359
Hello and welcome to Future Energy Insights by the World Future Energy Summit.
00:00:11.759 --> 00:00:14.400
I'm Robin Mills, and today I'm joined by Dr.
00:00:14.480 --> 00:00:23.120
Demetrius Demetriu, Senior Vice President for ESG and Sustainability at M Steel Group, one of the UA's largest industrial and building materials companies.
00:00:23.600 --> 00:00:25.519
Thank you very much for joining us, Demetrius.
00:00:26.079 --> 00:00:26.719
Pleasure to have you here.
00:00:27.199 --> 00:00:27.760
Thank you so much.
00:00:27.839 --> 00:00:28.000
Thank you.
00:00:28.640 --> 00:00:38.960
So I'd like to start by one what I think is one of the M Steel's most interesting initiatives in the field of sustainability and decarbonisation, and that's your Green Steel project.
00:00:39.520 --> 00:00:40.960
Could you tell us a little bit about that?
00:00:42.479 --> 00:00:53.520
The first thing I would say is that before asking whether green steel is ready for the mass market, we need to acknowledge that there is still no universally accepted definition on what green steel actually is.
00:00:53.920 --> 00:01:17.120
So today, different region certification schemes and customers use different methodologies and thresholds to define low-carbon steel, and this creates complexity because of the fragmentation of the different certification schemes between different jurisdictions, and it doesn't help really buyers deciding and committing to green steel purchases.
00:01:17.599 --> 00:01:29.200
It doesn't help investors as well, and lenders commit capital for projects that they lack this uniformity of green steel definitions.
00:01:29.359 --> 00:01:32.079
So we don't really know what green steel is right now.
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So, this is a true barrier: the alignment on standards, carbon accounting methodologies, the different taxonomies between the different regions and frameworks.
00:01:42.319 --> 00:01:52.560
And without this clarity, it's very difficult to create a consistent demand signals and to compare the products based on their carbon embedded carbon emissions.
00:01:52.799 --> 00:01:55.359
The second challenge is bankability.
00:01:56.000 --> 00:02:02.640
So, green steel projects or low-carbon projects are first-of-a-kind projects.
00:02:03.040 --> 00:02:10.479
They are not traditional investments that lenders typically finance that they rely on established markets.
00:02:11.599 --> 00:02:23.439
So, this makes it difficult in terms of risk allocation of these first of a kind projects because you have risks that haven't been encountered in the past.
00:02:23.599 --> 00:02:36.159
These are, for example, regulation, premium long-term offtakes for these products, and as mentioned before, product certification.
00:02:36.639 --> 00:02:39.120
So, cost is certainly part of the equation.
00:02:39.360 --> 00:02:50.319
Everyone knows that it costs more now to produce to dekonize especially heavy industry, which results in a more expensive product coming with a premium.
00:02:50.960 --> 00:02:55.039
However, I don't think this is the biggest challenge.
00:02:55.360 --> 00:03:17.120
The biggest challenge for me is uh the bankability and whether we can create a market structures, policy frameworks, uh, unified uh interoperability between uh the different standards to create these long-term demand signals that will allow green steel investments to become more bankable and scalable.
00:03:17.439 --> 00:03:21.360
So I I think if we just back up a little bit on what green steel actually is.
00:03:21.520 --> 00:03:25.919
So, steel today around the world, it's uh one of the major industrial emitters.
00:03:26.159 --> 00:03:29.199
It's made generally with coal, uh sometimes with natural gas.
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So, in your case, M steel, you operate a very large natural gas-fired uh facility in the Emirate of Abu Dhabi.
00:03:36.719 --> 00:03:39.840
And uh and this, of course, is carbon intensive.
00:03:40.080 --> 00:03:46.479
And we know that decarbonisation of steel along with other heavy industries is a very uh important part of the of the future NG system.
00:03:47.199 --> 00:03:52.639
Um could you tell us what what, in your view, what are some of the major misconceptions that people have about green steel?
00:03:52.960 --> 00:03:54.240
Yeah, thank you for the question.
00:03:54.400 --> 00:04:03.199
Uh you're right, uh, most of the global uh steel uh production or capacity is based on coal, I think more than 70%.
00:04:03.919 --> 00:04:14.400
We are in the bucket of the natural gas DRI producers for the obvious reasons because natural gas is a resource that is available in the UAE.
00:04:14.719 --> 00:04:24.639
With regards to the misconception, I think the largest one is that there is a single technology to decarbonize the steel industry.
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That's not true.
00:04:27.279 --> 00:04:35.279
It's really a portfolio of technologies that you need to look at, and that's exactly what we're doing at Tem Steel.
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Hydrogen is an important part of the solution, but it's not the only part.
00:04:43.279 --> 00:05:00.560
So important technologies that need to be part of this portfolio to decarbonize the steel industry, whether it is it is call-based or natural gas based, or elektric arch furnaces which are typically relying on recycled steel.
00:05:01.360 --> 00:05:05.279
Are obviously as jagged, hydrogen which has a kritiska roll.
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What is not a silver silver bålet and it depends on access to affordable renewable elektricity, storage, transportation and infrastructure and also suportiv market kondition.
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Elektrifikation is equally important.
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Renewable and klin elektricity it's the backbone of dekarbonising stil industry.
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This is particularly important för elektrisk ark förjärnjer on elektricity to smelt to melt iron and producer stil.
00:05:39.360 --> 00:05:43.040
And that's why resycling is also en major part of this transition.
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As you know, steel is one of the most recycled materials in the world.
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And increasing scrap utilisation, metal scrap utilisation, recycled scrap can significance significantly reduce emissions.
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However, the global stel demand continues to grow, meaning that simply scrap, recycled scrap, is simply not enough simply not enough at high quality to and it's not available to meet all these future demands.
00:06:14.560 --> 00:06:27.600
So we need to look beyond electric arc furnace decarbonisation through scrap recycling to decarbonize in integrated routes as well, such as such as natural gas TRI, cold plaster furnaces, etc.
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CCUS carbon capture utilization and storage, carbon capture and storage are important technologies as well, especially for existing assets that complete technology replacement is not feasible.
00:06:45.439 --> 00:06:49.839
So it's a solution that it's really important.
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Efficiency is, I would call it a low-hanging fruit.
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It's the starting point where everyone should start and start, including us.
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So we're looking at improving our efficiency constantly, meaning reducing our reliance on primary and secondary energy sources, fossil fuel sources.
00:07:13.519 --> 00:07:20.240
But you know it's a low-hanging fruit, it takes time, but you know it's important to set targets and start from there.
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It hits both both uh the boxes of uh saving energy, saving cost, and uh reducing your CO2 emissions.
00:07:29.439 --> 00:07:40.319
So, in summary, just to uh kind of go back to your uh your question, the biggest misconception is that still decarbonisation uh has a silver bullet.
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That's not in that's not true.
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There are various technologies, it requires a systems transformation, looking at uh the various different technologies that you can use uh to decarbonize uh the operations.
00:07:54.079 --> 00:07:54.560
Yeah, thanks.
00:07:54.800 --> 00:07:59.920
I think that's a very interesting point that you need the the portfolio and as you say, a systems approach.
00:08:00.160 --> 00:08:25.519
So I I think from the point of VM steel, you mentioned obviously your efforts on efficiency, on scrap recycling, uh, but then two of the of the the methods on uh on the primary production: the um first of all, the uh the Green Steel Project through through using hydrogen, which I'd like to hear more about, and the and the CCUS, the carbon capture, use and storage project, which I I believe you've been operating since 2016, which I think was the world first, right?
00:08:25.839 --> 00:08:26.560
Yes, correct.
00:08:26.639 --> 00:08:28.480
Uh it was 2016.
00:08:28.720 --> 00:08:40.399
Uh we partnered with uh AdNOC and uh we're operating uh the first uh carbon capture utilization and storage uh facility in collaboration with AdNok.
00:08:40.960 --> 00:08:45.759
It has a capacity of uh 800,000 tons, which is quite significant.
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And yeah, as I said, this also set the base for us in order to progress on Artica.
00:08:56.080 --> 00:08:59.360
It's a very important dekarbonisation lever for us.
00:08:59.840 --> 00:09:04.159
It allows us to partly dekarbonise our operations currently.
00:09:04.559 --> 00:09:09.039
But as you said, we're also looking at other important technologiska levers.
00:09:09.840 --> 00:09:22.080
Very recently about a year ago, we started our elektrolysers hitrogän pilot in kollaboration with MASDAR.
00:09:22.159 --> 00:09:25.840
So that's also an important milel for us.
00:09:26.080 --> 00:09:33.039
And it will help us gain the necessary knowledge to allow us to scale up.
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And hoffly the bankability uh issues that we discussed before can all come together so we can uh really scale it to a you know to to a size that will have a significant impact on reducing our CO2 emissions in the future and allow us to produce low carbon steel for this new market.
00:09:54.799 --> 00:10:09.759
Yes, and so I guess just to describe that project that's uh using renewable energy, I guess solar power to to split water to make hydrogen, and you can then replace some of the natural gas in the in the steel process with with hydrogen and therefore zero emissions.
00:10:10.399 --> 00:10:10.879
Correct.
00:10:12.080 --> 00:10:14.000
This is a small-scale project.
00:10:14.159 --> 00:10:18.720
Uh so pilot by definition, it's not a commercial undertaking.
00:10:19.440 --> 00:10:31.759
It allows us to learn on the technical side, as well as other important enablers that we would be required for scaling up such as certification such as testing the market.
00:10:32.639 --> 00:10:53.120
So we have produced, for example, hydrogen ribars through this hydrogen pilot which is connected to our commercial scale directed reduced iron reactor for an net zero mosque that has been recently launched by one of our partners.
00:10:54.000 --> 00:11:03.919
So it's important to test and understand, test the market, test the technology, test the certification and kind of prepare for the scaling up required.
00:11:04.639 --> 00:11:15.200
Yeah, so that, as you mentioned, is a pilot project, but indeed, the scaling up to a commercial project, um, at least initially, whether it's CCS or hydrogen or other methods is gonna cost more.
00:11:15.600 --> 00:11:18.879
Who, in your view, pays for green steel?
00:11:19.519 --> 00:11:25.840
This is a very important uh question in the entire decarbonisation debate.
00:11:26.320 --> 00:11:30.480
Because, yeah, as you say, ultimately someone has to pay for this transition.
00:11:30.720 --> 00:11:35.679
So, today the reality is that producing low carbon steel involves higher costs.
00:11:37.279 --> 00:11:53.360
From because it requires renewable energy, uh hydrogen which comes at a higher cost currently than natural gas, carbon capture technologies, new infrastructure, certification, all these elements add up.
00:11:54.480 --> 00:11:59.600
And the question is how to share this kostal across the value chain.
00:11:59.759 --> 00:12:02.080
So are customers willing to pay more?
00:12:02.559 --> 00:12:14.080
Some are, especially customers from the automotive sector, premium construction are showing more willingness to pay for low carbon materials.
00:12:14.159 --> 00:12:17.279
Also, there is new regulation uh kicking in.
00:12:17.679 --> 00:12:33.440
However, this willingness to pay a significant sustained premium remains limited when it comes, uh especially when we at times when we're facing challenging economic conditions across the globe.
00:12:33.919 --> 00:12:43.200
So, this is uh why I believe the debate should shift away if the customers are kind of ready to pay more.
00:12:44.399 --> 00:12:58.080
On a more important question, in my view, it's whether society values the reduction of carbon emissions enough to create these market mechanisms to recognize and reward low-carbon products.
00:12:58.480 --> 00:13:09.919
So, in summary, I think it's the question is not whether steel producers can pay for decarbonisation, it's whether the entire value chain finds a mechanism to share the cost and value.
00:13:10.320 --> 00:13:16.879
And low-carbon steel or green steel, uh it will not scale through premiums alone.
00:13:17.120 --> 00:13:27.679
It will scale when markets, policies, the financing system, customers align to make this uh low-carbon steel a competitive business proposition.
00:13:28.159 --> 00:13:28.559
Right.
00:13:28.799 --> 00:13:44.080
So, I mean, would it be fair to say then so for the higher cost, although it may be a significantly higher cost for steel, the the addition in the cost of the end product, a car, a bridge, whatever is uh is relatively minor.
00:13:44.399 --> 00:13:46.879
Yeah, for some sectors it's definitely minor.
00:13:46.960 --> 00:13:53.440
You uh for example you gave the uh the automotive industry as an example.
00:13:53.600 --> 00:13:57.840
Uh it's only a small fraction of uh the overall cost of a car.
00:13:58.080 --> 00:14:09.759
Therefore that's why there is more appetite from uh automotive kind of players, to value green steel.
00:14:11.919 --> 00:14:15.120
The kontribution to their overall construction is very small.
00:14:15.279 --> 00:14:20.240
They have very strong korporate commitments on deponising and scope 3 for them.
00:14:20.720 --> 00:14:23.360
It's uh part of it and very important.
00:14:24.159 --> 00:14:33.200
Yeah, and so ultimately as you say, then society pays for this through some kind of mechanism: a carbon price, a carbon trading mechanism, yeah.
00:14:33.360 --> 00:14:38.639
Um green industrial commitments and mandates and targets.
00:14:38.799 --> 00:14:43.120
Um, consumers' willingness to pay more for it for ultimately for a green product.
00:14:43.200 --> 00:14:45.200
Um, these kind of mechanisms, right?
00:14:45.519 --> 00:14:46.559
Yeah, absolutely.
00:14:46.720 --> 00:14:50.799
I think karbon pricing is also a great enabler.
00:14:51.840 --> 00:14:53.440
We've seen that in Europe.
00:14:54.240 --> 00:15:02.320
It's still evolving, it comes with challenges, especially as we said before in uh the current challenging ekonomik konditions.
00:15:03.039 --> 00:15:27.759
However, it's a great enabler to uh to to give some traction uh and make this investment in dekarbonisation which are currently some of them uh not feasible feasible, meaning it will cost less to dekarbonise than pay uh the carbon price for emitting this CO2, yeah.
00:15:28.080 --> 00:15:37.039
Yeah, and indeed that's the the idea of carbon prices, right, to drive this kind of innovation and and enable you to scale up your green solutions and bring down the costs of those.
00:15:37.120 --> 00:15:37.440
Yeah.
00:15:37.679 --> 00:15:43.919
Um so do you think that the challenge on green steel is is it more about technology or is it more about the market?
00:15:44.960 --> 00:15:48.240
Uh I think it's more about the market, not technology.
00:15:48.399 --> 00:15:53.679
There is a plethora of technologies, and uh we talked about pilot projects before.
00:15:54.000 --> 00:15:56.240
Many are testing uh pilots.
00:15:56.559 --> 00:16:08.159
I think we have reached a point where we are more or less comfortable with uh technology, new technology uh adaptation on the pilot scale.
00:16:08.399 --> 00:16:18.240
The main issue is uh bankability, how to create you know to to shift from uh pilot scale into uh larger scale.
00:16:18.480 --> 00:16:24.159
Uh so the main uh issue is not uh as I said technology, yeah.
00:16:24.799 --> 00:16:25.440
Yeah, yeah.
00:16:26.320 --> 00:16:33.600
And uh w you know when we talk about heavy industry, steel is obviously w one of the world's most important heavy industries and a very big emitter.
00:16:33.919 --> 00:16:37.200
There are others, there is also cement, and that's part of your business as well.
00:16:37.600 --> 00:16:45.440
And then there's uh aluminium and and and other heavy industries, um, which are all each of them contribute several percent of global emissions.
00:16:45.840 --> 00:16:53.519
Uh what do you think the lessons are that we can take from the from the the steel industry for the the the bigger picture of decarbonising heavy industry?
00:16:54.000 --> 00:16:58.879
I think we uh uh uh we need to work together, first of all.
00:16:59.039 --> 00:17:04.799
Uh it's not steel, cement, aluminium, chemicals looking at it uh separately.
00:17:04.960 --> 00:17:08.960
Uh they are both, all of them they are uh hard to abate sectors.
00:17:09.119 --> 00:17:29.759
Uh they face uh similar, if not the same, uh challenges with regards to uh decarbonisation and issues, such as access to low-cost renewable electricity, uh, hydrogen availability, carbon capture infrastructure, certification, and long-term demand.
00:17:29.920 --> 00:17:32.000
So these are not unique to steel.
00:17:32.559 --> 00:17:36.640
They are, I would call them, industrial economy challenges.
00:17:37.039 --> 00:17:51.519
Therefore, I think one of the key lessons we can learn from steel, and we have first hand experience in them steel, is that this is not just a technology challenge, it's an ecosystem challenge.
00:17:52.160 --> 00:17:58.799
So having the technology is important, but technology alone doesn't create this bankable investment case.
00:17:59.359 --> 00:18:30.640
So we need to start working together in the form of kind of industrial clusters where we can collaborate with the other industries: aluminum, cement, chemicals to share infrastructure whether this is a carbon capture that can serve all of these industrial clusters and the different sectors, as well as uh hydrogen and other uh technologies such as renewables.
00:18:30.960 --> 00:18:41.440
So this great this way you create efficiencies, and uh, I would say that you hit uh uh two birds with one stone uh effectively.
00:18:41.759 --> 00:18:42.160
Yes.
00:18:42.799 --> 00:18:59.920
Absolutely, and I think that's a trend that we've seen, right, both in Europe and and around this region in the Middle East as well, is this trend for these kind of integrated low carbon clusters which have carbon captured storage infrastructure, they have hydrogen supply, they have renewable electricity, nuclear electricity supply as well.
00:19:00.400 --> 00:19:05.039
Um and decarbonising, as you say, each each industry is a little bit different, has its own needs.
00:19:05.119 --> 00:19:09.200
Um but a lot of those needs are kind of common things that that, as you say, can be shared.
00:19:09.680 --> 00:19:10.720
Yeah, absolutely.
00:19:12.960 --> 00:19:27.519
Um to that point, um the industrial economy is a big part of the UA's uh economic development plans, and and also broadly in the Gulf, if you look at the other Gulf countries are often very also very similar ambitions.
00:19:28.000 --> 00:19:34.000
Um and clearly I think low carbon industry is a big part of that in in building on the Gulf's advantages.
00:19:34.160 --> 00:19:49.440
You know, the Gulf has these advantages like the availability of carbon capture infrastructure and sites, like the growing share of of low-cost renewable electricity, um, like the the the increasing availability of green hydrogen at at internationally competitive prices.
00:19:49.839 --> 00:19:52.400
Um, uh what what do you think?
00:19:52.640 --> 00:19:56.799
Who and what is needed to build that industrial new industrial economy?
00:19:58.480 --> 00:19:59.200
Good question.
00:19:59.359 --> 00:20:10.880
I think uh I believe that the next industrial economy will be built really by those who understand that competitiveness and sustainability are not uh separate agendas.
00:20:12.480 --> 00:20:15.039
And are no longer separate agendas.
00:20:15.119 --> 00:20:21.759
So the winners will not necessarily be the ones that the companies with a single breakthrough technology.
00:20:22.480 --> 00:20:31.680
We talked about the portfolio of technologies you need to rely on, the strategic collaborations the industrial clusters that need to be formed.
00:20:31.839 --> 00:20:35.839
And there is work in the background happening in the UAE on this.
00:20:36.160 --> 00:20:44.960
So there will be companies, investors, and countries that can bring together all this aspers: teknalig, infrastructure, kapital and demand.
00:20:45.359 --> 00:20:59.279
Ja, because this is also an important element of the industrial klasters that it can also bridge supply demand and demand into a koherent industrial ECOSystem.
00:21:01.039 --> 00:21:05.599
Så ja, all this various technologies that we discussed before will have a key roll to play.
00:21:05.680 --> 00:21:21.599
Bad also infrastructure financing connecting the different industrial ecosystems into one ekosystem that they can suppy clean energy.
00:21:22.400 --> 00:21:38.079
Also, circular is an important point, which is also sometimes underestimated, which is a potential benefit of having industrial clusters so each of the different sectors can recycle materials.
00:21:38.720 --> 00:21:44.480
Just to summarize, the the next industrial economy won't be built by one break of the technology.
00:21:44.720 --> 00:21:50.640
It will be built by ecosystems that connect clean energy, hydrogen, CCUS, circularity.
00:21:51.119 --> 00:21:56.000
We didn't really talk about AI, but this is also becoming very important as well in its role.
00:21:56.319 --> 00:21:59.759
It's AI is not a decarbonization technology by itself.
00:22:00.160 --> 00:22:09.839
But it's a great enabler to help optimize energy use, reduce waste, improve operational efficiencies, so it will also have a key role to play.
00:22:10.559 --> 00:22:15.920
In many cases, as you know, the cheapest tone of carbon is the tone you never emit in the first place.
00:22:16.400 --> 00:22:22.640
So the winners in this industrial economy will be the ones that bring all these elements together.
00:22:23.519 --> 00:22:25.039
Yes, I think that's very important.
00:22:25.119 --> 00:22:32.079
You mentioned the industrial infrastructure, physical infrastructure, but there's also kind of scientific and intellectual infrastructure, right?
00:22:32.160 --> 00:22:38.480
So the research side, the um the knowledge building, you mentioned AI as an important enabler as well.
00:22:38.640 --> 00:22:41.200
Um, so all that kind of integration.
00:22:41.599 --> 00:22:49.920
So, what do you see as the UA's role in building this low-carbon, this new low-carbon uh energy industrial system?
00:22:50.319 --> 00:22:59.920
Uh I think the UAE has uh a genuine opportunity, uh and it has several unique advantages that other countries don't have.
00:23:00.319 --> 00:23:09.359
It has a strong industrial base, uh, relatively young, but uh it's uh it's uh it has become very strong.
00:23:09.599 --> 00:23:21.119
Uh world-class infrastructure, uh, excellent logistics connectivity and a proven ability to deliver large-scale projects whether it's infrastructure or industry.
00:23:21.440 --> 00:23:38.640
Second, it has access to some of the world's uh, let's say, lowest renewable energy energy and resources, which is you know it's critical to decarbonisation, that's where it all starts.
00:23:39.599 --> 00:23:47.920
So, another thing that it's great about the UAE is that it has a pragmatic approach towards decarbonisation and the energy transition.
00:23:48.559 --> 00:23:51.599
It's not one size uh fits all.
00:23:52.640 --> 00:23:57.920
It looks at the combination of these different technologies to reach there.
00:23:58.960 --> 00:24:08.400
And that flexibility is very important because industrial decarbonisation it's too complex to be done by just a single approach.
00:24:09.119 --> 00:24:25.519
So I think there has been great progress in the country with regards to uh reaching the you know decarbonising and becoming a global platform for industrial innovation as well.
00:24:25.839 --> 00:24:49.920
And uh in summary, I think it will take a leading role, that's my view, in combining all these elements: uh clean energy, industrial capability, uh capital and technology partnerships, and uh this will help build the next generation of uh industrial competitiveness, and I see UAE being very well positioned uh towards uh meeting that goal.
00:24:50.240 --> 00:24:50.559
Right.
00:24:50.640 --> 00:24:53.759
So we've talked a bit about the UA, of course, its role there.
00:24:54.160 --> 00:25:02.559
We mentioned a bit about Europe and uh the carbon market and the importance of Europe, I guess, as a consumer of green or an importer of green products.
00:25:02.640 --> 00:25:02.880
Yeah.
00:25:03.039 --> 00:25:07.759
Um, but of course, there are there are many other countries involved in these these green industrial efforts.
00:25:07.920 --> 00:25:12.640
What kind of industrial cooperation do you think is required internationally to make this happen?
00:25:12.960 --> 00:25:21.440
I think first of all, uh the transition cannot happen without international kollaboration.
00:25:21.519 --> 00:25:24.079
That's uh that's very very key.
00:25:24.240 --> 00:25:28.720
And that's the approach that the UAE is taking with regards to strategic kollaborations.
00:25:29.039 --> 00:25:42.640
You see many partnerships have been uh formed in the UAE whether it's on the technology side or other parts of the value chain.
00:25:43.119 --> 00:25:48.480
So, the heavy industry operates in a global value chain.
00:25:48.799 --> 00:26:00.640
So, for example, steel producers, technology providers, investors the financing and energy developers and regulators are all interconnected.
00:26:01.599 --> 00:26:07.200
So there is no single company, country, or industry that can solve this challenge alone.
00:26:07.359 --> 00:26:09.039
Collaboration is very important.
00:26:09.839 --> 00:26:24.240
And from an MSTL point of view, and from our perspective, what we need from, for example, global technology companies is a partnership, and we've been very open on that.
00:26:25.039 --> 00:26:34.559
We mentioned before various collaborations we have with ADNOC and Mazdar on the adaption of clean energy to decarbonize our assets.
00:26:34.799 --> 00:26:50.640
But we're also very open into collaborating with technology players on innovation for technologies that can have an impact in the future on achieving our decarbonisation targets and goals.
00:26:50.960 --> 00:27:00.079
Of course, these technologies need to be piloted, but they also need to be commercially scalable.
00:27:00.720 --> 00:27:12.400
So it you know we need to have kind of a line of sight on their scalability, their feasibility, and their ability to reduce our emissions at a large scale.
00:27:12.640 --> 00:27:21.279
So, in short, decarbonising uh heavy industry is not a competition between countries or companies, it's all about collaboration.
00:27:21.680 --> 00:27:39.039
Uh, we need, as I said before, common standards, shared infrastructure, stronger partnerships, and a globally aligned market if we want this uh low-carbon industry to scale at a pace that uh you know uh the world is expecting.
00:27:39.680 --> 00:27:46.799
Yes, no, I think that's for me that's one of the very interesting things about all this is the the international collaboration and and also its diversity, right?
00:27:46.960 --> 00:27:53.039
So in this region, the UA is an important player, but also, of course, in in different aspects of green industry.
00:27:53.119 --> 00:28:06.160
Uh you have Oman, you have you have Egypt, you have Saudi Arabia all doing different things in in green hydrogen, for example, as well as green industry and carbon capture and storage, European carbon capture and storage hubs are you know, important example.
00:28:06.240 --> 00:28:08.160
They're now they're now starting to emerge.
00:28:08.319 --> 00:28:11.200
Um, Canada are an important player in CCS as well.
00:28:11.440 --> 00:28:14.720
And then, of course, in the bigger industrial picture, you have you have China.
00:28:15.119 --> 00:28:24.000
Absolutely, we haven't spoken much about China, but you know, a huge player if you speak at almost any clean energy technology, um, and certainly as a steel producer and and consumer.
00:28:24.160 --> 00:28:28.880
Um, and then we didn't also speak much about the supply chain, but you have the the um the raw materials, right?
00:28:28.960 --> 00:28:33.119
The supply of high grade iron ore from various countries for your process.
00:28:33.279 --> 00:28:33.359
Yeah.
00:28:33.519 --> 00:28:45.119
Um so that that's one of the things that strikes me as very interesting, is how do you bring all of these different international players to together and make the best use of their different natural advantages and their and the skills that they've developed.
00:28:45.839 --> 00:28:47.279
Yeah, that's a good point.
00:28:47.519 --> 00:28:50.720
Uh as I said, we are open uh first of all.
00:28:51.680 --> 00:29:11.920
The first uh step is to be open to collaboration and uh and align with uh align with the concept that you know only through strategic collaborations you'll be able to to you know to meet a goal because of the interconnectivity of uh the supply chains.
00:29:13.839 --> 00:29:30.240
This is kind of uh as we discussed before, a key uh ingredient in the way that the UAE uh does business and uh which cascades down also to the different uh national champions such as uh M Steele.
00:29:30.720 --> 00:29:49.680
So most of the uh projects that we're doing, some of them are public, some of them are still at a stage where we can't disclose uh much information, are based on this concept of strategic collaborations with uh iron ore suppliers.
00:29:49.839 --> 00:30:02.160
As you know, in the UAE there is no iron ore resources, so we will have to rely on strong partnerships on that, uh, as well as the end markets, especially when it has to do with uh low-carbon steel.
00:30:02.799 --> 00:30:15.039
Uh it's important to uh have uh long-term commitments and partnerships on the demand side as well to de-risk such projects.
00:30:15.359 --> 00:30:19.200
Yeah, and you mentioned the local industrial ecosystem here in the UA.
00:30:19.359 --> 00:30:20.880
I think that's very important too, right?
00:30:21.039 --> 00:30:30.559
So you have the collaboration with AdNok on the carbon capture, you have the collaboration with Mastar on the green hydrogen, and of course, also a provider of renewable electricity.
00:30:30.720 --> 00:30:39.359
Um, and then you have the the other key industrial entities in the UA, um, some of them are on their own decarbonisation journey, like aluminium and chemicals.
00:30:39.440 --> 00:30:44.720
Um, you have the power industry, of course, the uh the the but the both the renewable and the nuclear power.
00:30:44.880 --> 00:30:51.519
Um, so that I guess the kind of integration and those relationships between the different main UA players are very important.
00:30:52.160 --> 00:30:54.079
Yeah, it's uh absolutely important.
00:30:54.880 --> 00:30:58.720
We we discussed before about the concept of industrial clusters.
00:30:58.880 --> 00:30:59.920
I think that's key.
00:31:00.160 --> 00:31:14.960
It's key because it can bring all these players together that can uh leverage a certain infrastructure when it has to do uh with uh common carbon capture and utilisation infrastructure.
00:31:15.119 --> 00:31:24.720
Uh hydrogen, which is not only a steel uh enabler, a technology enabler, it's also an enabler in the chemikals uh uh industry.
00:31:26.240 --> 00:31:31.519
So yeah, it's really important to work uh towards this uh this approach.
00:31:31.680 --> 00:31:38.799
It will create efficiencies and it will also bridge the supply and demand of uh clean elektricity.
00:31:39.119 --> 00:31:39.519
Yeah.
00:31:40.480 --> 00:31:43.920
So maybe gives give gives a bit of the vision now.
00:31:44.079 --> 00:31:49.759
If all these initiatives are successful, if we make good progress on on the technology and and the the market.
00:31:50.000 --> 00:31:55.119
What is the steel industry in in 10 years' time, let's say 2035, what does that look like to you?
00:31:55.440 --> 00:32:07.359
Uh I think uh okay, I don't have the crystal ball, but if I had to guess, uh I think that the steel industry will look different in 2035, and I hope it looks different.
00:32:07.440 --> 00:32:10.799
Uh, although there has been significant progress already.
00:32:11.039 --> 00:32:17.039
Uh first, I don't think there will be a single dominant uh technology as we discussed before.
00:32:17.279 --> 00:32:34.400
There will be uh different regions, regions adapting different pathways depending on access to the various enablers such as renewable energy, natural gas, scrap availability, carbon capture and regulatory frameworks.
00:32:35.200 --> 00:32:46.640
I think perhaps hydrogen uh will become an important part, but it's not it's not gonna be uh the only solution.
00:32:46.720 --> 00:32:48.559
It's gonna be part of the toolkit.
00:32:50.240 --> 00:32:58.000
I expect technologies such as recycling and circularity to play to play a much uh let's say a larger role.
00:32:59.599 --> 00:33:06.480
Electrification and energy uh efficiency will continue to improve uh across the value chain.
00:33:07.920 --> 00:33:21.279
So, yeah, uh as for the market and the premiums, I hope uh by 2035 we will no longer be talking about green steel as a premium in the way we talk today.
00:33:21.440 --> 00:33:49.680
Yeah, uh we uh I hope that we uh will create uh low carbon steel uh as the competitive choice, not an is choice, meaning that uh the technologies will be mature, the supply chains will be developed, uh the carbon-related regulations will become widespread and unified, and we will see the cost gap narrowing significantly.
00:33:49.920 --> 00:33:58.559
So, just in summary, I think by 2035 the biggest challenge may not be the different uh technologies, it's not a technology race.
00:33:58.880 --> 00:34:05.119
Uh it may be that carbon becomes a standard uh product uh attribute.
00:34:05.279 --> 00:34:13.679
Customers will accept to expect to know the emissions footprint of steel just as they expect to know that its quality, performance, and price today.
00:34:14.000 --> 00:34:20.880
That's my uh kind of uh vision of uh uh green steel market in 2035.
00:34:21.360 --> 00:34:21.679
Yeah.
00:34:22.239 --> 00:34:23.199
Well, that's a great vision.
00:34:23.440 --> 00:34:36.559
I think the vision where green steel is readily available and the and the cost of it is uh the cost premiums come down, yeah, and the markets are there and the carbon regulations are there to support that and and help consumers make the the low carbon choice.
00:34:37.119 --> 00:34:38.000
Yeah, absolutely.
00:34:39.440 --> 00:34:41.119
So thank you very very much, uh Dr.
00:34:41.199 --> 00:34:41.679
Demetrius.
00:34:42.000 --> 00:34:53.440
A really fascinating conversation and getting into one of the key, uh the biggest and and and trickiest and like most complicated industrial challenges in in delivering this as low-carbon industrial economy.
00:34:53.599 --> 00:34:57.760
Uh, and really good to hear from somebody who is actually involved in uh day day by day in delivering this.
00:34:58.400 --> 00:34:58.880
Thank you so much.
00:34:59.119 --> 00:34:59.280
Thank you.
00:34:59.360 --> 00:35:00.239
It was great to talk to you.
00:35:00.960 --> 00:35:01.119
Thank you.
00:35:02.719 --> 00:35:08.000
So thank you for joining us for this edition of Future Energy Insights with the World Future Energy Summit.
00:35:08.719 --> 00:35:11.039
And we look forward to also seeing you in person.
00:35:11.360 --> 00:35:17.039
Please do join us for the World Future Energy Summit in Abu Dhabi between the twelfth and fourteenth of January twenty twenty seven.
00:35:17.840 --> 00:35:18.079
Thank you.
