Urbanization is increasing worldwide, 55% of the world’s population is living in the cities, and it is estimated that the urban population will rise to 68%by 2050. Urbanization will increase demand for green steel and give attention to the sustainability of the steel.
Abednedju Giovano Warani Sangkaenge Prsident Director of Gunung Raja Paksi (GRP) in Indonesia. He said that Indonesia has different plans for urbanization & its major project is to design its new capital city, Kalimantan, as a green and smart city. It will be an opportunity for steel producers like GRP to become green steel suppliers for the capital city. We expect that due to urbanization, 20-30% demand for exports will increase by the end of 2022. With urbanization, infrastructure will increase, and more issues like environmental hazards will emerge. Most governments are making policies to solve environmental problems like carbon emissions. Europe has a significant role in levying carbon taxes, and Australia lags.
Sangkaenge said that GRP is making an effort with Green Building Council to get a certificate for sustainable supply chain & decarbonization. GRP has obtained a certificate of Environmental Product Declaration (EPD) which has increased its transparency and credibility on life-cycle environmental outcomes. It is also proof for their consumers to increase exports from GRP due to environmentally friendly products. So, end users are ready to pay more for green steel products.
Green steel is quality steel with less CO2 emissions of 0.6% tons per ton of steel. The steel industry contributes 7-9% of CO2 emissions worldwide. Iron ore is an environmentally friendly raw material, and green hydrogen-based direct reduction technology will help to reduce the CO2 emissions in the steel industry.
GRP is analyzing factors like carbon taxes, raw materials prices, energy cost, and investment in technology to implement green steel premium. GRP is investing in Light Section Mils (LSM) and EAFs.
Sengkang said that the supply of green raw materials would increase as the consumption of green steel will increase in the budget for the highest spending on infrastructure in Indonesia. The steel industry of Indonesia was using 40% of its productive capacity due to a lack of steel scrap. Policies by the government regarding imports and infrastructure development will increase the imported raw material, which will help to flourish the green steel industry.
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