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industry insight is more than a podcast. It's a plea for the transformation of our territories with us today. Emmanuel de neville, the director of Arcelormittal's decarbonization program, he gives us the keys to understand the transformation of the flagship of the steel industry decarbonization, european dynamics, technological innovation, resource savings. Arcelormittal is at the down of change that are transforming the steel industry industry insight. A podcast produced by Schneider Electric Emanuel. Thanks for having me. Welcome to Dunkirk. Here is a site where 3000 people work every day for Arcelormittal. We produce about seven million tons of steel per year, which makes us one of the major sites for Arcelormittal. So this factory is one of the largest production capacities in western europe. Right? That's right. Arcelormittal, which is the world leader in steel and mining, produces 70 million tons per year worldwide. By comparison in Dunkirk. Well, we produce 1/10 of it. Okay, let's start from the beginning, how do you make steel? That's a good question to make steel. We start with iron ore, which we reduce and melt to bring it to the right grade. In other words, we we find the right chemistry for the customer. This is the first stage and it is done in Dunkirk for the whole northern half of France. Once this deal has been solidified, it is rolled. That that means we we reduce its thickness until coils are obtained, those are about one millimeter thick, which is why they're called carbon plates. And once you've obtained this carbon plates, what do you do with it? Well, we laminated hot and cold until we achieve surface aspects that our customers find beyond reproach. Then of course we can put in a little zinc on it to improve its corrosion qualities. Emmanuel, you are director of the decarbonization program. So how do you operate to become carbon neutral by 2050? You know that Arcelor Mittal is the world leader in steel, We also intend to become the world leader in decarbonization In the decarbonization steel industry, there is room for everyone about that. We have made an observation, decarbonization is accelerating worldwide, Europe has actually increased its objectives and its resources to take up the challenge which has been summed up pretty well in the in the recent production of fit for 55 in July, the group published its goal of reducing of 35% are greenhouse gasses emissions by 2030 with a 2018 reference, this will be a real breakthrough in the next 10 years. We're going towards carbon neutrality As surprising as it may seem in view of our history, we want to reach carbon neutrality in the steel industry by 2050? Not not only in Europe but in the hall. Arcelormittal group worldwide. So why is arcelormittal located in Dunkirk? Is it related to the north of french industry or is it more related to the ports of Dunkirk. Let's go back in history. The site opened in the 1960s and was already the result of a very profound transformation. The evolution of our raw materials at the time. We had minds in France and Germany in the 1950s and 1960s, we were increasingly looking for more precise and noble materials that came from further away. That's why the challenge of being maritime was an important competitive issue for the steel industry. Lots of big plants like Dunkirk were located on the seaside. It's interesting that you mentioned history because today we are at a turning point that is surely as significant as the turning point we experienced after the war when this plant was built and this turning point is the decarbonization shift. Absolutely. We are convinced that tomorrow's steel industry will either be **** carbonized or it will not be. That's our main challenge for the future. Moving towards decarbonization is an issue that concerns us all as citizens and as companies both must go hand in hand so we can reach our objectives. So the goal is to create a de carbonized industry. So Emmanuel, tell us, what is the de carbonized industry, how do you make it possible at our salon middle about carbon neutrality, small improvements won't be enough to make it possible. We are talking about a deep transformation, meaning we have to completely rethink our production system in the steel industry. These changes are based on several levers, a single one won't enable us to achieve this level of decarbonization. The first level is an innovative one, it's about making full use of the circularity of steel as you probably know, steel can be recycled ad infinitum, this liver was used in the past because to manufacture one ton of new steel, we've been using for a long time, 100 kg of steel called post consumer. This has advantages for steel recycling, but it has advantages for carbon and greenhouse gas emissions. This use steel is almost as it should be to make new steel basically it's it's going to be a matter of melting it down. I simplified the process, but but here we have a lever and we plan to increase the amount of post consumer steel we're using in our steelmaking recipe. This first project for Dunkirk will be implemented next year. But then where was that Still before? How do you manage to recycle it? That's actually the main advantage of this first level. We'll be able to activate it as quickly as possible. We are an industry where there are large quantities of steel to be recycled, especially in countries like France and in all of western europe, somewhere, the iron deposit is under our feet. This is a real advantage compared to the iron that we get from other continents. Even if we're happy to be on the seaside for that specific reason, there is an issue of circularity but also of sovereignty for France and for europe, it's important to know that France and europe are exporters of post consumer steel. So rather than sending our steel far away to be dismantled or re consumed and bringing in or from the wood, we're going to carry things locally. The process and the products are not organic, but almost to make it the greener, we can is our first issue at stake about carbon, especially when it comes to transportation. That won't be enough. If that's the only thing we do, we will progress by 10 or 20%, but we will not reach the 30 or 35% we want for 2030 and we won't reach carbon neutrality. That's why a real breakthrough is at stake about processes and technologies. Well, that is to say we are going to wonder how we can melt the iron ore we need without using carbon. Since today it is carbon that catches the oxygen atoms of the iron oxide. A solution is emerging, which you've probably already understood hydrogen. We can cast iron ore with hydrogen. So to do that, We need to rethink our production system and this is what we call a direct reduction facility. We have a project understudy in Dunkirk about the making of an industrial installation that would produce about two million tons of cast iron per year. Therefore, we'll be able to make more steel at the end around 2.3 million tons per year. All right, so what you're saying is that you're going to produce more steel thanks to the hydrogen that comes into the process of steelmaking, right? Exactly. No, no more cold gas is going to reduce the iron oxides. Yes, because today you're still using coal from the melting process. We are we use coal that has been prepared and cooked what we call coke and we use pure cole. They are the two ways of combining cold that are used today to reduce and melt iron ore. But tomorrow there will be no more coal in our solution. That is why the solution of using gas is totally decarbonization. We can combine it with hydrogen, which is the most noble gas we can use for this recipe. Then we'll divide greenhouse gas emissions by three, which will allow us to take up the challenges. So there is a real link between innovation and decarbonization. Absolutely. This is the heart of steel industry and I think any company would agree all of our innovations customer oriented. In the end, we have to follow our customers. There's an example of innovation underway at our sites. We plan to pursue the decarbonization taking place in the automotive world. Tomorrow there will be more and more cars which will require special steels. This is the niche we're in. We're developing production lines to reach the amount of steel need about the car industry, isn't it still needed for the bodywork itself or for the machines that make it in this case. I'm talking about steels that have specific magnetic properties used to make electric motors, then the body shops will make pretty much the same motors for electric cars as they do for others. This is only an example, but you are right decarbonization means innovating to keep up with our customers, our customers today for the most part expect **** carbonized steel or perhaps in the near future in the car dealerships, there'll be labels on the car's mentioning, this one is carbon neutral, this one is classic. We want to keep up with our customers in this development. If we look ahead to 2050, how do you see arcelormittal position on decarbonization? Do you see any impacts on your work organization? It's a huge project that will require a lot of resources. Actually, all resources are welcome. I make the most of having you in front of me knowing you have a wide audience will have to be creative not only in the stages of designing the solution but also in its implementation, they're all talents are welcome. I think the decarbonization is a real battle for the years to come in. A real challenge for the whole society. Now, obviously we can work for companies that are already carbon neutral and that's fine and we need them. But but if we want to succeed in our climate shift, I think the real challenges to decarbonization industries that are not yet carbon neutral. We want to become a leader in decarbonization and we still need a lot of talent teams to make this shift to success. We're still in the early stages of an upheaval. We are in the process of thinking about the project organization knowing there will be a multiplicity of of projects in the end we're talking about the Dunkirk site now, but obviously it will be deployed on all the plants. We also have pilot projects, There's one that I can mention um I said earlier that we can divide greenhouse gas emissions by three with direct reduction by using the circularity of steel. But if we really want to achieve carbon neutrality, we must capture the residual sio two of our fumes, A little bit of CO2 that will still be emitted. And so we have processes that are somewhat innovative, for example, processes that required specific um means a project of this type is being developed in Dunkirk. We'll have the first results in March, then we'll be able to catch the carbon dioxide in the middle of our emitted gasses. Once we've captured it, we have to do something with it. We have the solution, we can either store it underground, what we call the CCS process or give it a second life. Alright, could you tell us more about this. Second life Sio two is reconditioned with hydrogen for example, we can make plastic chemistry or new fuels with it will be finally able to carry carbon this way. This is the circularity of carbon. Thanks to it. We won't have to keep using fossil carbon in the subsoil that'll end up accumulating in the atmosphere. But saying we will give several lives to the carbon that's already, there is energy consuming. That's why it is a challenge. But above all it is a solution to limit global warming. In the end. Emanuel, do you have any advice to share with us about taking the path of **** organization as an industry? The first piece of advice I can give is about speed. We we must go fast. We know that there is a climate emergency from the point of view of all companies including the french and european industry. I think there is a challenge in moving quickly into the dynamic of decarbonization. I think this is the main part of tomorrow's innovations. If we are the first to move forward on this path, we will be able to help others and so to shine even more. What you're saying is that today in 2021 decarbonization is becoming a competitive issue. It's clearly a competitive issue for France Europe and for all companies. Our second challenge is to be more attentive to the energy issue. What is the background of decarbonization? It's an energy transition. We are going to abandon some energy sources such as coal. The challenge is to develop electrical resources today. We know how to make non carbon electricity. There are several solutions and in industries we are very open about them. What I'm certain of anyway is that tomorrow we will need this energy continuously. Green energy is renewable and so it is needed. We have to keep in mind the massive volume of energy that tomorrow's industry will require here. I'm talking about gigawatts of energy. Also also very important volumes of hydrogen will be required. Indeed, the hydrogen solution is actually linked the question of availability and affordability of electricity. So it's going to be difficult to find enough renewable energy to run the plants. Right, that's right. Today. This plant runs 24 hours a day, 365 days a year. We use liquid steel and processes that run in a continuous rhythm. We are favorable towards solar and wind power. We also know that there will be a need for continuous consumption of these powers, which will require more energy sources. Earlier, we were talking about the history of steel industry. If we look at the history of energy, we can see that since 1800, a lot of energies have combined with each other coal replaced by oil, but oil was combined to it. Nuclear power joined oil and today, renewable energy is used in parallel with nuclear power. This is great because it limits the growth of these polluting energies in aid of greener energies. Now again, we have to give up a type of energy In the first place. We need to follow the increasing need for energy which has been growing worldwide for 200 years. But above all we have to replace coal energy. This is a challenge for society. I think we all need to be aware of this. The last piece of advice I would give is to play fair, I mean when it comes to decarbonization, exemplary companies should not be penalized in the economic competition. We know that decarbonization has a cost, yes, and these costs will impact the companies that take these green turn. Emmanuel, you are saying that everyone should take his fair share. Exactly. We should not end up in a system where companies that made the shift to energy transition before the others are penalized the market and the structure of competition is such that they could end up with additional costs, decarbonization brings additional investment costs and it is actually not a great return on investment for these companies compared to those who remain on a carbon scheme. These points are obviously discussed with our partners, the institutions in Dunkirk, we are really supported at a local level and I very much recognize this. We are also in regular discussions with France and we are involved in all of the european decarbonization support programs. These discussions are the keys to opening the way to a technical and economic solution to decarbonization. In the end we will allow everyone to go ahead Emmanuel See you in 2050 and thank you for having me. Thank you. Thank you for listening to industry insights, a podcast produced by Schneider Electric.