Environmental expenditures
Following the completion in the business year 2018/19 of two major projects in the Steel Division and the High Performance Metals Division, environmental investments fell from EUR 66.2 million back to EUR 35.0 million and thus to the level in years past. By contrast, current environmental expenditures rose from EUR 299.1 million to EUR 314.5 million.
Environmental expenditures
In millions of euros
* In the business year 2015/16, in addition to the emission-intensive Austrian Group sites, a number of other, primarily international, production companies were included.
CO2 Allowances
This is chiefly due to the expense of EU emissions trading, which grew in the business year ended from EUR 69.1 million to EUR 90.0 million owing to the increase in allowance prices. The Steel Division alone accounted for fully EUR 62.2 million (previous year: EUR 44.0 million) of this amount.
The shortfall (overall need for allowances less allocation of free allowances) in the business year ended was about one third of CO2 emissions, just as in previous years on average. It is expected from today’s vantage point that the need to purchase additional allowances during the coming emissions trading period that runs from 2021 to 2030 will reach a similar scale.
The market remained very volatile following the exorbitant price increases in the past two business years. The general economic downturn—which intensified toward the close of the business year 2019/20 due to the COVID-19 pandemic and the resulting, widespread production shutdowns that led not just to a decline in industrial emissions but also to lower energy generation and consumption—was the main reason for the most recent temporary drop in prices.
Corporate environmental focus and measures
Despite shrinking investments in a difficult economic environment overall, the voestalpine Group brought important environmental and climate protection projects to fruition at its sites around the world.
The environmental program for the business year 2019/20 at the companies of the Steel Division in Linz, Austria, which engage in the production and processing of steel, foregrounded measures aimed at further reducing the use of fossil fuels such as coke and natural gas, process energy such as blast furnace gas (BFG), electricity, and the use of water for cooling the facilities. Steps were also taken to lower dust accumulations.
The work being undertaken at Austria’s largest legacy pollution clean-up project on the areal of the former coking plant continued apace. Hot spots (i.e., highly contaminated soil) located in the area of the former tank warehouses were removed. The funnel & gate system has made it possible for the past five years already to successfully counteract any removal of pollutants via the groundwater.
As before, the investment activities of the High Performance Metals Division are focused primarily on its new special steel plant in Kapfenberg, Austria. It is slated to start up in 2021 and will set highest ecological standards in terms of energy efficiency, heat recovery, and wastewater recycling.
The “environmentally optimized pickling” project with a volume of about EUR 16 million was completed at the same site in the business year ended. The newly built, fully automated salt bath and tunneled pickling system is equipped with a next-generation exhaust air and wastewater treatment unit for chemically treating wire rod and drawn special steel wire. This enables significant improvements in air, wastewater, and waste emissions; in resource efficiency; and, finally, in further reductions of employees’ health risks. The pickling shop was redesigned as a tunneled facility. Acid vapor is treated via exhaust air scrubbers, and a regeneration unit lowers the consumption of acid. The cascading structure involving rinse water and acid regeneration reduces the amount of waste classified as hazardous that takes the form of slurry from the wastewater cleaning facility. The new wastewater treatment unit also significantly lowers emissions concentrations as well as the volume of wastewater. Finally and not least, the redesigned facility will allow employees in the future to carry out their activities without having to be in the immediate vicinity of the acid baths.
The Metal Engineering Division focused on further improvements in resource efficiency and on sustainably effective energy-related measures.
At the Group’s largest site (Donawitz, Austria), a comprehensive program aimed at boosting efficiency makes it possible to increase the efficiency of the plant’s own generation of energy from by-product gases in the company’s own power plant by up to 20 GWh/year. In addition, technical measures help to reduce the amount of energy required to operate the power generation unit by some 6,000 MWh per year. A new waste gas blower at the sintering plant that also consumes a lot less electricity thanks to its greater efficiency was started up in March 2020. Moreover, the division’s production companies made comprehensive investments in the optimization of cooling and wastewater systems and, in part, in the modernization of the buildings’ heating and cooling systems also.
When it comes to voestalpine’s high environmental standards, the company’s Zeltweg site in Austria, which is specialized in turnout technology, is a shining example: Its environmental footprint has been CO2-neutral for ten years already, thanks to extensive energy saving and efficiency measures, the use of district heating from biomass and waste heat as well as the facility’s own hydroelectric power plant. The Zeltweg factory is planning additional projects focused primarily on lowering its consumption of energy. This includes the complete conversion of the factory floor heating systems to CO2-neutral district heating and replacing the fork-lifts that are operated using natural gas with electric vehicles. Some 40% of the still remaining direct CO2 emissions, which so far were more than offset by excess electricity from the facility’s own hydroelectric power plant, can be cut via this approach.
The Metal Forming Division also took steps at a number of its sites in Austria and internationally aimed at boosting energy efficiency yet further and thus further lowering CO2 emissions. This includes the widespread conversion to LED in factory floor lighting, improvements in the heat recovery process, and reductions in the consumption of water.
An emblematic project aimed at generating renewable energy in house, which uses innovative voestalpine products for photovoltaics, was implemented in the Netherlands, specifically, the company’s Bunschoten plant for automotive components. There, 35,000 solar panels that cover an area of more than eight soccer fields will generate annual peak solar energy of about 10 million kWh in the future. This covers one third of the facility’s own energy requirements, with the result that its CO2 emissions are reduced by close to 6,000 tons a year. voestalpine’s special section systems from Belgium are being used to install the solar panels on the roof.
Annually, the division achieves savings of 600 MWh in its consumption of natural gas while, at the same time, raising its production volume at its precision section production plant in Lower Austria. The annealing furnace was converted to so-called recuperative burners for this purpose. The new system consumes less energy to heat fresh air by using partially preheated air from the furnace.
Environmental management systems
Worldwide, roughly 130 Group companies (including all larger, environmentally-sensitive operating sites) are part of voestalpine’s internal environmental data management system. Approximately two-thirds of these entities possess an environmental management system (EMS) pursuant to ISO 14001 or the Eco-Management and Audit Scheme (EMAS), and another 8% utilize a certified energy management system pursuant to ISO 50001.
Product sustainability
Comprehensive analyses of a product regarding its ecological, economic, and social impact over its entire useful life are becoming ever more important, not only from customers’ viewpoint. Given the challenges of climate protection, increasingly such analyses are also being required at the political and legislative level. This applies not least to the EU’s “Green Deal,” which also emphasizes this topic in its long-term industrial greening strategy.
As regards environmental issues, therefore, voestalpine primarily foregrounds comprehensive customer-specific activities such as life cycle assessments (LCAs) and sustainable analyses over the entire delivery and value chain. This includes a number of quantifiable, specific product declarations such as environmental product declarations (EPDs) as well as those pertaining to material compliance and the circular economy.
The voestalpine Group engages in an intensive dialogue with its customers on issues of sustainability, particularly with respect to decarbonization and product assessment. It participates in cross-sectoral initiatives such as “Responsible Steel” and publishes its performance via external assessments such as the Carbon Disclosure Project (CDP) in ways that make it transparent to the public. In the CDP’s 2019 Climate Change assessment, voestalpine’s standing improved from a “B” status to an “A” (leadership status) as well as from “B” in the organization’s supplier engagement rating to “A” (global leaderboard), its highest possible category.
Energy and climate policy
At the level of the EU, work to flesh out the Green Deal initiated by the new EU Commission is front and center. As far as the steel industry is concerned, in this connection specific steps to support its long-term decarbonization are particularly relevant. Initial guideposts for this project—for example, tightening the CO2 reduction targets for 2030; an EU-wide, binding climate act; and a European industrial strategy—are currently going through the political decision-making process. In Austria, for its part, the federal government that took office in January 2020 has presented a very ambitious climate protection program for the legislative period that runs until 2024. Given its goal to achieve climate neutrality by 2040, this program significantly surpasses the targets of the global climate accord and the European Union, which set 2050 as the target. Both at the level of the EU and nationally, voestalpine is in constant talks, directly and via industry associations, with political decision makers, the science community, environmental organizations, and industrial partners.
Climate protection
voestalpine has committed to the 2015 Paris Climate Goals of a large community of states to reduce greenhouse gas emissions by more than 80% by the middle of this century. To this end, the company is pursuing a consistent and long-term strategy to avoid direct CO2 emissions.
In the long term, the Group’s extensive research and development programs aim to convert the production of steel from the approach based on coal to one based on hydrogen. The H2FUTURE project, which was successfully started up in the business year ended and will run until 2021, is a flagship project of the European Union that serves to generate green hydrogen on an industrial scale. voestalpine has simultaneously been exploring concrete interim steps. For example, it is currently examining financial and technical aspects of an incremental switch from the coal-based furnace approach to the green electricity-based electric steel approach as a hybrid concept. After 2030, this could lower the CO2 emissions of steel production at the Group’s Austrian plants in Linz and Donawitz by about one third.
However, this transformation presupposes both the availability of renewable energy and its financial feasibility. In the final analysis, the broad-based implementation of CO2-minimizing technologies will also depend on the degree to which they can be operated in globally competitive ways.
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