1. European Steel in a Globalized Market
Prof. Dr.-Ing. Dieter Ameling
Senior Counselor ThyssenKrupp Steel
former President German Steel Federation
former Chairman Steel Institute VDEh
ABM’s 63rd Annual Congress
July 28 – August 1, 2008 Santos – SP - Brazil

2. European Steel in a Globalized Market
Steel in a globalized environment
Raw materials – short and expensive
European steel industry – sustainable, innovative and competitive
Steel and the energy and climate policy of the EU
EUROFER‘s proposal to reduce the steel industries CO2-emissions worldwide

3. Explosion of World Crude Steel Production and Continuous Casting
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4. The European Union – 27 Member States
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5. The Ranking of Gross Domestic Product (GDP) by Actual Prices 2006
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6. EU 27: No. 2 in World Crude Steel Production

7. The Top 10 Steel Producers in the EU 27, 2007

8. World Trade in Steel Excludes internal trade within the EU 25
Source: ISSB
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9. Main Regional Steel Trade Flows (2007)
China No. 1 Steel Exporter
EU 27 No. 1 Steel Importer
Source: ISSB
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10. China: Imports and Exports
Steel Mill Products
up to May 2008 and forecast 2008
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11. EU 27: Chinas Export Target No. 1 outside Asia in 2007
Total export volume : 68,3 Mill. t
Asia total:
52,7 %
Source: Trade Statistic German Steel Federation
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12. Actual Antidumping Complaints of EUROFER
No. 1 against EU 27 hot dipped coated sheet imports from China
Str 28Mrch08
and No. 2 EU 27 stainless cold rolled sheet imports from China, Korea, Taiwan No. 3 EU 27 wire rod imports from China and Turkey
Source: official EU trade statistic (Eurostat) with own calculations
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13. The Influence of the Chinese Government on the Industry
Fiscal development aid
Preferential Loans
and Direct Credit
Governmental regulation
of production and external trade
Support of
individual companies
Free or cheapened
electric power supply
Land grants
Governmental support of
developments
of raw material sources
Disregarding of environmental
and occupational safety standards
Subsidized
freight rates
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14. Blast Furnace in China
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Source: GEO 11/2007

15. Coking Plant in China
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Source: GEO 11/2007

16. European Steel in a Globalized Market
Steel in a globalized environment
Raw materials – short and expensive
European steel industry – sustainable, innovative and competitive
Steel and the energy and climate policy of the EU
EUROFER‘s proposal to reduce the steel industries CO2-emissions worldwide

17. Price Development of Iron Ore and Coal

18. Overseas Iron Ore Exports of the 10 Largest Exporting Companies in 2006

19. Conditions for the Application of the EC Merger Regulation
Worldwide turnover of all joining companies with more than 5 Billion EUR and
Rio Tinto: 22 Billion $ (2006), BHP: 39 Billion $ (2007)
b. turnover in the EU of at least two joining companies with more than 250 Million EUR each and
Rio Tinto: 3,9 Billion $ (2006), BHP: 11 Billion $ (2007)
c. the joining companies shouldn‘t have a share of more than 2/3 of their turnover within the same member state.
() 
We require an intervention of Brussels to stop the merger of BHP and Rio Tinto!
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20. Prices for Hot Metal, DRI and Scrap again on a Record High

21. European Steel in a Globalized Market
Steel in a globalized environment
Raw materials – short and expensive
European steel industry – sustainable, innovative and competitive
Steel and the energy and climate policy of the EU
EUROFER‘s proposal to reduce the steel industries CO2-emissions worldwide

22. Stahl-Zentrum

23. Indicators of Sustainable Steel
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24. Reducing Agents Consumption of Blast Furnaces in the World, 2006
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25. Energy Efficiency and CO2-Emissions of the German Steel Industry
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26. Innovations for the Future
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27. Climate Change – Steel is the best Choice Steel – driver of innovations to increase efficiency of resources
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28. Climate Change – Steel is the best Choice Steel – driver of innovations to increase efficiency of resources
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29. European Steel in a Globalized Market
Steel in a globalized environment
Raw materials – short and expensive
European steel industry – sustainable, innovative and competitive
Steel and the energy and climate policy of the EU
EUROFER‘s proposal to reduce the steel industries CO2-emissions worldwide

30. Renewable Energy and Climate Change Package of the European Commission of 23.01.08:
The plan calls for a:
„These targets are very ambitious: today 8.5% of energy is renewable. To achieve a 20% share by 2020 will require major efforts across all sectors of the economy and by all Member States.“
2005 is the new basis for all calculations within the framework of this package.
20% increase in energy efficiency
20% reduction in greenhouse gas (GHG) emissions
20% share of renewables in overall EU energy consumption by 2020
10% biofuel component in vehicle fuel by 2020
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31. GHG Target: -20% compared to 1990 -14% compared to 2005 EU ETS
Non ETS sectors
-10% compared to 2005
27 Member State targets, stretching from -20% to +20%
Source: European Commission, DG Environment

32. The Energy and Climate Package drastically Reduces
the Crude Steel Production within the EU
-21 % CO2 reduction from to 2020
Specific CO2-emissions could decrease from 1.7 to 1.56 t CO2/t steel
Compared to expected steel production in 2020 of 236 Mt this would only allow a reduced steel production of Mt
 = Mt = % Steel
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33. The Energy and Climate Package of the European Commission of 23. 01
The Energy and Climate Package of the European Commission of Drives the Industry Away
For the energy-intensive industries sufficient allowances are indispensable to prevent relocation to outside Europe:
The needed certificates have to be allocated free of charge. The foreseen auctioning would lead to a massive loss in international competitiveness.
A general sectoral CO2 reduction target of 21 % cannot be fulfilled by the steel industry. The energy-intensive industries are characterised by process related emissions. Today, they are working at the minimum level.
Further electricity price increases through auctioning obligation for power producers cannot be borne in the international competition.
Industry needs investment certainty. Clear decisions must be made. Otherwise investments would be stopped, which would result in a lack of competitiveness as well.
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34. The Global Energy Related CO2 Emissions are further Increasing The Measures of EU 27 without any realistic Effect
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35. CO2 Emissions Trading in the European Union – Does it make Sense?
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36. European Steel in a Globalized Market
Steel in a globalized environment
Raw materials – short and expensive
European steel industry – sustainable, innovative and competitive
Steel and the energy and climate policy of the EU
EUROFER‘s proposal to reduce the steel industries CO2-emissions worldwide

37. Disadvantages of the Existing Emissions Trading System
Absolute caps are equivalent to caps on production and lead to relocations to outside the EU.
The reduction targets are set „top down“ and are not consistent with technological reduction potentials.
Because the emissions trading directive does only refer to direct emissions the reduction potentials of the steel industry are not addressed adequately.
The pricing-in of allowances which were allocated free of charge as well as auctioning lead to inadequate increases of electricity prices.
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38. Main Characteristics of the Baseline and Credit System
An ETS tailor-made for the steel industry.
Emissions are determined in an integrated way taking into consideration all stages of production. Inputs like coke or electricity or credits resulting from using by-products do also count.
The average amount of European emissions serves as a basis for the allocation of allowances.
The scheme brings about continuous improvement in terms of efficiency: The average amount of European emissions serving as a reference for allocation, incentives for emission cuts are created what directly impacts on the average emissions amount ("moving target").
Ex-post-allocation taking account of the production quantity instead of absolute emissions ceilings.
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39. Facts about the Emissions Trading System for Steel
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40. Advantages of the Baseline and Credit System
Existing technological reduction potentials, but also the limits concerning process emissions are regarded.
The system results in continuing efficiency improvements because the orientation to the emission average gives incentives to reduce emissions. This influences the emission baseline („moving target“).
Production growth is not constrained. The baseline and credit emissions trading system targets only at efficiency.
No incentives for relocations of production to outside the EU.
The system is more attractive for states outside the EU and their steel industry.
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41. European Steel in a Globalized Market
Summary
The world steel production continuous to grow.
EU 27: No. 2 in world crude steel production
China became the No. 1 steel exporter in 2007.
Raw materials remain short and expensive.
European steel industry – sustainable, innovative and competitive
The Energy and climate package of the European Commission of drives the industry out of Europe.
The only solution is a sectoral approach.
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