European producers anxiously await CBAM details in ‘Fit For 55’ plan

European industrial producers are anxiously awaiting the details of the European Commission’s Carbon Border Adjustment Mechanism (CBAM), part of the “Fit For 55” climate-change package of measures being presented today, which could greatly influence their energy costs.

Whether the introduction of the CBAM system – designed to introduce transboundary taxes on non-EU countries regarded as making a lesser effort, than the EU, to combat climate change – will be combined with a continuation of free carbon emission rights for certain industrial categories, or spell their end, is a crucial detail for producers active in sectors such as aluminium, cement and steel.

The latter scenario would prompt a sharp increase in energy costs for many energy-intensive producers, and could lead to further closures of industrial plants in Europe.

Latest reports suggest free carbon rights for selected industrial categories, as a cost-offsetting measure, will be maintained until at least 2025 or 2026.

The termination of the carbon cost-offsetting measure would require EU industrial producers to cover emission right costs for their entire production, in other words, sales within the EU and exports beyond, a dreaded prospect that would devastate European industry exports.

In the aluminium sector, for example, the termination of carbon emission cost offsetting measures would result in a 60 percent increase for every ton produced, making business beyond the EU impossible.

Tenaris, Edison, Snam unite for hydrogen-based steelmaking project

Tenaris, Edison and Snam have signed a letter of intent to launch a project aimed at decarbonizing Tenaris’s seamless pipe mill in Dalmine, northern Italy, through the introduction of green hydrogen in some production processes, the companies have announced.

The project, which is part of a broader initiative known as “Dalmine Zero Emissions”, promises to launch the first industrial-scale application of hydrogen in Italy to decarbonize the steel sector.

Tenaris, Edison and Snam will collaborate to identify and implement the most suitable solutions for the production, distribution and use of green hydrogen at the Tenaris mill, contributing their skills to invest in the best available technologies.

The project looks to generate hydrogen and oxygen through an approximate 20 MW electrolyzer that will be installed at the Dalmine plant and to adapt the steelmaking process to use green hydrogen instead of natural gas.

The initiative may also include the construction of a storage site for the accumulation of high-pressure hydrogen and the use of oxygen, locally produced through electrolysis, within the melting process. The development of the project would significantly reduce CO2 emissions related to electric arc furnace steel.

After the initial test, the three companies will evaluate whether to expand the collaboration to other stages of the production process, therefore extending the use of hydrogen.

The broader “Dalmine Zero Emissions” initiative was launched by Tenaris together with Tenova and Techint Engineering & Construction to integrate green hydrogen in steelmaking from the electric arc furnace steel and in the downstream processing of the Dalmine mill.

Michele Della Briotta, President of Tenaris Europe and CEO of TenarisDalmine, noted: “The ‘Dalmine Zero Emissions’ project is our latest initiative launched by Tenaris in Italy to improve our environmental footprint, after the investments and projects for the protection of air quality, for energy efficiency, for the reduction of raw materials consumption, for the increase of the content of recycled material in our products and for the enhancement and reuse of our by-products. Through the ‘Dalmine Zero Emissions’ project’, together with qualified partners, we are starting the energy transition of the Dalmine plant, placing ourselves at the forefront of sustainability in the steel sector.”

Nicola Monti, CEO of Edison, commented: “With this agreement, Edison launches a path to support the decarbonization of industrial sectors that are key to the national economy, thus contributing to the achievement of the energy transition objectives set at a national level in the PNIEC and at a European level in the Green Deal. The renewable energy produced by our plants and the technological solutions available to us can concretely contribute to the development of a new and important national value chain, which in the coming decades will accompany the evolution of the economic and production system towards climate neutrality.”

Marco Alverà, CEO of Snam, remarked: “Green hydrogen can represent the ideal solution to decarbonize some key industrial sectors, in particular to produce zero-emission steel in the long term. Today’s agreement, which features three companies active along the entire value chain, is a first step to achieving this important goal. Thanks to its technologies and infrastructure, Snam acts as one of the enablers of the hydrogen supply chain, to contribute to the fight against climate change and the creation of new development opportunities, in line with national and European strategies.”

The implementation of the project will be governed by separate agreements negotiated between the parties in compliance with the legal and regulatory framework.