Loan to boost Swedish steelmaker's environmental gains
The Swedish steel producer, SSAB, is expanding its environmental programme aimed at improving its energy efficiency, waste handling and use of chemicals. NIB is financing 40% of the initiative with a 5-year-maturity loan totalling EUR 48 million.
The loan will be used for environmental investments at SSAB’s production plants in Oxelösund, Borlänge and Luleå in Sweden.
A major part of the financing is being spent on purchasing new hot stoves for SSAB’s plant in Oxelösund. Hot stoves from the blast furnace generate hot air going into the blast furnace. The stoves are heated by the energy-rich gases from the blast furnace.
“For several years, SSAB has carried out different kinds of environmental improvements at our plants. By investing in new hot stoves, we will become more energy effective and can use the excess amount of gas to produce more electricity,” Klas Lundbergh, Environmental Manager at SSAB’s plant in Oxelösund explains.
“Steel production is extremely energy-consuming and we always look for methods to save energy. With the new hot stoves we use less energy and avoid using fossil fuels like coal or oil as sources of energy at our plants,” Mr Lundbergh says, and adds that with the energy-rich gases, SSAB’s steel plant in Oxelösund can produce 50% of all electricity needed at the plant.
Excess heat utilised by local community
SSAB’s environmental programme has a great impact on the local community, not only in the form of cleaner air and water, but also by using the excess heat from the plants in heat and power plants for producing electricity and central heating for the local communities. Normally steel production requires so much heat that even doing away with the excess heat would require energy.
Hans Olsson, Environmental Manager at SSAB’s plant in Luleå, says that the excess heat from his plant makes a big difference in the municipality there.
“In Luleå, a municipality with 75,000 inhabitants, the hot water produced in the heat and power plant accounts for more than 90% of the heating needs in the municipality,” Mr Olsson says.
All the central heating in Oxelösund comes from SSAB’s steel plant. In total, 829 GWh of central heating were supplied from SSAB’s heat and power plants in 2008. This corresponds to approximately 280,000 cubic metres of wood pellets or similar fuel.
It is estimated that the investment programme will result in a yearly reduction of CO2 in the amount of 155,000 tonnes. Improved energy efficiency at the plants also means reduced emissions of nitrogen oxide and reduced consumption of chemicals.
“The biggest environmental impact of this programme would still be global because by always striving to save energy, we use much less coal and reduce emissions into the atmosphere,” Mr Lundbergh says.
High environmental standards make good business sense
“Our surroundings put pressure on us to always improve our environmental standards. Not only the government, but also the local community and our customers are conscious of the importance of taking care of the environment. Setting high standards for the handling of waste and reducing pollution makes good business sense in the long run. Not only is it cost efficient to reduce energy consumption, it also gives us an edge on the market to have higher environmental standards than our competitors,” Mr Lundbergh continues.
NIB’s Senior Manager of loan origination, Lars Synnes, agrees with Lundbergh and points out the importance of always striving to reduce the negative environmental impact of industrial projects.
“SSAB is a big customer for NIB. We have a relationship dating ten years back. The environmental investment programme is in line with the increasing focus of both parties on environmental technology. Considering that NIB is financing around 40% of the project, our loan contributes to a greenhouse gas emissions reduction of as much as 62,000 tonnes CO2 per year,” says Mr Synnes.
Another important part of the programme is the improved treatment of crude iron from the blast furnace, which facilitates better handling of the production flow and thereby minimises the downtime on the blast furnace.
“The steel production process is like a chain. A dysfunctional link hinders the process and will lead to increased pollution. With the improved granulation system, the production will go more smoothly and will result in less pollution in addition to the technical advantages of more efficient production,” explains Mr Lundbergh.
A new tank vacuum system will also result in a significant reduction in pollutants released into the sea, and the environmental investment programme also includes initiatives towards more efficient handling of hazardous waste, replacements of outdated vehicles with more environmentally friendly ones, as well as a range of smaller improvements.