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by
Jordy Leo
- January 17, 2024
Erdemir Group [EREGL:TI], Turkey’s largest steelmaker, has announced a USD3.2bn investment plan to achieve greener production and emission reductions, as reported by Reuters on January 11. Under the plan, the group will reduce its emissions by 25% by 2030 through a series of green initiatives including building two new electric arc furnaces (EAFs) at its facilities in southern and northern Turkey, using biomass and natural gas for power generation to reduce coal consumption, developing 1,000 megawatts of solar capacity, and investing in carbon capture technologies. According to Erdemir, the two new EAFs are set to elevate the group’s raw steel production to 13.5 million tons annually from 9.5 million tons now. It also stated that these green initiatives will boost the firm’s competitiveness in global markets.
As Europe’s largest steel supplier and the seventh largest globally in 2021, Turkey looks to decarbonize its steel industry to brace for the incoming carbon border tax introduced by the EU, its main destination of iron and steel exports. Under the EU’s carbon border adjustment mechanism (CBAM) effective from October 2023, importers from carbon-intensive sectors will be levied carbon border taxes since January 2026 to undertake the same carbon pricing costs borne by EU enterprises. Compared with traditional blast furnace steelmaking, EAFs could effectively reduce around 75% of Scope 1 and Scope 2 greenhouse gas emissions at the crude and hot-rolled steelmaking phases. Moreover, Turkey also plans to launch the first pilot phase of its own emissions trading system (ETS) in 2025, aiming to prompt emission reductions and investments in cleaner technologies.
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