New Lords of Circular Carbon: ArcelorMittal, EU complete financing of Steelanol project

May 18, 2020 |

In Brussels, the European Investment Bank, with the support of the European Commission, has granted a EUR 75 million (nearly $82 million USD) loan to ArcelorMittal for Steelanol, the EUR 165 million ($180 million USD) industrial-scale demonstration plant based on LanzaTech’s process, capturing waste gases from the blast furnace and biologically convert them into recycled-carbon ethanol.

LanzaTech, ArcelorMittal, Primetals and E4tech are project partners of long-standing and we last wrote of them here and here. Ultimately, the project will create more products in ArcelorMittal’s Carbalyst family of recycled carbon chemicals, and could include jet fuel. Even more about ArcelorMittal’s partnership with LanzaTech and Primetals is here.

Once complete, the plant is expected to produce up to 80 million liters of recycled-carbon ethanol a year. The new installation will create up to 500 construction jobs over the next two years and 20 to 30 new permanent direct jobs. A COVID-19 pause has been lifted, construction is underway again, and the project is expected to be completed in 18 months.

The financing backstory

The EIB loan covers two projects, the Steelanol element and Torero, a EUR 50m large-scale demonstration plant to convert waste wood into bio-coal, partially replacing the coal currently injected into the blast furnace. In the early stage, the Torero plant will be able to convert up to 60,000 tons of waste wood into around 40,000 tons of bio-coal every year. This volume will be doubled in a second stage of the project, after the start of the first Torero reactor. Torr-Coal, Renewi, Joanneum Research Centre, Graz University and Chalmers Technical University are partners and that portion is expected to be operational by the end of 2022.

Overall, the two projects total EUR 215m and will reduce up to 350,000 tons of CO2 emission per year in the first phase. That equal to 250,000 passenger vehicles being driven for one year.

The EIB investment supported by InnovFin Energy Demonstration Projects and financed under Horizon 2020 and the NER 300 funding program of the European Commission.

The Steelanol project, when completed.

The InnovFin and EIB backstory

InnovFin Energy Demonstration Projects is a venture financing instrument designed to support the demonstration of innovative clean energy projects. Given the high risk involved, these EIB loans are guaranteed by the European Commission in the event of default. InnovFin EDP is financed by Horizon 2020 and NER 300 funds.

The European Investment Bank makes long-term loans available in support of EU policy objectives.

Construction at the Steelanol project is well underway, and expected to complete in 2021.

A note about Steelanol

We just love the name Steelanol — a portmanteau of “steel” and “ethanol”. Usually, people dub renewables with complex chemical names, of the hexyoxymethyethyalidocius type. In a world of Pink and Beyoncé, renewables are the Englebert Humperdincks.

Real people say “vinegar”, not “acetic acid”, “gasoline” not “catalytic reformate”, we say “solar” not “heliophotonic current generation process (HCGP)”, and we say “hydro” not “oxygen hydride kinetic transport electron stripper technology (OHKTEST)”.

Steelanol is direct, and it references as a starting point something we know that we need — in this case, steel — and positioning the fuel as the user of pesky residues that steel production creates.

What next? Milkane, for methane captured from anaerobic digesters at dairy farms. Friesel, for renewable diesel made from used french fry oil. Barnosene, jet fuel made from construction industry sawmill residues. Lawnogen, hydrogen fuel made by water-splitting urban run-off.

The Circular Carbon story

There are carbon rings and there is circular carbon, and they sound alike but are different. Allow me to clarify, from the material received in Digestville from the advocates of each.

Your carbon can be in a ring but not circular, or it can be not a ring but still circular, and you can use circular carbon and make it into a ring. The argument for using circular carbon is not circular, but it is a cycle, and you can use circular carbon to drive a wheel instead of using non-circular carbon. If you lube your rings with carbon rings you will improve your cycle, and if you lube with circular carbon you will improve your lifecycle.

So, we’ve cleared that up.

The Circular Carbon Story, this time in English

In the old-fashioned world of petroleum, companies extract virgin carbon from the ground, and turn it into waste when it is released as skyfill.

In the new-fangled world of industrial biotech, companies extract waste carbon just before it is released as skyfill, and turn it into virgin carbon used in fuels and chemicals. One man’s waste becomes another man’s pudding, so to speak.

The good news is this: when we grab waste carbon to make virgin carbon, we displace that equivalent amount of petroleum, forever. The petroleum we would have extracted for that fuel or that chemical, stays in the ground.

And, if we use ethanol to make a chemical, say ethylene, we have made a physical building block for Glad Wrap, rubber extraction, plastics, refrigerants, you name it. Even for the religiously inclined, there are applications, because you can change water into wine by adding Glad Wrap — chemically speaking we’re not kidding, although not something you can accomplish working over a sink at home, which is why you can put a plastic film over a glass of water and a 14 year old can still drink the contents.

We call it circular carbon because the carbon is captured and sent for one more trip around the pinball table, scoring double points so to speak, as opposed to the carbon in a petroleum, which always goes down the pinball drain. So, think of the Steelanol process as a highly automated set of can’t-miss Flippers, and what you are racking up as an impressive Carbon Score because of your collection of Skill Shots. You have become a master of Pinball Carbon, a bonus game is yours — enjoy.

Reaction from the stakeholders

The project partners are pleased and delighted, as you might expect.

EIB Vice-President Ambroise Fayolle said, “Even in the current difficult times, Europe keeps its ambitious climate targets and the EIB, the EU climate bank, is committed to continuing to be a key partner. In particular in the steel industry, it means finding new ways to power machines and processes that are essential for reducing carbon emissions. Thanks to a strong partnership with the European Commission, the EIB is very pleased to support the Steelanol and Torero projects in their efforts to work on more climate friendly and competitive processes.”

Mariya Gabriel, European Commissioner for Innovation, Research, Culture, Education and Youth, said, “This EU backed loan will enable us to demonstrate that European steelmaking plants can be competitive while reducing carbon emissions and help us attain our climate goals. We need to be the front runners and to enhance our competitiveness — our steel industries support more than 300,00 jobs across the EU.

More than this, if we invest in European research, education and innovation we can demonstrate the global leadership that can secure and strengthen these industries and the people and communities they support for future generations.”

Geert Van Poelvoorde, CEO ArcelorMittal Europe – Flat Products said, “To date we have committed more than €250 million to developing and testing technology that will help make steelmaking carbon neutral, leveraging our R&D facilities around the world. These two projects are our first large-scale implementations of new breakthrough solutions, as part of our commitment to reduce carbon emissions and transform steel production. With the EIB and European Commission’s support, we can scale up technologies and transition steel to carbon neutrality, and thereby play a significant role in helping Europe achieve its green ambitions.”

Clara De La Torre, Deputy Director-General for DG Clima, added, “the industrial and energy transformation is vital to our economy, and is part of how the union intends the Green Deal to unfold. It’s a very good opportunity, very important to abate steel production greenhouse gases, and the is very disruptive technology.”

Jennifer Holmgren, CEO LanzaTech said, “The European Commission and the EIB continue to play a key role in enabling a new carbon economy for Europe by supporting innovative projects. Chemicals and liquid fuels, especially in the aviation sector, still need a source of carbon, while power generation can and should be fully decarbonized. Carbon recycling gives us a choice as to where the carbon in our products comes from: fresh fossil or reused carbon emissions. Our groundbreaking partnership with ArcelorMittal highlights their continued leadership in helping to create a low carbon economy in Europe.”

Carl de Maré, VP, Head of Technology Strategy at ArcelorMittal Group, noted that it was “a long journey to get this to point with the financing, and we are really happy, moving now as we are to implementation. This is tapping into waste streams, both for Torero and Steelanol, in Torero we are focused on what is celled B and C-grade wood waste, problematic wood, from demolition, often painted or coated, that typically has to be incinerated.”

More on the story.

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