Jakarta (ANTARA) - PT Krakatau Steel Tbk\u2019s Chief Operating Officer,\nSidik Darusulistyo, considers the availability of safe and affordable\nclean energy as the primary factor in supporting the steel industry\u2019s\ntransition to low-emission production or green steel.<\/p>\n
\u201cIn the end, there are three things that must be considered. Energy\nmust be secure (safe), then affordable, and only then green,\u201d said Sidik\nduring a discussion at the Bandung Institute of Technology (ITB) School\nof Business and Management Jakarta Campus on Thursday.<\/p>\n
According to him, the transition to a green steel industry cannot be\nrushed because companies must still maintain profitability and\ncompetitiveness amid high energy and raw material costs.<\/p>\n
He stated that the steel industry has relatively thin profit margins,\naround 5-7% for operational profit before interest, taxes, depreciation,\nand amortisation (EBITDA), and net profit of about 3-5%, making\ncompanies more cautious in selecting decarbonisation technologies.<\/p>\n
\u201cBecause the margins are thin, we will not take too great a risk. We\nmust use technologies that are already mature and proven,\u201d said\nSidik.<\/p>\n
He explained that the steel industry\u2019s cost structure is heavily\ninfluenced by energy and raw material prices, while natural gas prices\nin Indonesia are still higher than in several competing countries.<\/p>\n
According to him, natural gas prices in Indonesia can reach around\n$6.5 per million British Thermal Units (MMBTU), even higher when using\nliquefied natural gas (LNG), whereas in China they are below $2 per\nMMBTU.<\/p>\n
\u201cRaw materials and energy drive steel costs. We must stay\ncompetitive,\u201d he said.<\/p>\n
Sidik added that Krakatau Steel is currently beginning to prepare\ndecarbonisation steps to face global carbon trade policies such as the\nCarbon Border Adjustment Mechanism (CBAM), which has started to be\nimplemented in several export destination countries.<\/p>\n
The company has also prepared a gradual decarbonisation roadmap until\n2050 through energy efficiency, industrial digitalisation, utilisation\nof renewable energy, reactivation of Direct Reduced Iron-Electric Arc\nFurnace (DRI-EAF) facilities, and development of low-carbon technologies\nsuch as carbon capture utilisation and storage (CCUS) and hydrogen.<\/p>\n
\u201cCBAM has been in effect since last January, and penalties for CO2\n(carbon dioxide) production will develop. So this is one of our\nconsiderations to continue exporting,\u201d revealed Sidik.<\/p>\n
On the same occasion, ITB Professor Emeritus in the Faculty of Mining\nand Petroleum Engineering, Prof.\u00a0Zulfiadi Zulhan, said that developing\ngreen steel requires support from large amounts of clean energy,\nespecially to support green hydrogen production.<\/p>\n
According to him, the price of green hydrogen is currently still in\nthe range of $5-7 per kilogram, while to be competitive for the steel\nindustry, it ideally needs to be below $1 per kilogram.<\/p>\n
He explained that producing 1 million tonnes of hydrogen-based steel\nis estimated to require around 75,000 tonnes of hydrogen and an\nelectricity supply of up to around 453 megawatts to support the\nproduction and steel melting process.<\/p>\n
\u201cIf that (energy supply issue) is not resolved yet, don\u2019t talk about\ngreen steel first. Energy is the most important,\u201d said Zulfiadi.<\/p>\n
In addition to energy challenges, he assessed that Indonesia still\nfaces technology dependencies from abroad, including electrolysis\ntechnology, electric arc furnace (EAF), and hydrogen-based burner\ntechnology for the steel industry.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/krakatau-steel-coo-affordable-clean-energy-is-key-to-green-steel-transition-1778148932", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }