BHP Makes Another Anti-Pollution Deal With Major Chinese Steel Producer

BHP And HBIS Group, One Of China’s Largest Steel Mills, Will Prioritise The Research On Hydrogen-Based Direct Reduction Technology;

By Su-Lin Tan
  • Newly signed memorandum of understanding will see US$15 million spent over three years on research to reduce harmful carbon emissions
  • Partnership aims to support the Chinese steel industry’s role in achieving Beijing’s ambitions of becoming carbon neutral by 2060

Anglo-Australian miner BHP has signed its second carbon-emissions deal with Chinese steel mills in four months, as China’s top legislative body this week emphasised the importance of reducing harmful emissions. BHP signed a memorandum of understanding (MOU) with one of its major customers, Chinese steel producer HBIS Group, to invest up to US$15 million over three years in a joint study to explore technologies that could help reduce greenhouse gas pollution.

BHP And HBIS Group, One Of China’s Largest Steel Mills, Will Prioritise The Research On Hydrogen-Based Direct Reduction Technology; the recycling and reuse of steelmaking slag; and the role of iron ore lump utilisation to help reduce emissions from ironmaking and steelmaking. The partnership aims to support the Chinese steel industry’s role in achieving Beijing’s ambitions of becoming carbon neutral by 2060.

“The signing of the MOU fully demonstrates the two companies‘ commitment to creating a green and low-carbon future across the value chain, and a shared sense of responsibility to address climate change together,” said Yu Yong, chairman of the World Steel Association, and party secretary and chairman of HBIS Group. BHP’s chief commercial officer, Vandita Pant, said signing the deal with HBIS was one more step towards working out the complex puzzle involving the decarbonisation of China’s steel industry.

This follows BHP’s agreement in November with another mega Chinese steel producer, China Baowu, to invest up to US$35 million in greenhouse gas emissions research. That five-year partnership will focus on the development of low-carbon technologies and ways to reduce emissions in steelmaking. Under their agreement, the deployment of carbon capture, utilisation and storage in the steel sector will also be investigated at one of China Baowu’s production bases.

These agreements are in line with China’s intentions to meet its carbon emissions targets. China has pledged to reduce its carbon dioxide emissions by “at least” 65 per cent from 2005 levels by 2030, and to be carbon neutral by 2060.

On Friday, Premier Li Keqiang, in reading out the Chinese government’s latest work report, told the National People’s Congress (NPC) delegates that energy consumption per unit of gross domestic product (GDP) and carbon dioxide emissions per unit of GDP will be reduced by 13.5 per cent and 18 per cent, respectively, by 2030.

“We will expedite the transition of China’s growth model to one of green development, and promote both high-quality economic growth and high-standard environmental protection,” Li said. “We will draw up an action plan for carbon emissions to peak by 2030. China’s industrial structure and energy mix will be improved.” China will continue to take concrete action to play its part in the global response to climate change.

Premier Li Keqiang

While trying to find cleaner uses of coal as an energy source, Li said the government will also speed up the development of alternative energy sources such as nuclear power. The government will also accelerate the development of national markets for trading energy-use rights and carbon emissions rights, and will introduce special policies on providing financial support for green and low-carbon initiatives.

“As a member of the global village, China will continue to take concrete action to play its part in the global response to climate change,” Li said. BHP is not the only iron miner to support China’s steel industry in its move towards decarbonisation. In December, Anglo-Australian miner Rio Tinto also agreed to invest US$10 million investment is an extension of a 2019 agreement between Rio Tinto, China Baowu and Tsinghua University to develop and implement new methods to reduce carbon emissions in the steel supply chain.

The money will be used to fund the joint establishment of a Low Carbon Raw Materials Preparation R&D Centre to develop lower carbon ore preparation processes, and will help pay for work on carbon dioxide utilisation at the China Baowu Low Carbon Metallurgical Innovation Centre. China’s crude steel output continues to roar ahead, with late-February production rising against last year’s as activity and steel margins improved following the Lunar New Year holiday, analyst S&P Global Platts said last week.

The total national steel output averaged 2.95 million tonnes a day from February 20-28, up 6.13 per cent compared with the same time last year, S&P said, citing steel industry group China Iron and Steel Association. Even though some steel mills in provinces such as Hebei were told to slow down industrial activity during this month’s “two sessions” meetings in Beijing, the reduction will not slow the rate of production of steel for the year, S&P Global Platts said.

This news was originally published at SCMP.

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