'Green' steel financial viability revealed in new ETC report -...

'Green' steel financial viability revealed in new ETC report - affirming that deeply decarbonised steelmaking can begin this decade with concerted action | India Shorts


LONDON, April 5, 2023 /PRNewswire/ — A viable investment case for near-zero emissions primary steel projects is within reach in Europe and North America, according to the latest report from the global Energy Transitions Commission (ETC), making it possible to put the steel sector on a Paris Agreement-aligned emissions pathway by 2030.

Link to the report: Unlocking the First Wave of Breakthrough Steel Investments - ETC (energy-transitions.org)

The global pipeline of near-zero emissions primary (ore-based) steel projects must triple within the next three years to enable 190 million tonnes per annum (Mtpa) of ‘green’ production by 2030 and keep industry emission reduction targets within sight. “Unlocking the First Wave of Breakthrough Steel Investments – International Opportunities: United Kingdom, Spain, France, and the United States” – reveals that practical policy and industry action in four countries can secure a viable investment case in those markets, creating opportunity to grow the pipeline of projects and accelerate existing proposals to final investment decisions (FIDs).

“Investing in commercial-scale green primary steel is already possible this decade. Support for low-carbon hydrogen in the US and the CBAM in the EU offer solid foundations for getting breakthrough projects off the ground in those markets,” The ETC’s chair Adair Turner said.“Given the lead time of steel projects, urgent action is needed to further strengthen the investment case for breakthrough technologies and secure near-zero emissions primary steelmaking capacity before the decade is out.” The UK is yet to publish its response to the US IRA and EU’s flagship green policy framework, with the Government confirming an update will be published in the Autumn.

Green-lighting projects by 2026 is the critical challenge given the lead times involved and the ETC’s report demonstrates that the financial gap for doing so is smaller than previously thought. All four countries can offer a viable investment case, particularly in light of recent policy developments, if action is taken urgently to close the ‘last-mile’ gap. Key insights include:
1) The price of low-carbon electricity, for green hydrogen production and direct process power, is the crucial market factor in determining the international competitiveness of breakthrough iron or steel.
2) Major policy developments in the US (low-carbon hydrogen production tax credit under the Inflation Reduction Act) and the EU (the phase-in of the carbon border adjustment mechanism) put a viable investment case within reach in the US, Spain, and France, respectively.
3) Actions such as government support for capital expenditures and forward purchase agreements at an initial premium (particularly from corporate offtakers) offer practical ways to close the financial gap for projects in all four countries in the near-term. "


So.... lets take a look at MGT:
1) Direct access to green power = TICK, access to green hydrogen (500m SA green hydrogen project) = TICK|
2) Major Policy developments (SA Magnetite Strategy 2023) = TICK
3) Government support for capital expenditures (labour government) + MOU/PUrchase agreements= Likely tick in 12 months time.

MGT is poised for success. Global trends are in our favour. Management just needs to work their magic and get us into production