LEVEL PLAYING FIELD: THE SUSTAINABLE WAY OF SOLVING ... · • Use of lightweight, high-strength steel, Raex 400, reduces container weight by 800 kg • Savings for container end-user*:

LEVEL PLAYING FIELD:THE SUSTAINABLE WAY OF SOLVING ENVIRONMENTAL PROBLEMS

Influencing policymaking: Towards a healthier Baltic Sea and low emission maritime transportHelena Kivi-Koskinen

19.05.2011 www.ruukki.fi | PUBLIC | H.Kivi-Koskinen2

Content

1. Ruukki in brief

2. Sustainability 3. Level Playing Field


Ruukki in brief

• Rautaruukki supplies metal-based components, systems and integrated systems to the construction and engineering industries.

• The company has strong know-how in special steels and a wide selection of metal products and services.

• Our business areas are construction, engineering business and steel business.


Ruukki todayConstruction

Steel production and processing

Sales and services

Engineering• Net sales of €2.4 billion in 2010• Strong presence in Nordic

countries and Eastern Europe • Growth focus on emerging

markets• Personnel around

11,700 in 27 countries

Sustainability at Ruukki

Corporate responsibility in business operations


Climate change creates challenges and opportunities for Ruukki

Energy-efficient construction

Renewable energy production

Fuel savings arising from slimmer structures in mobile machines and material production with minimum emissions


Research and development –focus on energy efficiency

• Focus areas of our R&D

– Construction efficiency, especially energy efficient solutions

– Cabins, booms and equipment for the energy industry

– High-strength, wear-resistant and coated steels for the engineering and automotive industry and construction

• In 2010 we invested €27m in R&D

Ruukki’s energy panels reduce energy costs e.g. a building's heating costs.


Energy-efficient office building with steel solutions

• Energy saving potential 40-70 %– Lightweight wall and roofing elements

• Optimal thermal insulation• High quality windows and frames• Good air tightness

– Efficient heat recovery from ventilation– Optimum use of mass in structures– Advanced lightning solutions

• Customised steel structures provide alternatives to use renewable energy

– Solar energy panels in facades and roofing

– Integrated use of geothermal energy in steel foundations (piles)

Environmental impacts of steel construction

+ Low energy consumption in use

+ Recyclability+ Strong and lightweight

structures+ Shorten construction time+ Less on-site waste


• Use of lightweight, high-strength steel, Raex 400, reduces container weight by 800 kg

• Savings for container end-user*:– €72 600– energy: 60 000 litres of fuel (2 000 GJ) – CO2 reduction: 160 t

• Lifetime CO2 and energy savings are thirty-fold compared to production of a container

* Tandem trailer, 150,000 km/a, lifetime 10 a, €1.21 per litre diesel (EU average 10 Oct 2008)

More efficiency in transportationCase: Lifetime savings of a container

Energy consumption and CO2 emissions in

container production

Container’s lifetime CO2 and

energy savings in operation 9.6%

Container’s lifetime energy

consumption and CO2 emissions

CO2 35 x Energy 27 x73 GJ / 4.6 t

2 000 GJ

160 t

19 000 GJ

1 496 t


LEVEL PLAYING FIELD:The sustainable way of solving environmental problems


Development of the environmental legislation

Regulation of production

Regulation of product life cycle

stricter limits more regulation

Development

IPPC/IED BREFBAT

VOC

RESWhiteCertificates

NEC

CO2 ETS

Landfill Waste LoW&EoW EMAS

SO2/NOx IMO

EQSEnergy&Material

EfficiencySoil

E-PRTR

EnvironmentalLiability GPPEcoDesign

EPBD EcoLabelling

Eurovignette

EnergyLabelling

ELVWEEE

CLPREACH

RoHS

Packaging


19711972

19731974

19751976

19771978

19791980

19811982

19831984

19851986

19871988

19891990

19911992

19931994

19951996

19971998

19992000

20012002

20032004

20052006

20072008

0

50

100

150

200

250

300

calendar year

Source: EUR-LexCategory: 15.10 EnvironmentCovering:• General provisions and programmes• Nuclear safety and radioactive waste• Water protection and management• Monitoring of atmospheric pollution• Chemicals, industrial risk and biotechnology• Management of space environment and resources• Conservation of wild fauna and flora• Waste management and clean technology• International co-operation

Number of legislative dossiers adopted in EU per calendar year

Amount of environmental agreements and regulation is increasing

Steel business is carbon leakage sector



No global level playing fieldMARPOL 73/78 ANNEX VI Reg. 14S/ECA – SOx Emission Control Areas

• Countries with part of the coast in ECA• Countries with water only in the ECA

• The Emission Control Area• Countries without coast in ECA

• Countries with part of the coast in ECA• Countries with water only in the ECA

• The Emission Control Area• Countries without coast in ECA


SO2 emissions from maritime transportation year 2000

Source: Finnish Federation of Industries EK

• No level playing field within Europe, although the environmental and health impacts are the same


0,0

1,0

2,0

3,0

4,0

5,0

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

International (and other EU countries)If applicablethe English Channel, North Sea, Baltic Sea

S02 requirements in different areas havetoo wide margin

Source: Finnish Federation of Industries EK


RAAHE

LuulajaKostamus

GdyniaGdansk

Storugns

Stettin

Iron ore and pelletsLimeCoalCoke

Koverhar

USACanadaAustraliaAfrica

St. Petersburg

Kaliningrad

Ruukki’s raw materials to Finland 2010 Total maritime transportation 5 620 k tons

• Finland is dependant on sea transports

• 75% of import and 89% of export is transported by sea


Raahe

Lappohja

Szczecin

Hull

Antwerpen

USA, Muut kaukomaat

Ravenna

Drogheda

BilbaoAveiro

Fredericia

RostockHampuri

Vejle/Kolding

Hämeenlinna

RotterdamTerneuzen

Koverhar

Ruukki’s product transportationTotal maritime transportation 1 046 kt

•There is long distance to main markets


Transportation costs are higher in Finland

• Severe ice conditions increase the transportation costs in Botnian bay (ice strengthening, ice blocks)

• Number of ice days in Raahenearly 120 on average year

• Botnian Bay is shallow, ships are smaller

Ice Extent in Different Winters


No possibility for modal shift in Finland

• Study shows that modal shift is no option for Finland

• Finnish exporter industries are part of carbon leakage sector, no possibility to transfer the costs to product prices

Figure 5: Initially selected internal freight corridors where modal shift may occur

Source: COMPASS: The COMPetitiveness of EuropeAn Short-sea freight Shipping compared with road and rail transport. EuropeanCommission DG Environment. 18 August 2010


Modal shift increases emissions elsewhere

• If emissions increase elsewhere, is it necessary to have 0,1 % SO2 requirement at open sea?

Figure 7: Freight corridors that may increase disproportionately.

Source: COMPASS 2010


Emission control costs increase 30-50% in maritime transportation• Estimated bunker fuel costs to

increase by 60-70%• Gas oil imports to EU will

increase 65%

• Costs equivalent of 4 000-24 000 man-year in Finnish external trade sector. In metals industry: 8,5 % of the manpower

Source: COMPASS 2010


Technical solutions uncertain as mitigating measures

• Scrubbers only in test phase, no COSS committee procedure for any technology yet

• Exhaust gas abatement technology is only a solution for 1/3 of the Finnish fleet. For those ships it means an investment of 162 million Euros

• Retrofitting is possible during maintenance. The maintenance cycle is three years.

• New infrastructure needed in harbours– LNG ships need refuelling infrastructure– Scrubbers need reception facilities


Industry welcomes global sulphur limits in 2020/2025

• Concerns of industry remain serious:– distortion of competition within EU and globally– modal back shift in EU/no option for modal back shift in

Finland– technical solutions seem to be unrealistic in 2015– new technology needs compensation -> compliance with

existing rules of state-aid and competition• Could the sulphur limit be 0,5% instead of 0,1%?• Implementation of the Marpol sulphur rule and the EU

directive must be postponed to be inline with global restrictions

Documents

LEVEL PLAYING FIELD: THE SUSTAINABLE WAY OF SOLVING ... · • Use of lightweight, high-strength steel, Raex 400, reduces container weight by 800 kg • Savings for container end-user*: