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Green Jobs

Writer's picture: Barrie WilkinsonBarrie Wilkinson

Steel production currently accounts for 6-8% of global emissions and demand for steel is forecast to grow as the developing world continues to build out its infrastructure. The industry is generally described as one of the hard-to-abate industries with stubbornly high emissions but so-called green steel now offers some hope that emissions can be reduced even while demand for steel grows.


Green steel is made from hydrogen instead of the traditional method of using coke (a derivative of coal). But in order for the hydrogen to be considered green it needs to be made with electricity from clean power sources such as renewables, hydro or nuclear.


Circular supply chains


Supply chains some times work in loops. Consider what needs to be done to fully decarbonize the production of wind turbines:

1) Wind turbines are made from steel so to produce emission-free wind turbines they need to be made from green steel,

2) To produce green steel to make our wind turbines we first need to produce green hydrogen,

3) To produce green hydrogen (from water) we need access to electricity from truly renewables sources (such as carbon-free wind turbines)


If any one of these 3 steps contains fossil fuels then we effectively dirty the whole cycle.


Hope from the North


The Swedish steel producer SSAB recently delivered the first batch of green steel to Volvo a Swedish car manufacturer. And the green hydrogen they used in the steel-making process was created using Sweden's clean power grid. The SSAB steel plant, known as HYBRIT, is a marvel of science. It produces plumes of water/steam instead of CO2 and has no visible smut on the exterior of the factory.


SSAB's HYBRIT Plant


Sweden's power grid is largely based on nuclear and hydro and according to my data Sweden is one of the few countries in the world with a power grid which is already close to hitting net-zero emissions. In other words Sweden is both technologically advanced in its green-steel technology and practically advantaged in having access to a clean power grid.


Are we manufacturing goods in the right locations from an emissions perspective?


Many countries lack access to hydro power and some countries are actively turning their back on nuclear power. This leaves their decarbonization strategies reliant on the roll-out of wind and solar power. But wind and solar power are intermittent sources and at present need to be combined with natural gas which can be turned up and down to smooth the load coming from renewables. In short, we'll need a lot more carbon-capture capacity to come online before a renewables-plus-gas strategy can be considered a low-carbon one.


If countries are slow to clean up their power grids they are also poorly positioned to manufacture green hydrogen and hence green steel. Manufacturing heavy goods like wind turbines also consumes a lot of electricity during the assembly process creating more emissions if the power grid is fossil-fuel powered.


You can examine the emissions of the power grids of individual countries by selecting from the drop-down box in the chart below. It doesn't paint a pretty picture particularly when you consider where most of our heavy goods are currently manufactured.


The war for green jobs


Like all other developed nations, Sweden has shifted manufacturing jobs to low-cost locations because their domestic labour costs were comparatively high. But if we start putting a price on carbon emissions, at what carbon price might that economic calculation start to swing back in favor of relocating manufacturing jobs back in Sweden? In fact could other European countries ever reach the stage where they relocate manufacturing jobs to Sweden because of their superior green technology even though Swedish wages are higher. It seems absurd to even consider such an idea in a world that is focussed so relentlessly on bottom-line profits. The battle for "green jobs" to date has been defined too simply in terms of who can crank out the most wind turbines and solar panels ignoring the fact that the factories being used to do so might be fossil-fuel powered or that the steel being used is coming from coke-fueled steel mills. Perhaps its time for a more nuanced discussion about the location of manufacturing jobs with a full examination of the emissions life cycle analysis of relevant product systems

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