Vietnamese steel manufacturers all say they are striving to have a “green steel industry”. However, this would mean higher production costs and lower competitiveness.
Vietnam still has not set standards for energy, material and water consumption for manufacturing steel. Therefore, it would be very difficult for them to reduce the material, energy and water consumption, according to Pham Chi Cuong, Chair of the Vietnam Steel Association VSA.
Big steal mills with modern technologies do not always mean the effective use of resources, because of the limitations of the labor force in accessing new technologies. The conclusion has been made by the experts of the United Nations Industrial Development Organization (UNIDO) and VSA after conducting a survey on the current situations of 18 steel enterprises.
The surveyed enterprises include the subsidiaries of the Vietnam Steel Corporation, Vietnam-Italia Steel, Pomina, and Hoa Phat.
According to Chu Duc Khai, an expert from UNIDO, in Vietnam, the steel consumption level is 140 kilos per capita, or ten times lower than that in South Korea, Japan, Czech and Italy. Therefore, there is still more “room” for Vietnam to develop the steel industry.
However, the survey has pointed out the weak competitiveness of Vietnam’s steel production. Indexes show the steel laminating, electricity and electrode consumption and the volume of scrap steel needed to churn out one ton of steel are far below the average level in the world. Meanwhile, Vietnam’s productivity is also much lower than the world’s average level.
Khai said that only three out of the 18 surveyed enterprises have the energy consumption level per one ton of ingot steel lying in the competitive range of the world – 1.6-2.4 GJ per ton.
One enterprise was found to be consuming up to 300 kilos of coke coal to churn out one ton of laminating steel, which means the energy needed to create one ton of steel reaches 16 GJ, an overly high level. The enterprise also has high intensity of greenhouse gas emissions, about 1500 kilos of CO2 per ton of ingot steel, while the average global level is 900 kilos of CO2.
Experts have also pointed out the relation between the enterprises’ ownership and the energy consumption level. Nine private enterprises were believed to consume the least energy (less than 3 GJ per ton of steel), while state owned enterprises all consumed more than 3 GJ.
Several months ago, the Electricity of Vietnam (EVN) sent a report to the government, noting that the steel industry companies, which use backward technologies, are the biggest electricity consumers. As a result of the report, steel mills have been considered as the main “culprit” behind the electricity shortage in Vietnam.
Vietnam’s steel mills have a reputation for focusing on production and environmental protection. Steel mills face many challenges such as water and material price increases, and increasing requirements from people and management agencies on pollution control.
However, experts have discovered that 50 percent of scrap steel grounds have not concretized, while solid wastes like cinder or dust have not been recycled for use. Inappropriate attention has been given to the minimizing of persistent organic pollutants such as U-POP-dioxin/Furan/PCB.
The key problem lies in the fact that many steel mills are small scale, with a capacity of 200,000-500,000 tons per annum. Therefore, if the enterprises have to make heavy investments on environment protection, the production costs would increase while the sale prices would not be competitive.
Khai has admitted that renovating technologies is not an easy task because it would require a huge capital. Therefore, the next step is to establish a “green industry group” in the steel industry which will be responsible for suggesting solutions to reduce the material and energy consumption.
