Today, steel production is one of the largest industrial producers of carbon emissions. However, this will soon change at the LIBERTY Ostrava steelworks. „We are taking major steps to achieve carbon neutrality by 2030,“ says Sandip Biswas, GFG Alliance’s Chief Investment Officer and Interim CEO for LIBERTY Primary Steel and Mining, of which LIBERTY Ostrava is part of. Among other responsibilities, Sandip is responsible for leading LIBERTY’s CN30 initiative, which aims to ensure the business has carbon neutrality by 2030.
How is LIBERTY Ostrava going to meet its goals of carbon neutrality?
LIBERTY Ostrava’s GREENSTEEL transformation strategy is making good progress. We took an important step in July when Sanjeev Gupta, our Executive Chairman, signed a contract with the Italian company Danieli for the supply of two hybrid electric furnaces for LIBERTY Ostrava. Sanjeev also signed a Declaration of Cooperation with ČEZ ESCO, part of the ČEZ group, to partner in the identification and development of the renewable energy and hydrogen technologies required.
In the Czech Republic, we’ve also launched the GFG Foundation – a charity founded by Sanjeev and his wife Nicola aimed at inspiring, encouraging and helping future generations into a career in industry - as well as the GREENSTEEL Academy, which will help upskill our existing and future employees for the new technologies we will need to become carbon neutral.
Can you describe the benefits that the new furnaces will bring?
They are essential to our CN30 initiative. The new furnaces, the first of their kind in Europe and which will be in place by 2025, will have a combined capacity of 3.5 million tonnes per annum and will reduce the overall CO2 emissions of the Ostrava steelworks by more than 80% by 2027. The new furnaces will reduce the plant’s reliance on imported coal and iron ore and will have even greater production flexibility.
What else will this take apart from the furnaces?
The two, 200-tonne furnaces are highly flexible in the charge mix they use, from large quantities of Hot Metal and Direct Reduced Iron (DRI/HBI) up to 100% scrap in the second phase of the project, which will follow the planned installation of a 400kV electricity line into the steelworks. This will be made possible by patented electronics technology to control arc current and voltage, allowing for a more efficient and stable power supply to the furnaces.
However, in order to achieve the goal of carbon neutrality it will also be necessary to have green energy. How do you plan to obtain it?
For this purpose, we have entered into a partnership with ČEZ ESCO, which is part of the ČEZ Group. Together we will look for low-carbon and carbon-free technologies for electricity generation, especially in the field of renewable energy sources and industrial use of hydrogen.
How much will the green revolution cost LIBERTY Ostrava?
It will be a huge investment. The acquisition of arc furnaces and other related activities alone represent an investment of CZK 8.6 billion. Ostrava’s transition to GREENSTEEL will be financed through a range of sources including debt, equity, free cashflow and through accessing government support programmes. However, the transformation is critical to meeting our target of being carbon neutral by 2030.
Is this goal achievable, given the unprecedented rise in energy prices?
Of course, in addition to achieving carbon neutrality, we must do everything we can to make the business profitable, competitive and sustainable for the long term. The new technology will be more efficient, which will help us achieve significant savings, while we will also obtain energy from our own renewable sources. In short, it is necessary to look at the transformation holistically so that once it is complete LIBERTY Ostrava will be economically, environmentally and socially sustainable for the benefit of the whole Ostrava region.
The Ostrava steelworks has been part of the GFG Alliance of Entrepreneur Sanjeev Gupta since 2019. How much has it changed since then?
We bought LIBERTY Ostrava at a time of the biggest decline in the steel industry since 2008 quickly followed by the COVID pandemic. In the first two years, we supported the company with a total of CZK 3.6 billion to keep the plant running and people working. In addition, we focused on improving the operational and business performance of the enterprise. In 2021, the business recorded record production results and had a strong start to 2022.
Does investing in the new furnaces also represent a signal to the region that you will continue to develop the company and stay in Ostrava?
Absolutely. We employ six thousand people here and, as in every place where we do business, we strive to be a good neighbour and member of the community. We support local cultural and sporting events, such as the popular Colours of Ostrava festival as well as numerous non-profit organisations. We also continue to reduce the impact of our operation on the environment, as we have done for more than twenty years. I believe that our current investment in GREENSTEEL will ensure that in the future heavy industry will not be seen as a burden on the environment, but as a strategic sector contributing to the prosperity of the region.
Mr Biswas, thank you for the interview.