Austria 27
the national GHG inventory (Anderl et al., 2017a). With the theoretical
lower bound of emission intensity being insufficient for reaching long- term
climate objectives, it is apparent that more radical mitigation options have to
be explored, such as: (i) a major steel output decline requiring substitutes with
similar versatile product characteristics for specific applications, e.g. wood
(composites) or polymers; (ii) the deployment of best- available technology
options combined with carbon capture and storage/usage; (iii) turning to
secondary steel production with sufficient high- quality scrap feedstocks; or
(iv) fuel switches from carbon- intensive to no- carbon processes with competitive relative unit costs for comparable steel grades. The most relevant side
constraint for each of these four options is indicated here in a simplified way.
(For a more detailed discussion see Mayer, Bachner, and Steininger, 2019).
Recently, Austrian steel producers, in particular Voestalpine AG (the largest
steel- producing company in Austria and one of the leaders worldwide), have
acknowledged the last option to be one possible pathway to follow, which
would require switching to new processing technologies within the coming
two decades (i.e. hydrogen- based instead of coke- based oxygen reduction of
iron ores), thereby rendering deep decarbonisation of the sector possible
(Mayer, Bachner, and Steininger, 2019).
The necessary provision of sufficient renewable electricity for hydrogen production puts pressure on the electricity sector. However, it is possible (and
intended) to store hydrogen (either on site or by a third party) and to use it on
demand in iron and steel production. For Austria, and according to stakeholders, electrolysis- based hydrogen generation would mean 33 TWh (terawatt
hours) per annum of electricity devoted to the iron and steel industry in order
to maintain the national steel output at current levels. Current total electricity
generation in Austria amounts to about 60 TWh, having doubled since 1970.
Hence the electrification of this single industry is perceived by stakeholders to
necessitate a massive expansion of the domestic electricity generation system.
In Mayer, Bachner, and Steininger (2019) and Bachner et al. (2018a; 2018b)
we emphasise that this ‘additionality’ in terms of increased domestic electricity
generation can be questioned because the implementation of hydrogen- based
iron and steel technologies triggers relative price and thus foreign trade effects
which lead to lower ‘additional’ domestic electricity supply and demand than
anticipated bottom- up. Likewise, mitigation efforts are endangered if electricity
demand is provided carbon intensively, which would merely lead to a shift of
emissions from the steel industry to the energy supply sector.
Investigating the current electricity mix, hydropower clearly dominates electricity production in Austria, comprising about two- thirds of generated electricity, with fossil- fuel-based generation representing about 18% (in Austria about
75% of its electricity production is from renewables (Oesterreichs Energie,
2018)). In this context it is worth noting the Federal Constitutional Act for a
Nonnuclear Austria (Federal Constitutional Act for a Nonnuclear Austria,
1999), which prohibits the construction and operation of installations for the
production of energy by means of nuclear fission. Moreover, in recent years
the national GHG inventory (Anderl et al., 2017a). With the theoretical
lower bound of emission intensity being insufficient for reaching long- term
climate objectives, it is apparent that more radical mitigation options have to
be explored, such as: (i) a major steel output decline requiring substitutes with
similar versatile product characteristics for specific applications, e.g. wood
(composites) or polymers; (ii) the deployment of best- available technology
options combined with carbon capture and storage/usage; (iii) turning to
secondary steel production with sufficient high- quality scrap feedstocks; or
(iv) fuel switches from carbon- intensive to no- carbon processes with competitive relative unit costs for comparable steel grades. The most relevant side
constraint for each of these four options is indicated here in a simplified way.
(For a more detailed discussion see Mayer, Bachner, and Steininger, 2019).
Recently, Austrian steel producers, in particular Voestalpine AG (the largest
steel- producing company in Austria and one of the leaders worldwide), have
acknowledged the last option to be one possible pathway to follow, which
would require switching to new processing technologies within the coming
two decades (i.e. hydrogen- based instead of coke- based oxygen reduction of
iron ores), thereby rendering deep decarbonisation of the sector possible
(Mayer, Bachner, and Steininger, 2019).
The necessary provision of sufficient renewable electricity for hydrogen production puts pressure on the electricity sector. However, it is possible (and
intended) to store hydrogen (either on site or by a third party) and to use it on
demand in iron and steel production. For Austria, and according to stakeholders, electrolysis- based hydrogen generation would mean 33 TWh (terawatt
hours) per annum of electricity devoted to the iron and steel industry in order
to maintain the national steel output at current levels. Current total electricity
generation in Austria amounts to about 60 TWh, having doubled since 1970.
Hence the electrification of this single industry is perceived by stakeholders to
necessitate a massive expansion of the domestic electricity generation system.
In Mayer, Bachner, and Steininger (2019) and Bachner et al. (2018a; 2018b)
we emphasise that this ‘additionality’ in terms of increased domestic electricity
generation can be questioned because the implementation of hydrogen- based
iron and steel technologies triggers relative price and thus foreign trade effects
which lead to lower ‘additional’ domestic electricity supply and demand than
anticipated bottom- up. Likewise, mitigation efforts are endangered if electricity
demand is provided carbon intensively, which would merely lead to a shift of
emissions from the steel industry to the energy supply sector.
Investigating the current electricity mix, hydropower clearly dominates electricity production in Austria, comprising about two- thirds of generated electricity, with fossil- fuel-based generation representing about 18% (in Austria about
75% of its electricity production is from renewables (Oesterreichs Energie,
2018)). In this context it is worth noting the Federal Constitutional Act for a
Nonnuclear Austria (Federal Constitutional Act for a Nonnuclear Austria,
1999), which prohibits the construction and operation of installations for the
production of energy by means of nuclear fission. Moreover, in recent years