You're IN!

You can now access the whitepaper

Click to below to download the PDF or keep scrolling to read it in the browser format

Setting the stage

Energy prices spike around the world

Analysts are referring to today’s energy crisis as the perfect storm. Last year, extreme summer and winter weather resulted in lower-than-normal gas reserves. Now, just as the energy demand is rising from the increased industrial production for the first time since the pandemic, Russia wages war against Ukraine. This poses major problems, especially in Europe as Russia accounted for 31 percent of the European gas supply in 2020

The energy price index has already risen exponentially in the last two years, by 50 percent between 2020 and 2021.  And it’s not expected to cease; rather, prices are expected to stay higher for longer. In 2022, energy prices are projected to increase 50 percent overall and coal, natural gas, and crude oil are projected to increase by 81 percent, 74 percent, and 42 percent, respectively. Projections for 2023 are also expected to be an average of 46% higher. 

Rising costs hitting refractories hard
The process of creating high-temperature products requires massive amounts of energy, and with these rising prices, refractories are taking a hard hit. Rising prices are pushing the industry to rethink how they use energy on-site. Already, refractories are reporting increases in their energy bills, one referencing an increase of 700% alone

In this industry, shifts cannot, and will not, happen overnight. With a kiln, for example, stopping production can be more costly than continuing as a large amount of energy is required to restart. This is forcing the industry to look for alternatives to reduce their consumption.  

Reducing energy in refractory production today

Every day, new methods are being implemented to help offset the rising costs of energy. These five new trends and approaches include factoring in durability, insulation, green bricks, castables, and easier-to-install materials in every formulation.
Durability
The end goal in all high-temperature production is to enhance the performance and durability of products to make them last longer. This will, in the long term, reduce the costs of raw materials and outweigh the more expensive upfront investment being made to make this switch.  

Many in the industry have already seen success in this regard with: 
  • Replacing minerals with synthetic products, such as switching tabular alumina from mineral-sourced materials like bauxite, andalusite, or even MgO; 
  • Decreasing the use of MgO and dolomite basic bricks in both cement and steel production; and 
  • Adding non-oxide materials and additives to formulations.
Approaches like these are already showing promising results, being easier to use with more predictable behaviour. 
Insulation
For years, insulation refractories were not considered a priority, but now energy-intensive industries, like steel plants, are turning their focus to insulation materials because of the critical role they can play in cost savings.

One trend is the switch from traditional insulation refractories to modern solutions, like ultralightweight castables, to reduce energy and cut the dissipation of the heat out of kilns. This has been particularly successful in lowering energy in steel and cement plants.

Another is the development of customized thermal studies with insulation materials to match. Offering tailor-made products based on equipment, process, and precise requirement from the final producer brings immense value when it comes to energy reduction in refractories.
Castables
Refractory production, especially with bricks, is a high-energy process that needs to be controlled, or adapted, to reduce the amount of energy required. To rely less on brick, the industry is shifting towards using more monolithic castables that drop the energy consumption in both refractories and end-market production.

Because bricks need to be fired or tempered and castables only need to be mixed, castables prove to have impressive results, including the potential to:
  • Save time with faster installation
  • Require less energy in installations and production
  • Save costs with fewer people on site and lower energy requirements
  • Have equivalent capabilities and better performance (as compared with brick)
Additionally, many refractories have prioritized designing better-unshaped products. This not only brings benefits for the end-markets, like faster interventions and shorter maintenance stops but also for the refractory manufacturer.
Unburnt bricks
In the case where brick production is still needed, prioritizing unburnt, or ‘green’, bricks can reduce the amount of energy required. Green bricks require less thermal treatment and can be tempered rather than fired, reducing the temperatures needed in the process.

With green bricks, additives are changing the game. Additives:
  • Support green brick transportation without the need for firing, reducing tempering from >1200ºC down to 200/300ºC;
  • Help ensure the properties and resistance needed for transportation and installation; and
  • Support the creation of better-unshaped materials that are easier to install and use.
Ultimately, additives make it possible to massively reduce the energy required to produce green bricks, without having to compromise on density, quality, or capabilities.
Easier-to-install materials
The most common mistakes in the use of monolithic materials lie in human error. Consider the two following missteps.

  • Mixing in water to increase flow capabilities. Often time, excess water is added with the hopes of achieving better flow during castable installation on site. But this approach does not work. Water is the number one energy in refractories and adding water could ruin the entire process. The use of fluidificant, dispersing agents as additives, is a better alternative.

  • Using the wrong additives to speed up the setting process. Many resolve to use additives to increase the speed of setting but are unaware that the use of the wrong additive could result in adverse effects, such as the setting process occurring too quickly, or not at all. The solution is to rely on additive packaging that focuses on easy-to-work, ‘closed’ formulations to ensure the same performance, no matter the conditions (humidity, ambient temperature, etc). Ultimately, to avoid performance challenges, it’s best to use easy-to-install materials and consider the big picture of the formulation from the start.

The future of energy reduction is green hydrogen

When we make the switch to using green hydrogen, we rely less on natural sources of gas that are difficult to obtain and replenish. With green energy, we can instead rely on energy generated from wind farms and solar panels to produce hydrogen. This approach to creating hydrogen is more sustainable and a key to the net zero emission goals set around the globe.
The challenges ahead
Hydrogen has varying capabilities in creating heat that make it difficult to transport, store, and use. To make the shift from gas to hydrogen, the industry first needs a solid implementation approach, that considers overcoming the following challenges:

  • Higher temperatures. Hydrogen reaches far higher temperatures as compared to gas, 1970°C versus 2,660°C.

  • Flames can be unpredictable. Hydrogen flames are unstable due to the high mobility of the fuel which can be harmful to the equipment and the refractory lining.

  • Corrosion. More heat will be generated in refractories, resulting in corrosion from the water vapour and steam.

  • Less refractory material. The switch to DRI+EAF will result in less refractory product per ton of steel because the materials will be of higher quality and have higher performance.

    Each of these factors will need to be taken into consideration from the start to ensure the right formulations and approaches.
  • The changes that need to happen
    One of the biggest changes needed in the switch to green hydrogen is in regard to the price point. Today, hydrogen is about €4/kilo. That price needs to drop to €1/kilo to be competitive and advantageous.

    Additionally, the entire process and technology need to be reshaped, everything from the facilities to the approach to the formulations. While that may slow some down, others are already making moves toward using green hydrogen.

    One example is ArcelorMittal; they are investing €1 billion in Spain to replace their old-fashioned blast furnace process (BOF) with a DRI+EAF steel plant that works with hydrogen as its primary fuel. When its production begins in 2025, ArcelorMittal will be one of the first full-scale steel plants to achieve zero carbon emissions worldwide.

    What we can expect next

    When anticipating what is to come with the energy crisis, each region has different approaches, priorities, and challenges that will impact its journey in energy reduction.
    APAC

    The Asia Pacific region accounts for 52 percent of the world’s emissions and largely relies on coal as its source of energy. When looking at China specifically, the region’s hub for manufacturing and industrial innovation, China accounts for more than 20 percent of the annual global emissions, with coal accounting for nearly 60 percent of the energy mix (down from 70 percent in 2010, but still double the global average.)

     

    But now, with drops in demand, rising energy costs, and a 2050 net zero promise from most Asia Pacific countries, the region is at a crossroads: switch to gas or switch to green hydrogen.

     

    Many feel that while the goals for net zero emissions in Asia are aggressive and will be quite costly (estimating upwards of 100 trillion), the benefits will be worth it.
    AMERICAS
    AMERICAS In the Americas’, the outlook is quite different. The U.S., for example, has domestic sources of gas and coal, relying minimally on Russia.

    Although, there are early signs that prices will rise even more due to drops and peaks in weather throughout the year. The U.S. refractories market is estimated at $1.6 billion, considerably smaller than China with a projected market size of $17.2 billion by 2026. Because of this, and the domestic energy resources, countries like the U.S. will not take as hard of a hit.

     

    But as with other parts of the world, the U.S. will still need to revise their energy plans to not become overly dependent on fossil-based energy and to meet its 2035 clean energy plan.
    EMEA
    With demand dropping, inflation rising, and the ongoing conflict with Russia, Europe will be hit hard on this topic; but it will not last forever. The European Commission’s Energy and Climate Framework will increase energy efficiency and renewable energy by 2030 and the Energy and Green Deal will make Europe the first climate-neutral continent by 2050.

    The key challenge now for the refractory industry is to stay alive during this time. Many plants are committing to 10-year contracts with higher energy prices, knowing that settling for a €70 to €120 MWh price increase (up from an average of €15-€30) is better than risking an even higher spike in costs. Already, prices are hitting €150-€300 per MWh.

    Even though the current environment is unclear, the future is bright. This should be an opportunity to develop high-performance materials with new processes.

    Expert Q&A

    Each region is moving at a different speed, with different priorities; some face larger hurdles than others. But despite these times of uncertainty, our experts remain optimistic. Read on to hear from IMCD Market Manager & Business Development Manager, Material Technologies, Adrian Alonso Garcia.
    The industry is being pushed now to move towards green energy by rising prices. Was this change anticipated?
    Yes, we have all been anticipating the switch to green energy, but everything has been accelerated in the last 2 years with the rising prices, and the Agenda 2030 goals getting closer and closer. More and more, I see companies prioritizing CO reduction and looking for new ways to make the switch to green energy sources. It feels like this energy crisis was the push the industry needed to make drastic changes, more immediately.
    What are the biggest challenges in making the switch to green energy?

    Three challenges come immediately to mind which are:

  • Replacing BOF and BF with DRI+EAF in steel manufacturing;
  • Switching to hydrogen from coal and gas; and
  • Controlling the global carbon footprint of a refractory product.

     

  • Adrian Garcia

    Market Manager, Business Development Manager
    Industrial Solutions
    Thinking bigger picture about this, the industry will also soon have to balance the cost with CO₂ footprint to decide which refractory product to buy. This would be an opportunity to source materials locally without price surges while maintaining product quality. We already see key players introducing CO₂ details on product technical data sheets.
    What is the biggest opportunity for the industry now?
    With new requirements from the steel industry and lower quantities of products needed, refractories need to design better products, that are durable, high-performance, and green. This is the time to focus on performance improvement. We need to leave behind the commodity role refractories have been playing for a long time and add more value to the end-users by offering energy savings and higher productivity.

    energy reduction success story

    Disruptive solution extends the life of refractories by 6 times