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A Pricing Model for Steel Mill Gas
To combat global warming, the chemical industry needs to find ways to reduce its carbon footprint. One way this can be done is by industrial symbiosis (usage of the waste of one industry for the feedstock of another). A prime example feedstock for the chemical industry is steel mill gas, due to its relatively high CO and CO2 content, allowing production of carbon based chemicals such as methanol or polymers. The steel industry alone is responsible for roughly 6.2% of total global CO2 emissions and in Europe there are many steel producers in close proximity to chemical producers. If a chemical producer is to use steel mill gas as a feedstock, he will need to purchase it from the steel producer. Therefore, knowledge of the economic value of these gases is particularly important information regarding the viability of such a novel chemical process. A method is presented for the estimation of the value of steel mill gases on a temporal basis, depending on the amount of steel mill gas being utilized by the steel production plant for different purposes. Data was obtained from several steel plants in Europe and a model data set developed representing the steel mill gas from an average European steel plant. This data describes the three outflows of the steel mill gas, which are to a heating unit, to a power plant for electricity generation, or to the flare stack. The value of the steel mill gas was determined by evaluating the cost to replace the gas through other means and is dependent on how much gas is used for each of these three purposes at a specific time. Furthermore, storage solutions for steel mill gas are also investigated, in order to save steel mill gas on site that would otherwise be flared, potentially lowering its cost for the chemical producer. A sensitivity analysis on cost variation for different sizes of storage based on temporal flaring data is presented. The effective economic value of steel mill gases and other industrial waste gases is extremely useful information. As the gases often contain high CO/CO2 content, they can be utilized as feedstocks for a wide range of processes requiring carbon. Production of such valuable chemicals from CO and CO2 is much more likely to be adopted by industry if it is economically viable and cheaper than current, fossil fuel based solutions. The method used by this model could also easily be extended to determine the value of flue gases from other industrial plants.