Swiss Steel Group will procure hydropower from renewable energy producer Axpo Holding AG to power a special steel plant in central Switzerland exclusively with green electricity.
The power will be supplied to the Steeltec plant in the village of Emmenbruecke, in the canton of Lucerne, under a power purchase agreement (PPA) that runs until 2024, the two companies said on Tuesday.
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The electricity will come from Swiss hydropower plants in Axpo's portfolio.
The switch exclusively to hydropower will further reduce the carbon footprint of the steel mill which emits 63 kg of carbon dioxide to produce one tonne of crude steel compared with an industry average of 1,890 kg of the greenhouse gas emissions.
In addition to supporting its sustainability efforts, the agreement with Axpo will give Swiss Steel Group security for long-term planning regarding electricity costs.
“We’re seeing a strong demand for electricity from hydropower and other renewable energies in Switzerland and throughout Europe. Indeed, awareness is growing across many industries of production processes that result in lower CO2 emissions," said Axpo Head of Origination Switzerland Laurent Nanzer.
The Lucerne-based steel maker noted that its steel mill in Canada and bright steel production in Dusseldorf, Germany, rely entirely on green power to produce steel.