Introducing carbon constraint in the steel sector: ULCOSscenarios and economic modeling

Abstract

Modeling activities and scenario building are at the heartof the economic analysis delivered by the ULCOS program.Two main objectives were followed in the framework of SP9.First the modeling team had to provide a set of coherentenergy economic scenarios using POLES model. Second,the economic conditions for the emergence of the ULCOStechnologies were analyzed. ULCOS contributes to theelaboration of contrasted scenarios that the steel industrycould face in the long term. To aim at these objectivesspecific tools have been used: POLES model for the globalenergy system modeling and ISIM model for the steel sectorbased prospective (Hidalgo, 2003). The most promising steelproduction technologies identified in ULCOS Phase 1 havebeen introduced into ISIM as generic technologies. ISIM wasthen integrated as a module into POLES modeling system.The main model outputs are the energy prices and mixes andthe steel sector balances with a focus on the technology mix.Actually the climate policy scenarios developed in projectallow making recommendations to the steel industry in termsof sustainable development but also in terms of businessstrategy.