The magazine of Friedhelm Loh Group

The magazine of Friedhelm Loh Group

Stahlo SteelGate
Innovation

Carbon tracking for green steel

Fossil-free steel is set to transform the markets. Initial quantities have already been announced and will be available in practice in two or three years’ time. The market lacks transparency, though, and there are currently still no uniform standards defining what constitutes green steel. With a blockchain application called “SteelGate”, Stahlo is now offering a way of boosting confidence in the new ecosystem of “green” supply chains.

Text Markus Huneke ––– Photography

There is a great deal of interest in green steel. Car manufacturers and their suppliers – both customers of Stahlo – will be using it in the future, as part of the EU’s zero emissions strategy. Even before the recent announcements by steel producers about making a start on fossil-free production, Stahlo was aware of a growing interest in green steel amongst its customers.

This interest is also a sign of great uncertainty due to a lack of reliable information. After all, there is still no solution in sight that will enable steel processors such as the automotive industry and its suppliers to carry out a valid evaluation of a steel product’s carbon footprint and pass on this information securely in their supply chains. “It’s a big shakeup for supply chains, because the market for fossil- free steel is still in its infancy. Reliable information is vital to the smooth operation of this new steel ecosystem,” emphasises Oliver Sonst, Managing Director of Stahlo.

An increasing amount is now known about the various ways of creating carbon profiles for steel products – based on the different manufacturing routes, for instance. Stahlo is one of the first companies to compile this knowledge in a dedicated database and make it available to customers in the form of a classification label. As the market for green steel grows, though, so do the calls from customers for additional detailed information about the specific steel products they purchase. What’s more, the most important thing of all is for these details to be reliable.

PROTECTION AGAINST TAMPERING THROUGHOUT THE SUPPLY CHAIN

Stahlo showcased one possible solution to this “problem of trust” at Euroblech 2022. The example application called “SteelGate” illustrates how carbon tracking can be implemented digitally, transparently and, above all, reliably – throughout the entire steel supply chain. This solution makes use of blockchain technology. The basic idea is simple. A specific data set is assigned to each steel product. Information about the respective emissions generated is added at each stage of production and passed on along with the product.

This provides users at the end of the supply chain with full details regarding the product carbon footprint of the exact steel they have ordered. Although chains of information are nothing out of the ordinary these days, they have mostly been in analogue format to date. Moreover, the production and quality data does not include details of the emissions generated, and the information is also susceptible to possible tampering.

  • What is a blockchain?

    The basic idea behind a blockchain is simple. Essentially, it consists of interlinked data sets. Take the following example: The information about steel products that a steel manufacturer gives its customer could be saved in a blockchain data set and included in the scope of supply. The buyer would then add details about its own machining processes to the data set, and pass this on to its own customers. Nothing out of the ordinary there.

    The special feature of a blockchain – and indeed any technology of this kind – is the highly secure linking of the data blocks thanks to cryptographic processes that make subsequent changes to the data impossible. Station B can’t modify the data from Station A by deleting it altogether or removing/adding content. As a result, Station C can be sure the information chain is correct.

    Furthermore, in contrast to conventional data management, the data is stored on a decentralised basis. There are no centralised entities. The data sets take the form of parallel, permanently linked copies held by all members of a network such as a supply chain. If one entity adds new information to a data set, all the other data sets of all other entities involved change accordingly. The key feature of this application is its security, which forms the technological basis for trust. Bypassing the cryptographic linking of the data blocks or modifying them without this being noticed is regarded as being all but impossible.

     

The idea behind carbon tracking: A specific data set is assigned to each steel product. Information about the respective emissions generated is added at each stage of production and passed on along with the product.

TRULY GREEN STEEL

Blockchain technology is a promising potential solution when it comes to building trust in the steel supply chain. It uses highly secure cryptographic processes to protect the chains of information against unauthorised access and tampering. Due to the cryptographic linking, any change made to a particular entity’s data set without permission – reducing the emissions generated to date, for example – would automatically be registered by all the other distributed data sets.

The cryptotechnology being used isn’t the vital factor, though. “It’s not the data technology that is decisive, but rather transparency and trust in the supply chain to have reliable information about specific green steel products,” explains Sonst. “Being an independent steel service centre puts us in an ideal position to satisfy this need for reliable information,” he emphasises.

With SteelGate, Stahlo is demonstrating how all data entered is traceable, all the way back to its original source. The name of the author, the details of the data and the time it was entered are always transparent. As a result, green steel can be identified as truly green – i.e. from fossil-free production – throughout all processing steps.

back Part 2: Interview with Oliver Sonst  

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