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Workers at the Oryx plant

Steel circular economy ‘cuts climate change risk in Thailand’

BANGKOK, March 27, 2024

Increased recycling of stainless steel can make a noticeable contribution to mitigate climate change in Thailand and globally. 
 
This is the result of a recent joint study by a number of prestigious Thai and German scientists, on behalf of Oryx Stainless (Thailand) Co, Ltd, which looked at the social welfare benefits of recycling stainless steel in Thailand. 
 
The Fraunhofer Centre for International Management and Knowledge Economy IMW from Leipzig, Germany, planned and coordinated the study with the support of the German Embassy. 
 
Recycled stainless steel
For every tonne of stainless steel scrap used to produce new stainless steel, 6.71 tonnes of CO2 are saved compared to the use of primary raw materials. This was the result of the scientific analysis conducted by Fraunhofer UMSICHT using the example of the recycling processes at Oryx Stainless in Thailand. Oryx Stainless is one of the world's leading suppliers of recycled stainless steel with five sites in Asia and Europe. 
 
Based on the stainless steel scrap handled by Oryx Stainless in Thailand in the reference year of the study (2021), the scientists calculate CO2 savings of 556,000 tonnes. This approximately corresponds to the annual CO2 footprint of the inhabitants of the Muang Chachoengsao district which is close to the Thai location of Oryx Stainless or 1.45% of the total greenhouse gas emissions from all industrial processes in the country. 
 
The potential for Thailand and the climate becomes clear when one sees that almost 3.6 million tonnes of CO2 were saved within the entire Oryx Stainless Group in the reference year.
 
Climate effects on Thailand
The fight against climate change is of particular importance for Thailand, as the country is already suffering greatly from the effects of global warming. Thailand ranks 9th in the global long-term climate change risk index, which covers the years 2000 to 2019. Thailand is highly exposed to natural hazards such as heat waves, droughts, floods, cyclones and storm surges. Floods pose the greatest threat to Thailand in terms of frequency and damage. The country is already one of the ten most flood-affected countries in the world.
 
In terms of the economic costs caused by climate change, the volume of stainless steel scrap that Oryx Stainless Thailand Co., Ltd. put back into the production cycle saved around 1.9 billion Thai baht equivalating more than $50 million, according to calculations by Thai and German scientists. This corresponds to the combined national average annual income of around 7,000 Thais.
 
The calculation is based on the "Scrap Bonus" indicator developed by the Fraunhofer Center for International Management and Knowledge Economy IMW, which was individually adapted to Thai conditions by the international research team for the study. The indicator is calculated in two steps. In the first step, the environmental impact avoided by using one ton of stainless steel scrap in steel production is quantified. In the second step, various economic estimates and price references from emissions trading systems are used to convert the avoided environmental impact into Thai baht. In other words, a price is assigned to the (avoided) pollution.
 
"This study shows that the smart use of recycling raw materials such as stainless steel scrap and their use in the production of new products can make a tangible contribution to the fight against climate change. Stainless steel scrap is a particularly valuable secondary raw material due to its very high recyclability. Stainless steel can be recycled without any loss of quality. Worldwide, 95% of stainless steel is recycled at the end of its lifespan. 70% is recycled as stainless steel. 
 
Scrap currently accounts for around 48% of raw materials for stainless steel production worldwide. In Europe, leading stainless steel producers go to the limits of what is technically feasible and use up to 95% secondary raw material blends for the production of new stainless steel," says Sirichai Tempoomsuk/CFO, Oryx Stainless (Thailand), Co, Ltd.
 
Stainless steel producer Southeast Asia: growth market
With a stainless steel production of 7.79 million tonnes in 2023, Asia (excluding China and South Korea) is already a major player. The Southeast Asian steel industry, including the stainless steel sector, is expected to increase its production capacities significantly in the coming years, with countries such as Malaysia and Indonesia building up millions of tonnes of new capacity. 
 
Thailand produced around 366,000 tonnes of stainless steel in 2022 and is, simultaneously, the second largest consumer of stainless steel in Southeast Asia.
 
Creating good framework conditions
"The growth perspective in Southeast Asia and thus in Thailand underlines the need for the smart use of our resources in view of the ongoing climate change caused by the emission of greenhouse gases. This is where politics is needed, also in Thailand. Smart recycling creates both economic and environmental benefits for Thai society. To take full advantage of these benefits, policy makers should ensure a level playing field for raw materials and provide favorable operating conditions for the recycling industry," comments Christian Klöppelt, Research Fellow, Fraunhofer IMW as spokesperson for the research consortium.
 
Concretely, the international researchers propose considering the pricing of CO2 emissions in Thailand. Additionally, there's a suggestion to expand the Thai Bio-Circular-Green (BCG) Economy Model to include metal scrap. Moreover, creating conducive operating conditions for the recycling industry is recommended.--TradeArabia News Service
 



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