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Speaker 1: This is Dana Perkins and you're listening to Switched on

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Speaker 1: the BNEF podcast. On last week's episode, we discussed aluminum,

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Speaker 1: and this week we're looking at another important metal, steel.

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Speaker 1: The sectors with harder to abate emissions by twenty fifty

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Speaker 1: include things like cement, plastics, trucking, shipping, and aviation, and

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Speaker 1: of course, the subject of today's show. Steel. It's produced

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Speaker 1: with the world's most commonly mined metal ore iron and

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Speaker 1: has extensive uses, whether these be construction, automotive, household appliances,

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Speaker 1: or the renewable energy equipment that is essential for the

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Speaker 1: paths to net zero. For BNOF subscribers, relevant research on

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Speaker 1: the steel industry can be found on the Decarbonizing Industry

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Speaker 1: series page. This is on BNF dot com or NYFW go.

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Speaker 1: For those who have a terminal, hover over research and news,

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Speaker 1: then go to series and then find Decarbonizing Industry. We

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Speaker 1: drew upon a few specific research notes such as net

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Speaker 1: zero needs set to boost metals demand nearly fivefold and

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Speaker 1: Asian steel giants spread bets on hydrogen, along with the

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Speaker 1: number of company profiles, and on the show today, we're

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Speaker 1: going to talk about some of the major steel manufacturers

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Speaker 1: and how they're approaching decarbonization. I speak with BNF's head

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Speaker 1: of Sustainable Materials, doctor Julia Atwood, and our sustainable materials

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Speaker 1: analyst in Bloomberg's Beijing office, Yu Chen Teng. Together, we

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Speaker 1: go through the range of different production methods and innovations

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Speaker 1: that steel producers are using to reduce their missions, including recycling.

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Speaker 1: We also discuss the EU Carbon Border Adjustment Mechanism or

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Speaker 1: CBAM for short, and how it's impacting global manufacturers emissions targets.

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Speaker 1: And lastly, we get to whether or not nuclear power

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Speaker 1: could play a big role in the decarbonization of this sector.

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Speaker 1: As always, if you like this podcast, make sure to

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Speaker 1: subscribe to receive updates on future episodes, and give us

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Speaker 1: a review a rating on Apple Podcasts or Spotify to

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Speaker 1: increase our discoverability. Now let's jump into my conversation with

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Speaker 1: Julia and Yuchen about steel you ten, thank you for

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Speaker 1: joining us on the show today.

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Speaker 2: Thank you Dana for having me and Julia.

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Speaker 3: Welcome back, Thanks Dana, nice to be here.

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Speaker 1: So we're going to talk about steel decarbonization, which fits

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Speaker 1: into the hard to abate category, the things that are

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Speaker 1: really difficult to figure out how we're going to decarbonize.

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Speaker 1: And as we're getting started, let's give it a little

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Speaker 1: bit of context. How big are the emissions? What are

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Speaker 1: we talking about in terms of scope?

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Speaker 3: Well, Steele is about seven to eight percent of global emissions,

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Speaker 3: depending on how you count them. But the really interesting

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Speaker 3: thing is that in economies that are trying to decarbonize,

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Speaker 3: it's often a much bigger slice of that. So in

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Speaker 3: China and Japan and Korea it's actually in the teens.

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Speaker 3: So steel decarbonization is an outsized topic for those countries

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Speaker 3: because they know that in order to keep this critical material,

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Speaker 3: they're going to have to make it green.

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Speaker 1: Now you're saying they're going to have to make it green,

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Speaker 1: and then that leads me to the question why is

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Speaker 1: it hard to abate?

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Speaker 2: Yeah, steel is particularly hard to abate because it uses

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Speaker 2: coal intensively, and it's hard to get rid of those

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Speaker 2: cold because not only are they used as fuel, but

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Speaker 2: also they're used for their chemical properties. So in fact,

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Speaker 2: they're used in blasphernesss as reducing agent to bring the

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Speaker 2: iron ore to turn them into iron es centrally, So

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Speaker 2: there's really no good substitute for those coal and coke

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Speaker 2: used in blasphernesss and blaspherness using that process to make

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Speaker 2: iron actually accounts for about seventy percent of total steel

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Speaker 2: production in the world.

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Speaker 1: And you previously said that there were a few main

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Speaker 1: centers in the world where stale is produced and it's

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Speaker 1: a big part of their exported economy, and so I

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Speaker 1: guess my question is also why is it produced there

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Speaker 1: and why is this not something that is part of

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Speaker 1: this global deglobalization as we think about supply chains which

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Speaker 1: keeps propping up this year. Why is it in so

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Speaker 1: few centers.

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Speaker 2: So, actually around half of steel steel is actually made

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Speaker 2: in China, and most of the steel actually about ninety

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Speaker 2: five percent of steel made there in China is consumed domestically,

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Speaker 2: so it supports industries like the property industry, it supports

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Speaker 2: the infrastructure build in China. So, as you can see,

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Speaker 2: because we have such concentrated demand from China, that's why

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Speaker 2: we have a large chunk of steel produced there. So

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Speaker 2: following China, we have India, which is currently the second

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Speaker 2: largest steel producing country in the world, accounts for about

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Speaker 2: four percent of total steel production, and followed by South Korea,

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Speaker 2: US and Japan, which roughly produces around the same share

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Speaker 2: of steel. So I mean China is as Julian mentioned,

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Speaker 2: China is pretty outsized and it's steel production. But steel

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Speaker 2: as a material has been used extensively to help those

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Speaker 2: developed economies basically urbanized in the past, and now it's

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Speaker 2: really the emerging economies such as China and India driving

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Speaker 2: those steel demands. So we'll soon see those steel production

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Speaker 2: shifting increasingly to meet those demand from those emerging economies.

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Speaker 3: In particular, that was a really good summary. The way

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Speaker 3: to think about it is just that steel follows industrialization.

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Speaker 3: You have to have steel in order to build cars

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Speaker 3: and houses and roads and bridges, and we've typically only

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Speaker 3: had one enormous country industrializing at a time, so we

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Speaker 3: had China, and now it's moving into India and Southeast Asia.

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Speaker 3: So I think you will see some shifts in where

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Speaker 3: steel is produced in the pretty near future.

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Speaker 1: And we certainly spend a lot of time talking about mitigation,

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Speaker 1: but steel has an important role to play in adaptation

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Speaker 1: when people are thinking about making more resilient infrastructure. So

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Speaker 1: is the demand for steel and theory increasing, staying flat decreasing?

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Speaker 1: What's our forward looking view not just on decarbonizing steel,

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Speaker 1: which we will come to but whether or not it'll

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Speaker 1: remain the critical material that it is today.

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Speaker 2: Well, Julius, as your work done the new industry which

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Speaker 2: contains our demand outlook all that do take that question.

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Speaker 3: That is a masterful plug, Thank you, Jen. It depends

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Speaker 3: on the country so incredibly. We actually see steel production

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Speaker 3: going down in China, which would have been unthinkable ten

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Speaker 3: or twenty years ago. Overall, we think it will ramp up,

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Speaker 3: and that's because of a lot of growth in India,

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Speaker 3: a lot of growth in Southeast Asia. Everybody else kind

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Speaker 3: of stays the same because we really think of them

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Speaker 3: as being in replacement cycles. So you only need as

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Speaker 3: much steel as you need to replace anything that you're

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Speaker 3: tearing down because the building's too old. The point about

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Speaker 3: adaptation is really interesting. Obviously, for adaptation there's a lot

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Speaker 3: of reinforcing of existing infrastructure that you would want to do,

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Speaker 3: and construction is the biggest source of demand for both

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Speaker 3: steel and cement, and cement, which we're going to be

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Speaker 3: looking at soon, is a very similar portion of global emissions.

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Speaker 3: So we've talked internally about adaptation being difficult because your

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Speaker 3: problems just pile one on top of each other, and

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Speaker 3: so a lot of build out of adaptation infrastructure. It's

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Speaker 3: going to mean more cement, more steel, more emissions. So

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Speaker 3: that just makes it even more important that the steel

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Speaker 3: makers start to look at how they can get to

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Speaker 3: net zero.

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Speaker 1: Do they currently have the technologies that they need or

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Speaker 1: is this a conversation that still continues to kind of

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Speaker 1: let's say, lean on hydrogen.

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Speaker 2: Our team dived into the possible net zero technologies who

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Speaker 2: make steel, so hydrogen, as you mentioned, Dana is a

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Speaker 2: big one of them. So currently I think with the

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Speaker 2: technology readiness level where somewhere we're very close to commercializing

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Speaker 2: this technology. So we'll see the leading steel makers putting

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Speaker 2: out the first projects using green hydrogen around twenty twenty

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Speaker 2: five twenty twenty six. And obviously there's some other technology,

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Speaker 2: for instance retrofitting the emissions intensive blast furnaces with CCUS

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Speaker 2: and also substituting some of the coal potentially with biomass,

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Speaker 2: and they are emerging technologies such as electrolysis that can

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Speaker 2: also help us make green steel. However, those other technologies

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Speaker 2: are at a much less mature level compared to the hydrogen.

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Speaker 2: So in Europe in particular, hydrogen is the e goo

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Speaker 2: to option to help steal decarbonize.

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Speaker 1: What is the state of the race to net zero

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Speaker 1: by steel producers? And what I mean by that is,

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Speaker 1: you know, I look sometimes at industries and I see

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Speaker 1: net zero targets really come in waves. It's typically not

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Speaker 1: one or two companies, it's either most of them or

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Speaker 1: very few of them. Is this something that is a

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Speaker 1: big push in the steel industry and are they all

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Speaker 1: racing towards a net zero future? And perhaps what do

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Speaker 1: the targets look like.

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Speaker 2: Well, I wouldn't say they're as eager as racing, but

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Speaker 2: there are certainly some big players out there putting out

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Speaker 2: their net zero targets. So actually, very recently we've looked

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Speaker 2: into some of the largest integrated steel makers, so those

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Speaker 2: predominantly reliant on blaspherness production to make their steal right now.

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Speaker 2: So we look at where they are in terms of

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Speaker 2: net zero target setting, which actually converges mostly on twenty fifty,

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Speaker 2: so that's like the common goal that they set. We

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Speaker 2: also look at what are the technologies that they're planning

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Speaker 2: on adopting to achieve those targets, and what are some

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Speaker 2: of the projects that they put out there. So amongst

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Speaker 2: those top eight integrated steelmakers we look at. There's actually

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Speaker 2: one interesting outlier, which is SSAB. So it's the smallest

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Speaker 2: amongst the a's that we look at, but it has

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Speaker 2: the most ambitious target, planning to achieve net zero by

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Speaker 2: twenty thirty, which is really impressive or really unusual for

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Speaker 2: such an hartobate sector.

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Speaker 1: Now, legislation certainly has a motivating force for companies, and

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Speaker 1: I'm thinking about right now EU legislation. So the EU

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Speaker 1: Carbon Border Adjustment mechanism, how is this acting the steel industry?

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Speaker 3: Well, SEBAM really started the conversation for a lot of people.

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Speaker 3: It has an extremely long implementation time, so we don't

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Speaker 3: think we're really going to see the full effects of

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Speaker 3: the carbon price and this tariff until the twenty thirties.

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Speaker 3: We hope that everyone will have made a lot of

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Speaker 3: progress by then. So I would say what this is

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Speaker 3: doing is putting everyone on notice. Every other country that

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Speaker 3: imports to Europe now has to either find a way

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Speaker 3: to produce a green product to sell specifically into that market,

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Speaker 3: or needs to start figuring out another place to send

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Speaker 3: their steel. You tended you want to comment on the

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Speaker 3: China dynamics. We talk a lot about how Oh, China's

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Speaker 3: the biggest steel maker. This is going to be huge

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Speaker 3: for them. But actually you were the first person to

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Speaker 3: give a very different spin on it to me.

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Speaker 2: So, as Julia mentioned, CEBAM certainly has raised a lot

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Speaker 2: of tension outside of the U. So actually China is

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Speaker 2: not the biggest exporter of steel to Europe, but certainly

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Speaker 2: had the SEABAM caught a lot of retentionion in their people, well,

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Speaker 2: particularly the industry is very eager to understand how SEABAM works,

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Speaker 2: what are the methodologies, which we yet have very little

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Speaker 2: details on terms of how producers are going to have

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Speaker 2: to pay the carbon fees into the EU, but we

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Speaker 2: will be expecting more details coming through leading to twenty

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Speaker 2: twenty six. But this certainly is a great example of

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Speaker 2: how a piece of legislation in the EU could have

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Speaker 2: such large ripple effect to the rest of the world. So,

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Speaker 2: I mean China, like other countries, they're very concerned about

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Speaker 2: the impact of this piece of legislation.

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Speaker 3: I'm generally pretty down on policy when it comes to

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Speaker 3: industrial decarbonization. I think it hasn't really pulled its weight

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Speaker 3: so far. It's been giving industry a pass. But that said,

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Speaker 3: something interesting that could come out of SEABAM is a

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Speaker 3: framework for standards for green steel. So most of the

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Speaker 3: green steel that's bought, and so today it's B to

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Speaker 3: B and those businesses have to spend a lot of

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Speaker 3: time figuring out what do I think is green steel?

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Speaker 3: What are my emissions criteria? How far down the supply

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Speaker 3: chain am I going to go? If the EU sets

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Speaker 3: up a really nice framework for this is how you

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Speaker 3: report your emissions? These are what we think our standards are.

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Speaker 3: That's a great jumping off point for the people who

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Speaker 3: are trying to develop green standards that can be used

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Speaker 3: throughout the industry. And then that sort of starts to

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Speaker 3: lead you into thinking about this as a real product

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Speaker 3: rather than something that a producer is doing to make

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Speaker 3: their consumer happy, and speaking.

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Speaker 1: Of a space that some may think as a whole

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Speaker 1: pass and others may think is a tangible way to

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Speaker 1: working towards net zero emissions right now voluntary carbon? Are

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Speaker 1: the steel producers looking at voluntary carbon offsets? And are

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Speaker 1: they big buyers of them at this moment in time?

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Speaker 3: They're not big buyers of them. They're looking at everything,

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Speaker 3: so they are looking at voluntary carbon offsets. I occasionally

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Speaker 3: get questions about direct or capture, So is this something

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Speaker 3: that they should consider doing. Should they just run their

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Speaker 3: assets into the ground doe direct air capture as they

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Speaker 3: need to in order to make a green product, or

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Speaker 3: even just wait until it's hopefully less expensive in twenty fifty.

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Speaker 3: That's kind of a dangerous strategy because this is one

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Speaker 3: of those things where it's relatively straightforward to actually measure

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Speaker 3: the emissions because these are centralized plants. So I think

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Speaker 3: a product that is called green steel based on offsets

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Speaker 3: is not going to be able to command a premium

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Speaker 3: for very long.

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Speaker 2: And I just want to also provide some context to

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Speaker 2: how steel makers think about offsets. So currently, actually in

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Speaker 2: steel production, the carbon element is an intrinsic part to steal.

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Speaker 2: So actually steel is made up of about two percent

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Speaker 2: of carbon, so physically you actually need that carbon to

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Speaker 2: be added in the steel production process. So for instance,

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Speaker 2: even though you are using one hundred percent of hydrogens

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Speaker 2: grain hydrogen to make that stew, at some point you

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Speaker 2: will have to add in some carbon content, be it

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Speaker 2: biomass or say if you're add in some sort of

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Speaker 2: fossil fuel and then capture the emissions later. So the

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Speaker 2: point being there will be some carbon or carbon emissions left.

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Speaker 2: It's almost unavoidable in like how steel is made. So

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Speaker 2: that's why a lot of the steelmakers believe that at

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Speaker 2: some point they're going to have to rely on carbon

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Speaker 2: offsets or some sort of offsetting mechanism to help them

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Speaker 2: reduce or tackle that residual emissions, which is approximately five

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Speaker 2: to ten percent of their emissions. However, I feel like

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Speaker 2: the focus of the steelmakers now in terms of decarbonization

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Speaker 2: is that they want to look for technologies that will

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Speaker 2: enable them to take the largest chunk of the emissions.

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Speaker 2: So residual emission is important to get us to net zero. However,

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Speaker 2: it is the smaller parts of the pie that we're

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Speaker 2: looking at. So rather they're looking for really deep decarbonization

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Speaker 2: technology such as hydrogen and ccus, which allows you to

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Speaker 2: bate emissions to a large extent.

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Speaker 1: Now, Julia, you've spent a lot of time at BNF

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Speaker 1: thinking about circular economy solutions, and what I'm wondering is

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Speaker 1: how much is recycling of steel a part of the

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Speaker 1: solution for decarbonizing the overall output.

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Speaker 3: Oh, it's definitely a big part. Most of the green

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Speaker 3: steel that is sold today is recycled steel. It's going

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Speaker 3: to be really important in these developing economies that are

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Speaker 3: ramping up their steel production because they will also start

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Speaker 3: to see the first cars, the first consumer goods, the

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Speaker 3: first buildings that they built fifty years ago coming out

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Speaker 3: of commission. So that's going to generate some scrap that

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Speaker 3: they can then recycle into steel. The issue is there

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Speaker 3: isn't a huge amount of upside here. When you look

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Speaker 3: at something like plastics that's very badly recycled today, there's

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Speaker 3: a huge amount of benefit that you can get from

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Speaker 3: recycling them, both on the waste and the emission side,

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Speaker 3: if you do it mechanically. For steel, the developed world

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Speaker 3: recycles steel very well, and so there's not a huge

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Speaker 3: amount of benefit that they're going to get emissions wise

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Speaker 3: for that. But Eachen, I mean, you can tell us

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Speaker 3: a little bit about the plans that steelmakers have for recycling.

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Speaker 2: Thanks Julia and Dana. You raised the really important point

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Speaker 2: that recycling is going to play a big role in

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Speaker 2: terms of reducing immediate or short to medium term. It

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Speaker 2: is almost the most important solution because it is the

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Speaker 2: only mature, commercially available technologies that we have to make

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Speaker 2: green steel So how the method works is essentially you

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Speaker 2: scrap as feedstocks, you put it in the electric arc

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Speaker 2: furnace also known as EF, and then you're plug in

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Speaker 2: essentially low carbon renewables or some form of low carbon

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Speaker 2: electricity into it and then magically you get your green steel.

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Speaker 2: So one way or another, those eight steelmakers that we've

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Speaker 2: studied plan to install such recycling capacity to help them

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Speaker 2: to enable them to make green stew in the medium

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Speaker 2: to short term leading to twenty thirty. So it's important

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Speaker 2: part to help them achieve their interim targets. However, as

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Speaker 2: Julian mentioned, yeah, it's not every solution. We need also

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Speaker 2: other technologies to really help us get to net zero.

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Speaker 1: Staying on the topic of technologies, you know, we talked

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Speaker 1: about some of the things that we're currently being looked at.

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Speaker 1: So you talked about hydrogen and carbon capture. What are

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Speaker 1: some of the more experimental things that are being looked

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Speaker 1: at at the moment from a technology standpoint, and is there,

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Speaker 1: you know, a bleeding edge when it comes to innovation

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Speaker 1: in the steel space.

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Speaker 2: Yeah, so I want to maybe discuss too interesting technologies.

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Speaker 2: One is actually one category of technologies that allows the

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Speaker 2: existing integrated still making process to partially reduce emissions, and

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Speaker 2: these category technologies we call them blasphemess based technologies, so

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Speaker 2: they could be top gas recycling coupled with CCUS or

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Speaker 2: carbon capture, So that essentially means that you're recycling the

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Speaker 2: off gas from the emissions intensive furnaces such as blast

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Speaker 2: furnace or basic oxygen furnace where you make steels, So

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Speaker 2: you recycle those off gases that contains carbon and then

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Speaker 2: you feed them back into the furnace so that you

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Speaker 2: require less carbon to be fed into the blast furnace

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Speaker 2: in the first place to serve as reducing agent, and

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Speaker 2: that can partially help you lower the emissions. Now why

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Speaker 2: this is important is because it's one important category that

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Speaker 2: a lot of the Asian steelmakers are focusing on. So

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Speaker 2: let's break the Asian steelmakers into a few categories. There's

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Speaker 2: the Japanese steelmakers, so they are really the ones leading

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Speaker 2: the steel making technologies currently in the world. So they

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Speaker 2: are super fascinated with their blast furnaces and they're looking

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Speaker 2: to preserve that edge in the industry. So certainly they

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Speaker 2: don't want the blast furnaces to go away, so they

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Speaker 2: would try to find technologies that could help blast furnaces

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Speaker 2: to reduce emissions, so the top gas recycling and carbon

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Speaker 2: captures one way. Another way is to inject hydrogen into

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Speaker 2: the blast furnace. That will also allow you to reduce

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Speaker 2: emissions by around twenty percent. And then there's also another

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Speaker 2: category of the steelmaker or Asian steel makers is the

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Speaker 2: Chinese ones. They are certainly also looking at blast furnace

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Speaker 2: based technologies because their blast furnaces were very much built

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Speaker 2: in the past ten years twenty years, so the acid

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Speaker 2: live for these assets are very young, so these steel

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Speaker 2: producers are still hoping to use them for a long time,

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Speaker 2: so it doesn't really make sense to knock down those

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Speaker 2: furnaces that are still quite young, still quite good, and

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Speaker 2: to build new furnaces running a hydrogen so it makes

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Speaker 2: more economic sense for them to preserve that and hence

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Speaker 2: inherent they have the motivation to also figure out a

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Speaker 2: way to reduce plastphorness emissions.

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Speaker 3: It all comes back to hydrogen and ccs in the end.

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Speaker 1: Though, one of the strategies you end up seeing from

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Speaker 1: some really large companies is to wait for smaller companies

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Speaker 1: slightly more in innovative, maybe nimble startups to really come

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Speaker 1: up with the technology and then buy it. Then, is

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Speaker 1: there a vibrant space of companies that are looking at

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Speaker 1: innovating that aren't a part of these very large steel

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Speaker 1: producers in these centers around the world.

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Speaker 3: There is, but they have a very particular niche. They

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Speaker 3: all want to try and make steel directly with electricity,

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Speaker 3: So using hydrogen is basically just a convenient storage tool

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Speaker 3: and transport unit for electricity that U ten has looked

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Speaker 3: into this a lot more detail.

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Speaker 2: So we've certainly noticed a few startups in this space

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Speaker 2: that are claiming that they have this innovative technologies that

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Speaker 2: doesn't really on either hydrogen or ccus, but allows you

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Speaker 2: to make green iron or green steel. One example being

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Speaker 2: Boston Metals. So they have their proprietary process which is

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Speaker 2: known as molten oxide electrolysis or MOE, which is a

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Speaker 2: high temperature process. You essentially pass a current into a

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Speaker 2: chunk of molten iron ore and by the electricity will

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Speaker 2: reduce those iron iron and bring them and turn them

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Speaker 2: into molten iron. So another startup in this space, a

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Speaker 2: few others. Actually, there's another startup called Electra so they're

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Speaker 2: also developing an electrolysis based process. However, it's a low

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Speaker 2: temperature electrolysis process, and interestingly, contrary to theme process from

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Speaker 2: Boston Metals, it allows you to use intermittent renewables. So

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Speaker 2: MOE relies on twenty four seven clean power. That means

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Speaker 2: you're going to have to find in some kind of

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Speaker 2: storage or like really nice renewable to allow you to

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Speaker 2: produce green iron continuously. However, for electros process, you actually

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Speaker 2: can ramp up and down your production very flexibly. So

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Speaker 2: in some way, or according to the company, actually they

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Speaker 2: claim that their production side could also potentially serve as

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Speaker 2: a grid balancing facility for the local grid.

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Speaker 1: Could it in theory? I mean you mentioned grid balancing,

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Speaker 1: so I guess this is the other side of the

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Speaker 1: same coin. But it could be quite then responsive to

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Speaker 1: the intermittency issues that we talk about when we think

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Speaker 1: about wind and solar.

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Speaker 2: Potentially it could be. However, I must mention that their

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Speaker 2: technology is still at a very early stage. So they've

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Speaker 2: filed a patent a few years ago and now they're

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Speaker 2: currently looking to build a pilot scale production plan by

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Speaker 2: end of this year. However, I guess one challenge that

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Speaker 2: this electrolysis based technology is facing is scale, so it

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Speaker 2: can allow you to produce almost as much as say, currently,

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Speaker 2: the scale that they're looking at is they produce these

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Speaker 2: iron plates that are one meter squared, and that is

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Speaker 2: actually very very tiny compared to what a blasphemis could do,

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Speaker 2: and that's at a million tons of scale, so it's

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Speaker 2: an order of magnitude of difference. However, it does shine

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Speaker 2: light on, as you mentioned, Dana, the problem of could

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Speaker 2: it potentially help address this renewable intermedtency issue. That's one potential. However,

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Speaker 2: the scale at which they produce right now is still

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Speaker 2: quite small. I have to say, even though they have

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Speaker 2: this potential, maybe we'll have to wait and see how

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Speaker 2: it could actually tap the problem. But I want to

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Speaker 2: mention another thing that this technology helps address is that,

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Speaker 2: in fact, one common pushback that the hydrogen based still

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Speaker 2: making technology is getting is that it requires a higher quality,

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Speaker 2: higher grade ion ore, which isn't commonly used in today's production,

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Speaker 2: and those higher quality are also more expensive and they're

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Speaker 2: in lower supply. However, electros process, amongst some of the

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Speaker 2: other electual space technologies, will allow you to use lower

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Speaker 2: quality grade of io, so we can continue to use

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Speaker 2: the iore that we use today instead of having to

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Speaker 2: worry about searching for higher quality reserves that could be

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Speaker 2: in potential supply shortage.

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Speaker 1: A technology which has been around for a while but

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Speaker 1: is certainly under discussion more than I have seen since

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Speaker 1: I've been in this industry, is nuclear. Whether or not

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Speaker 1: we put it in the clean category, we will leave

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Speaker 1: for a debate in another day. Has there been much

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Speaker 1: conversation by steel producers to look to what is a

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Speaker 1: really substantial source of baseload power? Is nuclear something that

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Speaker 1: they are looking at more intensively right now?

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Speaker 2: Yes, definitely, there are a lot of interest from the

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Speaker 2: industries that we're beginning to observe. So, for instance, in

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Speaker 2: North America, the largest steelmaker Nuker, which funny enough, its

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Speaker 2: name actually suggests that it used to be a nuclear company,

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Speaker 2: newcre It recently just invested in a nuclear power company

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Speaker 2: called New Scale. So these North American steelmakers, which largely

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Speaker 2: rely on efs and hence would be looking to source

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Speaker 2: a lot of low carbon power, they're certainly interested in

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Speaker 2: the potential of nuclear. We have seen similar interest arising

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Speaker 2: from the Scandinavian regions. So I think Fortum which is

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Speaker 2: a finish energy supplier, and they have some nuclear power.

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Speaker 2: They have signed some power supply agreement to supply nuclear

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Speaker 2: power to also interestingly, a startup in the region called

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Speaker 2: H two Green Steel. And the interest in nuclear is

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Speaker 2: also very present in China, which might be not so

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Speaker 2: well known outside of the country. So the largest steelmaker

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Speaker 2: in China and then the world, BOO, is actually looking

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Speaker 2: at nuclear's potential to make low carbon hydrogen as well

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Speaker 2: as providing low carbon power where it's hydrogen based steelmaking

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Speaker 2: pilot projects in the province of Grandon in southern China.

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Speaker 1: So there certainly is innovation, and there are as you

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Speaker 1: stated and that zero targets in the steel industry. But

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Speaker 1: it really brings to heart that meaning of transition, that

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Speaker 1: this is a long term transition with targets quite far

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Speaker 1: out and into the future. For good reason, while we

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Speaker 1: are looking to very quickly decarbonize and really are aware

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Speaker 1: of the fact that the actions that we have right

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Speaker 1: now are so impactful in terms of overall net emissions

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Speaker 1: and how one might actually achieve net zero, much less

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Speaker 1: at one point five degree scenario. What other alternatives to

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Speaker 1: steal what's their competitor out there? That might reduce demand.

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Speaker 3: Well, steel and aluminum have always has been rivals in

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Speaker 3: terms of where you're going to use them and the

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Speaker 3: benefits of each. Now, aluminum, depending on where you make it,

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Speaker 3: can have a massive carbon footprint, much higher even than

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Speaker 3: fossil produced steel, so you have to be careful with

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Speaker 3: your aluminum. We've also seen a real resurgence in interest

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Speaker 3: in wood as a building material because that construction industry

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Speaker 3: is such a huge portion of demand for steel. So

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Speaker 3: people are experimenting with how tall can I make a

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Speaker 3: wood building? How do I have to set up the

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Speaker 3: building codes for that? How would I have to change

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Speaker 3: my design? Would it have to be like squattier? Can

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Speaker 3: we not have huge skyscrapers anymore? That's a little tough

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Speaker 3: because nobody wants to use their building as a pilot project.

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Speaker 3: So I think it will proceed quite slowly. I don't

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Speaker 3: think steel demand overall is going to go anywhere. I

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Speaker 3: think it can be replaced on the edges, but I

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Speaker 3: think it's here to stay.

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Speaker 1: I'm glad you brought up aluminum because we actually also

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Speaker 1: recorded a show on decarbonizing aluminum, as that is also

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Speaker 1: hard to debate. So as we go from one hard

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Speaker 1: to abate sector to the next. Thank you very much

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Speaker 1: for joining today, Julia Nutchen, Thanks Janny. Bloomberg n EF

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