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The European Commission’s Research Fund for Coal and Steel (RFCS) was formed by investing money left over when the European Coal and Steel Community (ECSC) was dissolved in 2002.
The steel-specific component of the RFCS supports research into iron ore, blast furnaces, casting, rolling, steel utilisation and emissions reductions and more.
“We are directly improving competitiveness through the knowledge we generate,” Alan Haigh, head of the RFCS said.
“[Some] €55 million a year in interest is generated on the remains of this fund,” said Haigh, “[and] €42 million goes to steel and €14 million to coal.”
The fund supported 198 research projects between 2003 and 2010 and the latest project to be granted funding will be announced in February 2014.
In September 2013, the fund looked back at the 198 projects to see how the grants had benefited European steel.
There were 23 projects identified that provided non-ambiguous direct financial benefits in terms of increased productivity, new or improved market share and cost reductions.
For every €1 ($1.4) invested in these projects, a benefit of €3.3 ($4.5) a year was obtained, giving an accumulated benefit over time of €400 million ($551 million) for the funding given out so far, Haigh said.
“I am prepared to say that this is quite a pessimistic figure,” said Haigh. “If you looked further you could have found further benefits and payback.”
The report also concludes that an RFCS investment of €55 million a year in co-funding has the potential to generate benefits of €684 million a year across Europe’s coal and steel sectors.
“There are not many research programmes that can quantify the benefits they produce, but the steel industry is not really like that,” Haigh said. “You can go to the rolling mill and see improved efficiency and the number of extra tonnes generated and then come up with a figure.”
“A direct commercial benefit would be research into how blast furnace walls get eaten away. When you inject in a way that moves the heat spot, you reduce wear [and thereby] increase the lifetime of a furnace,” Haigh said.
A typical RFCS co-funded project would get €1-2 million over four years that would be matched with another €1 million from a consortium of four or five companies and universities, Haigh said.
“When it gets very competitive, such as how to make a new car door, the big companies would not work together,” he said. "But, on how to make a component 30% lighter or reduce carbon dioxide, all market players want to know the answer.”
Bigger projects, such as the €75 million ($103 million) ultra-low carbon dioxide steelmaking (Ulcos) project to find an alternative to the blast furnace, source some funding from RFCS in addition to commercial, national and EU bodies.
The EC does not own the intellectual property that results from the research.
“The purpose is for the consortium to gain knowledge so it can go off and compete,” Haigh said.
The consortium works out its own intellectual property agreements, but must publish a final report to disseminate the knowledge to others.
The EU's steel action plan, which stresses the need to stimulate researchand innovation in environmentally friendly technologies, states that, between 2014 and 2020, €280 million ($385 million) will be given out by the RFCS.
The fund aims to be a bottom-up project led by industry needs.
Wind turbines have been a popular topic in recent years as Europe’s wind industry has expanded.
The Histwin project (high-strength steel towers for wind projects) looked to make more cost-effective and stronger wind turbines to compete in a market where turbine size is increasing.
"We have been able to create a new way to join the sections of a wind turbine tower together that is not only much stronger, but also much cheaper," a project spokesman said.
The new method means that worn-out bolts do not have to be regularly replaced, which can be tricky and costly in an offshore setting, and the new towers are up to 10% cheaper to build, the spokesman said.
If all European tower makers use the method, it could lead to annual savings of €240 million, he added.
Like the wind turbines, the European steel industry has taken a battering in recent years, but through investment in cutting-edge research, the RFCS believes that Europe can lead the way in globally competitive high-tech solutions.
With high energy costs, emissions reduction targets and low demand all piling on the pressure, research and development into steel applications is critical to keeping the European steel industry fighting fit.