Rising demand for green certificates and carbon data in ferro-silicon sourcing

Ferro-silicon buyers in Europe have been increasingly asking for green certificates and carbon emissions data when sourcing material over the past few weeks, several sources told Fastmarkets.The trend has accelerated since November 2024 after starting earlier that year and is expected to ramp up into 2025, sources said.

“There has been more interest [on] this kind of information and it’s very recent,” a trader told Fastmarkets.

Steel mills take action on carbon monitoring

In this new context, steel mills have been allocating resources to monitoring the emissions of raw materials, including staff dedicated to researching carbon emissions in ferro-alloys production, sources said.

“It is so nice when customers ask for carbon emissions on material and to confirm origins when they ask for offers. I wish more were doing it,” a ferro-silicon supplier said.

Challenges in securing premiums for low-carbon products

It has been difficult for ferro-silicon producers to secure premiums, however, even when they can provide documentary proof of low emissions, Fastmarkets heard.

“I am seeing this in ferro-silicon and silicon metal [markets]. This morning, I was quoting, and the customer was asking for emissions data because they’re selling to the automotive industry. But my customers, aluminium producers, are not getting a premium for green aluminium,” the trader told Fastmarkets.

“They want a certificate and will consider the emissions, but they won’t pay extra. I am also receiving requests for ferro-silicon certificates, but they’re not paying a premium,” the trader added.

A small number of producers from the ferro-alloys industry said they have been able to secure premiums for greener material, but noted that this was not consistent across customers or contracts.

Fastmarkets reported that there is a very wide range of carbon emissions across the ferro-alloys industry, including ferro-silicon. This means that even some of the greenest producers can end up with the lowest chance of securing a premium if they attempt to sell in a region where buyers are not ready to pay more.

Providing carbon emissions information is often not enough to secure a sale, let alone a premium, market participants have told Fastmarkets.

“We haven’t heard anything like that [requests for green certificates or carbon thresholds]. There was something in summer this year, but normally they ask once and then they get all the information and never come back at all,” a second supplier said.

Global variation in green material adoption

Fastmarkets launched four green ferro-alloys prices in October 2023, reflecting domestic prices for ferro-chrome and ferro-manganese in China, where at least ten ferro-alloys smelters are producing green products certified by the China Metallurgical Industry Planning and Research Institute.

“It’s a transition time now. I expect in one to two years everyone will accept the higher price for ferro-alloys,” a second trader told Fastmarkets.

Fastmarkets’ green ferro-alloys prices are part of its package of green prices for the steel supply chain, including green steel prices in Europe, Asia and the US, and the most recent launch of green long steel prices in Southeast Asia.

The post Rising demand for green certificates and carbon data in ferro-silicon sourcing appeared first on Fastmarkets.