Europlasma sees a long-term market in applying plasma-based clean-up know-how to steel furnaces. Revenue prospects and timetable are not available.

Europlasma has announced a technical breakthrough. It plans to deploy its plasma-based gas-cleaning technologies in steel furnaces.

Arcelor Mittal is a partner at a pre-industrial stage with the ambition to deploy the technology, thus to lead the efforts of the steel-making industry in reducing its massive CO2 footprint.

Funding of the pre-industrial stage is backed by SGPI, a French government effort to deploy €57bn in structuring projects including those helping to reduce carbon emissions.

This pioneering solution is at a very early stage.

The principle is to convert carbon-rich exhaust gases into syngas (using plasma- cleaning capabilities) for reinjection into the furnace as an alternative to a mix of fossil energy and air (and sometimes added oxygen) for the steel-making process.

As the process cuts both the CO2 emissions and the fossil energy input, its potential value for the worldwide steel industry is presumably enormous.

It is good that Europlasma has been working with ArcelorMittal, the biggest steel player in what remains a very fragmented industry, to bring such a technology to a pre-industrial stage.

The urgency of the CO2 emission dilemma has recently been made clear in China with the forced closure of inefficient steel capacity in winter when the pollution is made worse by cold temperatures and the lack of wind.

We understand that the Europlasma technology is complementary to the use of oxygen in steel manufacturing.

Oxygen improves the combustion, i.e. reduces the production of unwanted gases. Europlasma makes good use of exhaust CO2 and methane gases to turn them into a useful syngas.

Europlasma’s management is prudent about breaching confidentiality commitments with Arcelor Mittal, and in particular about putting any figure on the project, the initial phase of which has been about two years in the making.

Pre-industrial tests, presumably in France, may well take another year so that any implementation in scale is a long-term perspective.

In an ideal world, that would mean Europlasma delivering ad hoc plasma reactors in big numbers and relevant engineering services. Putting any figure on such an opportunity is currently a stretch as it also depends on the cost of CO2.

While Europlasma is well on its way to becoming a green energy group as its waste to power proposition is now up and running, it is continuing to add credentials to its Industrial Solutions business, in France and abroad.

Currently, the provision of plasma torches in our forecasts is limited to those deployed in its CHO Power (green power) projects. No impact on earnings nor valuation beyond a positive sentiment.