Alban Hohmann Schauly, Vice President for the Energy Sector at Alfa Laval "Arab Steel":
The battle to reduce steel production costs starts with wasted heat and water
Water and energy are becoming a new test for the competitiveness of steel plants
Steel plants face a new equation: reducing energy, water, and emissions simultaneously
Energy efficiency technologies reduce steel plant consumption by 5-15% and recycle 90% of water
Alfa Laval Vice President: Energy and water are becoming a new competitive battle for the steel industry
Waste heat recovery technologies have enabled steel plants to reduce energy consumption by 25% and recycle 90% of process water
The Middle East's heavy reliance on gas in industrial processes gives waste heat recovery technologies a strong opportunity to achieve economic returns
Energy costs account for 20% to 40% of steel production costs, depending on the production route and final product. The industry requires vast amounts of water for cooling and operations, with fresh water withdrawal reaching approximately 8.5 cubic meters per ton of crude steel on average globally, according to World Steel Association data.
The energy and water equation, as essential resources for the steel industry, is becoming increasingly sensitive in regions facing high energy prices and water scarcity. Every unit of wasted energy and every cubic meter of inefficiently managed water translates into additional costs and greater pressure on the plant's competitiveness.
This highlights the importance of waste heat recovery technologies, enhancing heat transfer efficiency, water recycling, and closed-loop cooling systems as tools that can combine reduced operating costs with decreased resource consumption and emissions. Given the significance of these issues for the steel industry, "Arab Steel Bulletin" conducted this interview with Alban Hohmann-Schauly, Vice President for the Energy Sector at Alfa Laval for the Middle East, South and East Africa (MESEA) region, to explore opportunities for reducing energy and water consumption in steel plants, the feasibility of waste heat recovery, the future of low-emission steel in industrial equipment, and the climate risks that are beginning to impact plant operations in the region.
Hohmann-Schauly joined Alfa Laval in June 2026 to lead the Energy sector for the Middle East, South and East Africa (MESEA) region. He previously worked at Caterpillar (a global American company specializing in manufacturing construction and mining equipment), where he managed the data center sector in Africa and the Middle East. He possesses over 16 years of experience in the energy, industrial, and business development sectors, and has held leadership positions in several other companies.
Alfa Laval is a Swedish company globally specialized in heat transfer, separation, and fluid handling technologies, serving industrial sectors including energy, marine, food, and water treatment. Founded over 140 years ago, specifically in 1883, the company has customers in approximately 100 countries and employs over 23,670 people. It is listed on the Nasdaq Stockholm exchange. In the steel industry specifically, the company offers solutions for heat recovery, heat transfer, cooling systems, and water management, emphasizing that improving energy efficiency and waste heat recovery have become key factors for reducing costs and enhancing operational efficiency.
In the Middle East, South and East Africa region, Alfa Laval's operations date back to 1994, when the company began its activities from a regional office in the United Arab Emirates. Its operations currently include 12 locations, along with six service centers and nine field service stations, serving 43 countries in the region.
In the interview, Hohmann-Schauly estimates that integrating heat recovery technologies and optimizing cooling systems can increase overall energy efficiency in steel plants by 5% to 15%, while older plants undergoing modernization projects may achieve a reduction in specific energy consumption between 10% and 25%.
Regarding water, Hohmann points to the possibility of recycling up to 90% of process water and reducing cooling water requirements. Improving energy efficiency in a medium-sized plant can translate into reducing carbon dioxide emissions by tens of thousands of tons annually. He also anticipates that low-carbon materials will become more prevalent in heavy industrial equipment, while he believes water scarcity represents one of the most significant climate risks that steel producers should prepare for. Here is the interview:
The International Energy Agency emphasizes that energy is a crucial element in the competitiveness of primary industries, including steel. How does energy efficiency contribute to reducing operating costs and emissions in the steel industry, and where are the biggest opportunities for improvement within steel plants?
One of the main opportunities for reducing operating costs and emissions in the steel industry lies in recovering and utilizing the large amounts of wasted heat that are typically lost through process streams and exhaust gases from furnaces. At Alfa Laval, we address this through the 'Energy Hunter' methodology, which combines detailed energy audits, process integration studies, and heat recovery assessments.
What level of energy consumption reduction can a steel plant realistically achieve using heat recovery technologies and process optimization solutions offered by Alfa Laval? Is there an estimated average percentage or a benchmark range?
Based on our experience, steel plants using both the DRI-EAF and BF-BOF production routes can often achieve overall energy efficiency improvements of around 5–15% through enhanced heat integration, optimized cooling systems, and waste heat recovery.
Older plants, particularly those undergoing modernization projects, can reduce their specific energy consumption by approximately 10–25% by recovering energy from high-temperature exhaust gases and reusing it for process heating, steam generation, or utility systems. This is equivalent to 40–110 kWh per ton of steel produced, depending on the plant's configuration and existing heat integration systems.
Are the benefits of improving energy efficiency limited to reducing fuel and electricity consumption, or can they also extend to reducing emissions?
The impact of these improvements is not limited to reducing fuel and electricity costs; they also support decarbonization goals. In the Middle East, where industrial processes rely heavily on natural gas, waste heat recovery can yield strong economic returns while significantly reducing carbon dioxide emissions and enhancing the overall sustainability of the plant.
Besides energy, water has become an increasing challenge for the steel industry, especially in water-scarce regions. How can this challenge be addressed through recycling technologies?
The importance of water efficiency is growing in the Middle East and North Africa region. With steel production expanding in water-stressed areas, improving the combined use of water and energy becomes essential. Modern technologies are succeeding in recycling a large proportion of the water used in steel manufacturing and reducing cooling water requirements.
To what extent can Alfa Laval's solutions reduce total water consumption in steel plants, and what is the potential scale of savings in areas facing severe water scarcity?
Alfa Laval supports this through a combination of highly efficient heat transfer and circulation technologies, enabling closed-loop cooling systems and water recycling systems that can recycle up to 90% of process water while reducing the demand for cooling water. In our service facilities in Saudi Arabia, these systems save over one million liters of water annually at each site.
Alfa Laval's heat transfer solutions can reduce cooling water needs by 10–30%, while advanced circulation, water reuse, and desalination technologies improve system efficiency and water recovery. Together, these solutions help reduce operating costs, minimize freshwater withdrawal, and enhance the sustainability and resilience of steel manufacturing operations.
What is the typical payback period for steel plants investing in energy efficiency and waste heat recovery systems?
Payback periods vary depending on plant size, existing infrastructure, local energy costs, and project complexity. In our experience, the strongest business cases typically come from heat integration and waste heat recovery projects, as they convert previously lost energy into measurable operational savings.
Low-capital expenditure measures and heat integration improvements often achieve payback periods of one to two years, while larger waste heat recovery systems typically have payback periods of two to three years. Alfa Laval's 'Energy Hunter' assessments are designed to identify and prioritize the highest-return investments, enabling steel producers to implement energy efficiency investments that deliver both financial and sustainability benefits.
Moving from energy and water as inputs for the steel industry to its outputs, can you provide an annual quantitative estimate of CO2 emissions that a medium-sized steel plant could eliminate by implementing Alfa Laval's range of technologies?
The precise CO2 reduction depends on factors such as the plant's production capacity, its production route, energy intensity, and the extent of existing heat integration. From a thermodynamic perspective, steel plants contain significant amounts of recoverable energy in high-temperature exhaust gases, cooling circuits, and process streams. By implementing Alfa Laval's heat transfer, circulation, waste heat recovery, and process optimization technologies, a medium-sized steel plant can typically improve overall energy efficiency by 5–15%, reducing the energy required to produce each ton of steel.
In practice, this level of improvement can translate into tens of thousands of tons of CO2 emission reductions annually for a medium-sized steel plant, while simultaneously lowering fuel consumption, operating costs, and enhancing the plant's overall sustainability.
Alfa Laval has begun using low-carbon steel in the manufacturing of its equipment. What is the carbon footprint reduction achieved by this approach?
In collaboration with SSAB and Acerinox, Alfa Laval is integrating fossil-free, low-carbon steel into selected heat exchanger products. The use of SSAB Zero™ steel can reduce the embodied carbon footprint of a heat exchanger frame by up to 39%, while Acerinox's EcoACX® stainless steel offers a carbon footprint approximately 50% lower than conventional alternatives.
Do you anticipate that low-carbon steel will become a standard requirement for industrial machinery?
With increasing customer focus on reducing emissions and lifecycle sustainability, we believe low-carbon materials will gradually become a standard expectation for heavy industrial equipment.
Does the current premium cost of low-carbon steel pose a significant barrier to its widespread adoption in heavy equipment?
Low-carbon steel is currently associated with a price premium, a natural consequence of these materials being nascent and produced in relatively low volumes. However, this premium is expected to gradually shrink over time as production capacity increases, supply chains mature, and customer demand continues to grow.
How do you view the competitiveness of low-carbon steel, given this price premium?
From Alfa Laval's perspective, the assessment goes beyond the initial purchase cost. Low-carbon steel can significantly reduce the embodied carbon footprint of industrial equipment, helping customers meet sustainability goals and prepare for increasingly stringent market expectations and regulatory requirements. As decarbonization becomes a stronger driver in purchasing decisions, we expect low-carbon materials to become progressively more competitive and prevalent in the heavy industry sector.
While the steel industry is typically discussed as a source of emissions, how have the physical climate impacts—such as extreme heatwaves, water scarcity, floods, and supply chain disruptions—begun to affect steel mill operations themselves?
Every one-degree Celsius increase in cooling water temperature can reduce cooling efficiency and increase utility demand, making thermal management a strategic rather than merely operational issue.
The physical climate impacts are increasingly significant for industrial plant operators. Water scarcity is already a major challenge across the Middle East and North Africa region, where steel production, hydrogen developments, and population growth compete for limited freshwater resources. Concurrently, sea surface temperatures in the northern Red Sea have risen by approximately 0.4–0.45°C per decade, while parts of the Arabian Gulf have recorded warming rates approaching 0.7°C per decade, placing additional strain on cooling water systems and heat rejection equipment.
These trends are driving increased focus on resilient cooling systems, water recycling and reuse, desalination capabilities, and energy-saving heat recovery solutions. Through advanced heat transfer and circulation technologies, Alfa Laval helps industrial facilities reduce cooling water consumption by 10–15%, recycle up to 90% of process water, and improve thermal efficiency in key operations. The impact is not only reduced resource consumption and operating costs but also helps steel mills maintain production reliability under increasingly challenging environmental conditions.
What climate-related risks do you believe are not receiving sufficient attention from steel producers, despite their potential to disrupt production in the coming years?
Water availability remains one of the least appreciated climate-related risks in the steel industry. As the steel industry and emerging hydrogen-based production routes are water-intensive, reliable long-term access to water supplies has become a critical consideration for operational resilience and future growth.
Have companies in the Middle East region actually started re-engineering cooling systems, water management, and supply lines to mitigate this risk?
We are already seeing steel producers investing in water recycling, wastewater reuse, desalination, and closed-loop cooling systems to reduce reliance on freshwater resources and enhance supply security. The main challenge now is to scale these initiatives through coordinated long-term investments, appropriate technology selection, and integrated water management strategies. Companies that proactively address water resilience will be better positioned to maintain production reliability and competitiveness in an increasingly resource-constrained environment.
