August 2023 Volume 5

Official Publication of the Forging Industry Association

August 2023 forging.org

Tooling & Die Materials

The Evolution of Tool and Die Making for Forgers Page 16

Tool and Die Repair Alloys Page 28

Forge Tooling, Troubleshooting and Maintenance Page 22

Forge Fair 2023 Recap Page 48

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PRESIDENT'S NOTE

President's Note

Stanley Black & Decker (Craftsman owner) closing the recently opened and ‘attempted’ highly-automated Texas plant built to forge Craftsman tools (we’re planning a rebuttal editorial). Across the membership I believe we’re just not hearing stories like this thanks to the great integrators and press builders who serve our industry. And our captive forging members that have automation have been quite successful and great examples to the membership for years. Government Relations After a nearly yearlong effort of turbocharging our lobbying efforts, I’m happy to report the U.S. Senate has appropriated funds for a ‘Metal Forging Innovation’ program under the DOD budget. Following this to its conclusion (the funding still has to pass Conference reconciliation this Fall) this will be the first significant (millions) government funding to the FIA in our 110-year history. This investment in the industry would come at a time of record grants given to universities (and now community/trade schools) by FIERF – which does not have endless funds. In addition to FIA FIERF’s Technical Roadmap (revised November 2022), we’ve developed and presented a great forging automation plan to the DOD for working with our community colleges located closest to our membership to train-up ‘robot heroes’ at a quicker pace, as our members increasingly install automation and seek more permanent position automation specialists. A special thanks here to your FIA Board of Directors who approved this additional investment in lobbying, the FIA GR Team, and most importantly the FIA members who stayed over during FIA’s Lobby Day for the ‘extra’ lobbying effort to make this happen – Scot Forge, Weber Metals, Ellwood Group, Modern Forge, and Southwest Steel Processing (Park Ohio). Exciting times for FIA members I would say! As always, the staff and I enjoy working with you all and sincerely appreciate your support. Best regards,

I hope everyone is having a great summer! I can’t help but notice how it flies once the July 4th holiday has passed. There was a time when FIA staff would catch a breather during these months, but there is much to do, and meaty issues on the plate to work on, so we keep a steady, if not frantic pace, during these summer months.

Workforce Development So, let us start at the beginning – the workforce! We do not get very far without one, right? Kudos to the FIERF Board of Trustees and staff for knocking out the first-ever Forge the Future Summer Camp in July with 27 future forgers in attendance. Special thanks to our members who were part of the program (Tri-C, American Axle & Manufacturing, SIFCO, Fives North American Combustion, Scientific Forming Technologies, Enprotech and Colorado School of Mines) and our Cleveland-based member, Pursuit Aerospace, who provided a great plant tour experience. As our staff experienced, keeping young people (middle schoolers to early high schoolers) engaged and safe takes some serious energy and focus! Moving into the college years, the 2023 FIERF Forging Competition was a great success with nine schools participating in creating their custom “tuning forks” and Ben Abbott of ‘Forged in Fire’ making a special appearance at Forge Fair to emcee the awards and visit with members and schools. The 2024 competition is already in the works for the week of April 22nd in Milwaukee, WI. Visit www.fierf.org If you didn’t know, it is the five year anniversary for the FIA Forging Automation Conference & Plant Tours event. We are back in Canton, Ohio alongside the Forging Foundation Golf Outing at Firestone. The event includes plant tours of TimkenSteel Faircrest plant (August 23rd) where attendees will see one of the largest North American installed vertical bloom casters, and ArtiFlex Manufacturing (August 24th) which features several automated processes. We know automation success is not guaranteed and many of you reached out to me after seeing the news in Wall Street Journal of for more details. Automation

James R. Warren President and CEO Forging Industry Association

PUBLISHER James R. Warren jwarren@forging.org MANAGING EDITOR Angela Gibian angela@forging.org Editorial Staff

Board of Directors

Antonio Alvarez Robert Brodhead Mark Candy Mark Derry Robert Dimitrieff

Jose Lozano Mike Morgus Matt Natale James Romeo Joe Schwegman

ASSOCIATE EDITOR Amanda Dureiko amanda@forging.org DESIGN Lorean Crowder lorean@forging.org

CHAIRPERSON Chelsea Lantto VICE CHAIRPERSON Jim Kravec

FIA MAGAZINE | AUGUST 2023 1

CONTENTS

AUGUST 2023 | VOLUME 5

40 Assessing the Potential of Leadership Candidates INDUSTRY NEWS 42 Canton Drop Forge Showcases its “New” 50,000-lb Hammer at Open House 45 Forging Industry Association Names New Executive Leaders 46 Artist-Blacksmith’s Association of North America Announces 50th Anniversary Celebration & 2024 Conference 48 Forge Fair 2023 Recap 51 Valley Forge & Bolt Launches Android Application Accessory for SPC4® Load Verifying System 52 What’s New with FIA’s Forging University 54 Metform’s Hot Forging Fleet Is Growing 55 Welcome New Members 58 FIA Upcoming Events FOUNDATION NEWS 60 FIERF Professors Summit Debrief 61 FIERF Announces 2023-2024 Scholarship Recipients 62 FIERF’s First Summer Camp Was a Hit! 64 Introducing the Art of Forging to College Students 65 FIA & FIERF Announce the Publication of First Children’s Book 66 Donor Spotlight: Nucor Steel FORGING RESEARCH 67 Forging Defect Detection Using Artificial Neural Networks 72 Simulation-based Digital Twin Architecture for Enhancing Forging Part Quality and Control MEMBERS SPEAK 78 The Power of Goodwill AD INDEX 80 August Advertiser Index

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DEPARTMENTS 1 President's Note 4 Washington Update 10 Energy 16 Equipment & Technology 22 Maintenance 26 Automation 28 Materials 30 Operations & Management 42 Industry News

PRESIDENT'S NOTE 1 President's Note WASHINGTON UPDATE

4 FIA Government Affairs Update 6 Using Trade Remedies to Deal with Low-Priced Imports in Canada 8 Washington’s Second-Half Agenda ENERGY 10 A Seat at the Table 12 Forging the Climate Path EQUIPMENT & TECHNOLOGY 16 The Evolution of Tool and Die Making for Forges MAINTENANCE 22 Forge Tooling, Troubleshooting and Maintenance 24 Cost of Quality Measurement and Reporting AUTOMATION 26 The First Step to Automation MATERIALS 28 Tool and Die Repair Alloys OPERATIONS & MANAGEMENT 30 My Employee Can’t or Won’t Do Her Job and I Need To Make a Change – Why Is It So Complicated? 32 We Can't Find Good Help! 36 Emerging Trends in Supply Chain Management 38 Cybersecurity Vantage Point: People Prevail Over Too Many Tools

60 Foundation News 67 Forging Research 78 Members Speak 80 Ad Index

Official Publication of the Forging Industry Association

August 2023 forging.org

Tooling & Die Materials

The Evolution of Tool and Die Making for Forgers Page 16

Tool and Die Repair Alloys Page 28

Forge Tooling, Troubleshooting and Maintenance Page 22

Forge Fair 2023 Recap Page 48

For advertising contact info@forging.org Image courtesy of Adaptec Solutions

FIA Magazine (ISSN 2643-1254 (print) and ISSN 2643-1262 (online)) is published 4 times annually, May, August, November and February by the Forging Industry Association, 6363 Oak Tree Blvd., Independence, Ohio 44131. Telephone: (216) 781-6260. Only (1) copy of the print version distributed at no charge only to members of the Forging Industry Association. Digital version distributed at no charge to qualified individuals. Subscription requests available at www. forging.org. Printed in the U.S.A. Periodicals postage paid in Independence, OH and additional mailing offices. POSTMASTER: Send address changes to Forging Industry Association, 6363 Oak Tree Blvd., Independence, Ohio 44131. Copyright © 2023 by the Forging Industry Association in both printed and electronic formats. All rights reserved. The contents of this publication may not be reproduced in whole or part without the consent of the publisher. The publisher is not responsible for product claims and representations or for any statement made or opinion expressed herein. Data and information presented by the authors of specific articles are for informational purposes only and are not intended for use without independent, substantiating investigation on the part of potential users.

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FIA MAGAZINE | AUGUST 2023

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WASHINGTON UPDATE

FIA Government Affairs Update By Megha Patel

It has been just over a year since the Forging Industry Association (FIA) started its first-ever in-house government affairs department. The time has just flown by! While the last year came with challenges accelerating our advocacy efforts; it has been nothing short of exciting and gratifying. In the past year, FIA has met with countless congressional offices, the White House, the U.S. Department of Commerce and Canada’s Prime Minister’s Office to name a few. Not to mention several plant visits from key policymakers and a historic level of funds raised for the ForgingPAC. All to say -- there is never a dull moment in the government affairs department at FIA. During FIA’s Lobby Day (February), FIA, The Franklin Partnership and a handful of member companies attended a meeting at the White House. This meeting helped spur an additional meeting with the Made in America office, which falls under the White House’s Office of Management and Budget. Members and FIA expressed forgers’ perspectives on the Buy American rules concerning offshore wind energy. Members highlighted the North American forging industry's open capacity and its ability to produce the majority of the components domestically needed by OEMS. FIA has re-engaged with Cassidy Levy Kent, a leading trade law firm based in Washington, D.C. Back in 2019, Cassidy Levy Kent successfully won the Fluid End Blocks anti-dumping case against China, Germany, India, and Italy brought forward by a group of FIA member companies. The goal of reengaging trade counsel is to explore opportunities to bring forward a broad AD/CVD case in front of the U.S. Department of Commerce. We are actively working on gathering data and evidence from FIA Members to prove injury. In fact, the association, The Franklin Partnership and select members met with the Commerce Department a couple of months ago to determine potential next steps and opportunities to pursue a case. FIA has an open dialogue with the Department of Commerce and will continue to work with them to promote the protection of the domestic forging industry. For the first time in our association’s history, we organized a Lobby Day up in Ottawa, Canada. FIA has conducted numerous Lobby Days in Washington, D.C., however, the opportunity has never presented itself in Ottawa, the capital of Canada. We have been expanding our advocacy efforts throughout North America aggressively, and this event helped accelerate the forging industry’s influence in Canada. Due to support from the FIA’s Canada Advisory Committee, FIA staff and member companies were able to meet with several Members of Parliament, officials from the Department of National Defense and the Prime Minister’s office. The meetings consisted of great discussions on challenges facing the industry, one integrated North American market, and domestic capacity and capability. Through our meetings with the government

and lawyers, we learned more about the country’s Harmonized System codes and the need to add more of the common forged component codes found in the U.S. Harmonized Tariff Schedule (HTS). Therefore, FIA has engaged with Cassidy Levy Kent Ottawa to increase the list of forging HS codes, which will allow the Canadian Customs Authorities to more accurately track and identify imported forgings to stop the illegal importation of dumped or subsidized forgings from abroad. The ForgingPAC fundraising event was a huge success at this year’s Annual Meeting down in Naples, Florida due to the generosity of our members. More than $12,000 was raised in one night, totaling approximately $24,000 in contributions since the PAC was relaunched. Never in FIA history has the ForgingPAC raised that much money at one event nor in a one-year timeframe. We are incredibly grateful for our members’ generosity and their tremendous support of our advocacy initiatives. We hope to keep growing the ForgingPAC as it is vital to educating and raising awareness in our nation’s capital. FIA has been able to achieve many goals in the first year since the government affairs department was launched. None of our advocacy efforts are possible without the backing and faith of our members and we could not be more grateful for it. Here’s to another year of promoting the North American forging industry and building upon our advocacy successes! Megha M. Patel

Government Affairs Manager Forging Industry Association Phone: 216-781-6260 Email: megha@forging.org

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Sustainability Starts Here

WASHINGTON UPDATE

Using Trade Remedies to Deal with Low Priced Imports in Canada By Andrew M. Lanouette

Low-priced import competition from companies offering foreign products can have a devasting impact on Canadian manufacturers in terms of sales volumes and revenues, financial results, and overall company performance. Often this will occur despite deploying every tool in the business toolbox to secure volumes or pricing in the market. What Canadian manufacturers often witness is an unstoppable erosion of their position for that product. But this does not need to be the case. Under Canadian law, manufacturers can level the playing field: they can file a trade case.

Once a complaint is filed, the CBSA must determine whether there is sufficient evidence to initiate an investigation. The initiation standard is low and the CBSA’s decision is based on information reasonably available to the complainants. Once initiated, the CBSA investigates whether foreign producers and exporters are dumping products into Canada or if foreign governments are subsidizing the products. To be successful, the CBSA must find dumping margins of at least 2% and/or that the product is subsidized by an ad valorem rate of at least 1%. The CBSA’s work is focused entirely on importer and foreign exporter data. The Canadian International Trade Tribunal (“CITT”), on the other hand, separately and in parallel investigates whether the unfairly traded products are injuring the domestic industry in Canada or threatening the domestic industry with injury. In the case of injury, the CITT must find based on the data submitted by the domestic producers as well as on data that the Tribunal itself will collect, that the dumped/subsidized imports are a material cause of the injury sustained by the domestic industry. The causation standard applied by the Tribunal does not require the unfairly priced imports to be “the” cause of the injury sustained; the unfair imports simply must be “a” cause (among possibly many) that is in and of itself material. In the case where no past injury can be determined, the CITT must also consider the threat of injury and must find on a going forward basis over a 12–24-month period that the unfairly priced imports are likely to cause material injury to the domestic industry. The CITT’s proceedings (which are true “inquiries”) are much more like court proceedings, where the domestic industry is required to show that they are being injured or threatened with injury by the unfair imports based on written materials and witness testimony given at a hearing. So what does a domestic industry accomplish if it succeeds in a trade case in Canada? A successful case in Canada leads to the CITT issuing an affirmative “finding,” and the CBSA begins enforcing that finding. This consists of mandatory floor pricing levels that imports into Canada must meet or exceed if importers are to avoid being assessed duties. While in the United States, the authorities enforce dumping and subsidy orders by imposing an ad valorem tariff that matches the margin of dumping or amount of subsidy found during the previous investigation (or administrative review), Canada does things a bit differently. Instead of enforcing an ad valorem duty rate, Canada issues model-specific minimum prices—the same “normal values” used to determine dumping—that serve as a price floor for the exporter. The exporter must sell at an ex works price to Canada at or above these minimum price floors or the importer of the product in

Specifically, under Canada’s Special Import Measures Act , a domestic manufacturer can file a “complaint” with the Canada Border Services Agency (“CBSA”) alleging that products imported into Canada are unfairly traded and harming the domestic industry making competing products in Canada. Companies typically act against two types of unfair trade practices: foreign company dumping and foreign government subsidization. Unfair dumping occurs when a foreign company sells to Canada at an “export price”—essentially ex-works—that is below the “normal value.” The “normal value” is either (1) the foreign company’s selling price in the home market for the same or similar product sold in substantially the same quantities to the same levels of trade as the Canadian customers, (2) the foreign company’s fully allocated cost of production plus an amount for profit, or (3) the price at which the foreign company sells the same or similar product to third countries comparable to Canada. Unfair subsidization occurs when foreign governments or public bodies provide defined monetary or non-monetary support to foreign companies that benefit from a product sold to Canada. Canadian manufacturers must also show that the domestic industry (on a consolidated basis) has been “injured” or is “threatened with injury” by reason of the unfairly traded goods. To do this, Canadian manufacturers typically must have some declining performance— such as declining production, sales, market share, employment, or profits—due to competition with the imports.

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FIA MAGAZINE | AUGUST 2023

WASHINGTON UPDATE

Canada will pay duties on every sale in the amount of the difference between the actual export price used to import the product into Canada and the model-specific normal value determined by the CBSA during its investigation. Most importantly, foreign exporters do not get credit for making sales above normal value: in order words, they cannot offset dumped sales with undumped sales like under the U.S. system. A Canadian dumping finding, therefore, forces the exporter to “price up” to their normal values to avoid having their Canadian importing customers pay duties. For subsidies, the CBSA determines a per unit monetary amount (set in the foreign country currency) that the Canadian importer must pay on every product imported into Canada. That per unit amount is based on the level of subsidy found by the CBSA during its investigation. Both the normal value and the amount of subsidy can be updated by the CBSA during the life of the finding through “re-investigations” when market conditions (e.g. product prices or costs) change. The next question then becomes: With normal value price floors and subsidy rates in place, what is the actual benefit to domestic industries in Canada? Typically, trade cases benefit domestic industries in two ways. The first typical result of a Canadian trade case is that exporters exit the Canadian market entirely or significantly reduce their sales volumes in Canada. In the normal course, the normal values established by the CBSA through their investigation of foreign company pricing and cost data can make foreign companies uncompetitive in the Canadian market. As a result, domestic producers typically regain market share previously captured by the unfairly traded goods. An example of this is the case of Small Diameter Line Pipe from China . In 2014, the last full year before the finding was issued by the CITT, imports from China were trending at nearly 200,000 MT per year. By the year after the finding was issued, i.e., calendar year 2016, imports from China had fallen to a mere 4,000 MT and ever since have never exceeded 20,000 MT per year. In other words, the finding caused Chinese exporters to abandon the Canadian market. This provided the domestic industry with a much-needed opportunity to recapture market share. The second way that Canadian domestic industries benefit from trade cases is that market prices typically rise in the Canadian market as the exporters need to raise their prices above normal value to avoid dumping duty assessments. This allows the domestic producers to improve their profitability. An example of this is the 2016 Gypsum Board case. In the context of that trade case, the domestic industry raised its prices by 30 percent almost immediately after the CBSA imposed provisional duties (90 days after the Agency initiated the investigation). Thanks to the imposition of final duties and the issuance of normal values, the sole remaining Canadian gypsum board manufacturer in Western Canada has used the leveled playing field to focus on raising its selling prices and regaining profits after previously having to lower prices to hold onto its declining market share in competition with the dumped gypsum board imports.

The Canadian trade remedies system exists to protect the domestic industry when it faces unfair competition from imports. It is a powerful tool that many Canadian manufacturers do not realize they have in their toolbox, and it can and should use to level the playing field whenever unfair import competition impacts their operations. Andrew M. Lanouette Partner Cassidy Levy Kent Email: alanouette@cassidylevy.com

FIA MAGAZINE | AUGUST 2023 7

WASHINGTON UPDATE

Washington’s Second-Half Agenda By Omar S. Nashashibi

As the FIA looks back at the successes secured over the first half of 2023 – meetings at the White House, more government interest in promoting domestic forgings, and continued tariffs on Chinese imports, we can hardly sit back and glide through 2023 on these accomplishments. With a full legislative, regulatory, and trade agenda, policymakers in Washington, D.C. are just getting started. On the trade front, the FIA succeeded in convincing the Biden administration to keep the 25 percent tariffs on Chinese forgings in place as they contemplate the next steps. Many had thought that officials might have made a decision by now to lift or suspend many of the tariffs on China, but due to pressure, their review of the impact of the Section 301 import tariffs on the U.S. economy and industry continues – and with it, the tariffs on China continue.

The FIA this summer also filed formal comments with USTR about the implementation of the new NAFTA, known as the U.S-Mexico Canada Agreement (USMCA). In its filing on behalf of its members, the associations stated, that, “FIA firmly believes that the USTR and the North American Competitiveness Committee must prioritize combating the circumvention of tariffs by foreign competitors, such as in China, specifically through the transshipment of goods via our USMCA partners.” Transshipment emerged as a significant issue following the imposing of the tariffs on China, which coincided, in part, with the entry into force of the new North American agreement between Canada and Mexico. Seeing the opportunity to ship cheap and subsidized forgings from China through Mexico, competitors to FIA are seeking to exploit enforcement vulnerabilities from the southern border, prompting FIA to press USTR to do more and identify imports of Chinese origin. On Capitol Hill, lawmakers in the Senate are also considering legislation to help U.S. Customs officials with trade enforcement, including in the space of transshipment of goods from China and elsewhere, and ways to improve transparency in Customs declarations. Sources indicate that lawmakers could incorporate this legislation into a broader China and supply chain package Senate Majority Leader Chuck Schumer (D-NY) has tasked the Senate Committee with completing. FIA also is lobbying in support of stronger Buy America language to help ensure taxpayer dollars for government spending go to U.S. forgers. FIA in July weighed in with lawmakers, lobbying to preserve language in the annual Pentagon policy bill to put into law a Biden initiative to raise the domestic content threshold for federal purchases from 55 percent to 60 percent, with increases scheduled for 65 percent in 2024 and 75 percent in 2029. The language in the U.S. House of Representatives legislation will prevent future administrations from softening that language, which would allow more foreign forgings on U.S.-funded projects. FIA and its members have their hands full lobbying on trade policy, making sure tariffs on Chinese forgings remain in place, and pushing legislation to support and strengthen manufacturing in America. And many of these issues have bipartisan support. However, as Congress recently departed for its month-long summer recess, not returning to the nation’s capital until the second week of September and facing a number of deadlines all coming to a head at the end of that month, federal regulators are not letting up. Among the most concerning on the coming regulatory agenda is a potential rule by OSHA to impose restrictions on indoor and outdoor workspaces when the heat index exceeds 80oF. FIA is weighing in with OSHA raising concerns over this regulation that could take a one-size-fits-all approach to workplaces – from dry cleaners and

Treasury Secretary Janet Yellen said in July that the Biden administration had not concluded its mandatory four-year review of the Section 301 tariffs of 25 percent and 7.5 percent imposed by former President Trump starting in July 2018. The Office of the U.S. Trade Representative is still reviewing the economic data and statements provided by stakeholders on the economic impact of the tariff action. FIA testified before the U.S. International Trade Commission in July 2022 and orchestrated the submission of dozens of comments, which, in part, led to the continuation of the tariffs on Chinese forgings during the review. Sources in Washington indicate that USTR may announce its findings in the second half of 2023, with a decision that could involve lifting all tariffs on China, removing some of the tariffs, or maintaining the status quo. The FIA is continuing to pressure the White House to keep the tariffs on Chinese forgings in place and is working with allies in Congress, throughout the administration, and industry, to demonstrate the continued threat that imported Chinese forgings continue to pose to U.S. national and economic security.

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FIA MAGAZINE | AUGUST 2023

WASHINGTON UPDATE

duties test, this proposed rule could make millions more workers eligible for time and a half at a time when many small businesses are already struggling to compete globally. Complicating matters for employers, the rule could possibly take effect with the new threshold as soon as January 1, 2024, and be increased periodically while indexed to inflation. FIA members face uncertainties from all sides – trade policy, workplace regulations, and tax liabilities. However, one certainty remains, government affects all aspects of the forging industry, touches each part of the global economy, and when employed effectively, can strengthen manufacturing in America – or slow it down. This is why FIA is working for you in Washington.

restaurants to farmers and manufacturers. Under discussion as part of an 80oF heat rule are additional PPE and engineering controls, continuous workplace environmental monitoring, including near manufacturing equipment, required rest breaks, access to cold water, and a designated cooling station, among other requirements. Staying with the Labor Department, on July 12, 2023, the Wage and Hour Division sent a proposed rule to the White House for a final review to expand the eligibility of workers to earn time and a half under overtime guidelines. Sources in Washington are reporting that the Department of Labor may raise the current threshold for non-exempt salaried employees from $35,568 to at least $50,000 and possibly as high as $58,000 annually as some on Capitol Hill call for a ceiling of $58,000. While not making changes to the

Omar S. Nashashibi is a founding partner at The Franklin Partnership, LLC, a Washington-D.C. based lobbying firm representing the Forging Industry Association before the federal government. Phone: 202-715-1264 Email: omar@franklinpartnership

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FIA MAGAZINE | AUGUST 2023 9

ENERGY

A Seat at the Table – What Every Forging Company’s Sustainability Manager Needs to Know About Procuring Green Energy By Nancy Gardner

We have observed a problem that is tripping up the sustainability initiatives of many forging companies: overlooking the vital role of energy procurement in meeting sustainability goals. Put more precisely, Sustainability Managers and Procurement Managers – or elevating this to their C-suite counterparts, Chief Sustainability Officers, and Chief Financial Officers – cannot and should not treat energy procurement and sustainability efforts separately. They are part of a continuum upon which your success depends. The solution to the problem is simple. Sustainability Managers belong at the energy procurement table because how and what energy your organization buys has a tremendous impact on your ability to execute your sustainability plans and bring them in on target. Three key points for all Sustainability Managers, Chief Sustainability Officers, and everyone in your forging company who cares about hitting their Corporate Social Responsibility (CSR) targets more quickly and efficiently: Begin Your CSR Reporting Process with All Your Energy Contract Data in Hand, Not Vice Versa We know this sounds basic, but because the sustainability side of the house is not often familiar with the energy-procurement side of the house, tragic mistakes are made – and they can be avoided! Gather energy contracts at the onset of planning your comprehensive sustainability strategy. This process will make it easier for you to find, and accurately report on, the energy data you need for setting your CSR baselines and monitoring them in perpetuity. Jumping on gathering energy contracts for all of your sites now will also help you, in concert with the aid of an experience energy advisor, identify cost-saving opportunities that can fund key sustainability initiatives and/or help you target energy purchases that will quickly A large holder of commercial properties built out a sustainability team to develop and implement a long-term sustainability plan. But that team did not manage, or even know about, the company’s energy procurement decisions. In fact, energy procurement was totally decentralized at the company, with each building manager advance your sustainability goals (more on this below). To put this all in context, let me share a story with you.

running their own process and making their own deals (a big problem when you own tens, hundreds, or thousands of buildings). Instead of working to gather this data up front, the sustainability team focused on other aspects of its CSR reporting. When it finally did get to pulling together the company’s current energy contracts, the process took an additional six months . Not only did the sustainability team have to dramatically revise its report based on the information it uncovered, but in all the time that had passed, energy prices had climbed dramatically. In essence, by finishing with energy contracts instead of starting with them, energy markets had moved up (remember, energy is a volatile commodity), and the company had lost a significant opportunity to buy renewable energy affordably – a lost opportunity and an expensive lesson, both in dollars and in time to fulfill sustainability goals. Know Your Options Forgers have many choices when it comes to buying renewable energy, each with their own merits, risks, and timelines. To help you make the best purchases for your company, here are the three that you need to understand: Renewable Energy Certificates (RECs) – RECs are a financial instrument that represent the green attributes of 1 MW of clean power. While many companies have long-term ESG goals of reaching zero-net-carbon operation, most do not understand that they can green part or all their operations quickly and easily by buying RECs now. You need to be your company’s expert on RECs and also on how to procure them (more on that below). Renewable-Asset-Backed Retail Contracts – This is an emerging product category led by retail energy suppliers. Much simpler than power purchase agreements (which we will address next), renewable-asset-backed retail contracts offer commercial, industrial, and institutional customers renewable energy from a specific project with the convenience of a normal monthly power bill. With the help of an energy procurement specialist like Transparent Energy, your next energy contract(s) could fall into this category, greening your operations for 1-5 years, and potentially longer as you renew contracts, or enter into new ones upon expiration.

FIA MAGAZINE | AUGUST 2023 10

ENERGY

You would be surprised at how effectively the price competition triggered by the auction reduces your cost of going green. In many instances, the auction drives down supplier prices so much that the resulting savings can cover the cost of buying RECs; in others, a supplier aggressively trying to win your business may "throw in" the RECs for free. The same competitive dynamic holds true for our auctions involving renewable-asset-backed retail contracts. Ultimately, the Transparent Energy platform puts the renewable energy market to work for you, stoking competitive dynamics while giving you visibility into, and power over, your key sustainability purchases. Competition, visibility, transparency, control? These are the virtues of online auctions from Transparent Energy that put you in the driver’s seat so you can fulfill your CSR and ESG goals at the right pace and cost for your organization and its many stakeholders.

Power Purchase Agreements (PPAs) and Virtual Power Purchase Agreements (VPPAs) – PPAs are long-term agreements contracted directly with new, large-scale wind and solar farms. In a PPA, a company commits to off-take part or all of a new renewable project – thus creating “additionality,” an attribute many companies crave for their CSR report – and directly uses the resulting energy. A VPPA is more of a financial hedge: it is a financially settled swap contract. As you learn more about these options, keep in mind that PPAs are complex deals and can take a long time to deliver (they require a new renewable energy-producing project to be developed, which can take years), so even if you are interested in pursuing one, you should consider layering in the purchase of RECs and leveraging the benefits of renewable-asset-backed retail contracts. Buy Renewable Energy Like A Pro Knowing what renewable energy products are available, and how they will advance your sustainability goals, is important, but once you have that knowledge you will need to transact. How you procure green energy matters! One common mistake to avoid: sole sourcing. That means never just buying a renewable-energy product without fielding competitive bids. Stoking competition for your renewable-energy contracts is how you gain leverage, which translates into better pricing, and ultimately ROI. Transparent Energy is an expert on maximizing competition for your purchase of renewables through the use of online auctions for RECs and renewable-asset-backed retail contracts, and our platform for transacting more complex PPAs. In a Transparent Energy-led online auction event, we will bring multiple suppliers into your procurement to bid live for your renewables purchase or project. For PPAs and VPPAs, we leverage our platform and extensive pool of project developers to maximize your choices and reduce costs. Let us take a closer look at buying RECs. If you need to buy RECs now, we can set up an auction for that. A more strategic approach would be to work with Transparent Energy to handle your entire electric or natural gas load and let us build the purchase of RECs or other renewable products into that procurement. For example, it is easy for us to set up an auction where multiple suppliers are bidding on a 12-month, 24-month, and 36-month traditional energy contract, and then run those same terms with 25%, 50%, 100% green via RECs.

If you are ready to explore, or execute on, buying renewables to help meet your company’s CSR and ESG goals, please contact Nancy at ngardner@ transparentedge.com.

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ENERGY

Forging the Climate Path – Routes to CO₂-free Components with the help of FRED By Dr. Hans-Willi Raedt

Introduction Forging is the production technology that provides superior strength components for automotive applications in the powertrain, chassis and, increasingly, in the vehicle body. Materials deformed several times, usually under compressive stress, are fine-grained, with inclusions that are either shattered or that follow the direction of the load. This results in high-strength and, at the same time, very ductile components with high toughness. A range of current and future components in the automotive industry (rotor shafts with splines or gears, transmission parts, anti-friction bearing components, safety-relevant chassis components) are only conceivable with forging. This is also true of applications in other industries like rail, aviation, and energy. Since the starting material – in cars mostly steel and aluminum – is produced from ore or scrap and since it needs to undergo one or more heating processes depending on the forging, material and heat treatment technology, these parts are energy-intensive and, according to the current state of the art, have high CO₂ emissions. However, the German forging industry is embracing its responsibility and proactively addressing the issue of minimizing CO₂ emissions.

Initial Situation and Solution Approach The German forging industry is energy-intensive with an estimated energy consumption of 3TWh in the form of natural gas and electric power, not taking into account the starting material used1. Depending on the forging method, the typical process sequence might consist of the following sub-steps, each of which may be carried out more than once: production and supply of the input material (steel, aluminum, titanium, magnesium, brass), cutting, precoating, heating, multi-stage single-step or incremental forging, heat treatment and machining. Today, energy consumption is invariably associated with CO₂ emissions. The “climate” measure of the European Green Deal specifies a reduction of net greenhouse gas emissions of at least 55% by 2030 compared to 1990 levels and calls for climate neutrality by 20502. Carbon pricing is already making CO₂ emissions economically relevant to a small extent and will do so to an even greater degree in the future. In the medium term, however, avoidance of this issue will be completely unacceptable to stakeholders. The automotive industry, in particular, is currently already spurring the supply chain to address the topic of CO₂ emissions in production.

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On the one hand, the demands include quantifying the Product Carbon Footprint (PCF) of supplied components; on the other hand, continuous measures for reducing the PCF are being called for [Fig. 1].

Fig. 2: Impressions of FRED The result for this typical closed-die forging reflects the basic characteristics of many forged components. The material used makes up the largest proportion of the PCF. In second place comes heat treatment, followed by heating to forging temperature. A factor influencing the proportions is whether the steel comes from the crude or electric steel route, or whether, for example, aluminum is used. Other influencing variables include the forging temperature and whether any heat treatment is carried out at all after forging. However, the various potential constellations mean that is impossible to establish a general rule of thumb. Instead, the FRED analysis based on industrial data is absolutely essential in order to identify potential ways of reducing the carbon footprint. EMMA: Workshop “Emission-free Manufacturing of Forgings” The path to reducing or even avoiding CO₂ emissions involves green electric power. This makes it possible to produce steel without CO₂ emissions via the direct reduction route using green hydrogen, via the scrap electric route, or by adopting completely new approaches3. Also conceivable are electric (re-)heating processes, e.g., for open die forging, rolling or for heat treatments in the forge or steel mill. Alternatively, hydrogen4 can be used, or else methane, which is synthetically produced from electricity. Similarly, heating processes in drop forges are now mostly inductive, so green electricity could avoid CO₂ emissions here, too. However, it is also clear that completely moving away from fossil fuels for material production will entail significant investment and operating costs. Likewise, converting today’s gas-based heating or heat treatment processes to hydrogen or electric power will also incur high costs. Accordingly, it makes a lot of sense to develop additional ideas for increasing material and energy efficiency, as these can, at least in part, offset the higher energy costs of the future, thereby rendering the transition to CO₂-free manufacturing more economical. By being able to calculate CO₂ emissions for various forging process chains, the groundwork is laid for evaluating ideas on how to reduce emissions. Accordingly, a workshop was held in November 2021 in which 60 participants from 43 companies and 13 research institutes developed ideas for reducing CO₂ emissions using

Fig. 1: Stakeholder demands on the manufacturing industry. The forging industry in Germany is proactively addressing this challenge together with its partner industries. Thus, in December 2020, the “NOCARBforging2050” started. Its first result was FRED. FRED – Forging Footprint Reduction Tool In the first phase of this project, the FRED tool has been developed to calculate the PCFs for forged parts. 50 companies both from the forging as well as partner industries have participated in this. FRED is designed as a web application. To calculate a PCF, some basic data is entered: component weight, electrical power mix used, PCF of the starting material and some other information. Users then enter the individual process sequence of their product. For these processes, the specific consumption of electrical energy, gas and other materials is derived from a database. In addition, the unavoidable material losses are specified for the individual processes. This information is then used to calculate the amount of CO₂ emitted for the end product. Data on electric power and gas consumption as well as on the typical material losses were obtained during the project from the numerous participating companies and stored in the FRED database. Although there will certainly always be potential for refining the data, FRED provides uniquely detailed analyses for metalworking processes. Fig. 2 shows the login page, the input of basic data and of the process sequence, as well as an analysis result for a quenched and tempered yoke from the drive shaft.

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example components. During this kick-off workshop, 51 initial ideas were generated for reducing CO₂ emissions in forging. These ideas are classified according to the following criteria: Percentage of CO₂ Savings Potential, Maturity Horizon (can be implemented directly, can be developed in a project) Realization Timescale and Implementation Costs. In addition, the ideas are sorted according to topic: Material Production, Material Properties, Heat Treatment, Forging Process, Infrastructure Optimization and Other.

engineering steel and also of high-alloy steels falls to around 50%6,7. Other long steel producers are likewise working intensively on lowering the carbon footprint of their products8. As Fig. 2 shows, the heat treatment of components is the second strongest driver of CO₂ emissions. With regard to forging materials, there have been numerous developments in the past 20 years aimed at replacing quenching and tempering processes with cooling from the forging heat. Improved dispersion hardening steels, bainitic steels9 or even air-hardening martensites10 are available for this purpose. With these new forging materials, CO₂ emissions and, in most cases, costs can be reduced in production. Furthermore, the PCF can be optimized if regenerative electrical energy is used by forging companies with better efficiency11, or if input material savings are achieved through a preforming operation or through a more finely tuned forging process.

Fig. 3: Impressions from the workshop and overview of the results Fig. 3 shows that the workshop led to a very broad spectrum of ideas. Based on the example components, the ideas indicate a CO₂ savings potential of between 3% and 50%. In some cases, it would be possible to apply several of the ideas to a component at the same time, thereby adding to the savings potential. The timeframe relating to the maturity of the ideas ranges from immediately practicable to a development period of more than 6 years. However, several years’ implementation time must certainly be added before the idea can be fully applied in practice. The implementation costs for the generated ideas likewise vary greatly. From this initial snapshot of potential solutions for mitigating CO₂ emissions, it is clear that a sound assessment of CO₂ savings, for example using the FRED calculation tool, is necessary for prioritizing the most efficient ideas. Ideas on Materials, Heat Treatment, Forging Processes, and Infrastructure The material contributes most to the carbon footprint of forged products. Accordingly, efforts to use materials with a lower PCF are a highly effective measure for reducing the CO₂ emissions of forged components. Here, there are already some solutions on the market that can be taken advantage of. For example, a Swedish long steel manufacturer is offering the option of CO₂-free long steel from the beginning of 2022. CO₂-free refers to Scope 1 and 2, whereby part of the reduction is achieved through carbon offsets. However, the use of such offsets is expected to decrease significantly in the coming years through appropriate infrastructural measures5. A German steel manufacturer offers a “green steel”, which is melted in an electric-arc furnace using electricity from renewable energy sources. As a result, the PCF (Scope 1 and 2) of unalloyed

Fig. 4: How the ideas for mitigating CO₂ affect the PCF of a drive shaft yoke. Fig. 4 shows how the input variables or technical possibilities that were mentioned above and that are already available can lead to a significant reduction in the CO₂ footprint of an example component. In the context of pre-competitive cooperation in the industry, it is clear that no costs may be discussed. Chiefly, CO₂ reduction is reliant on the availability of climate-neutral electrical energy and sufficient steel scrap or directly reduced iron. Similar relationships are valid for aluminum, albeit with different ratios to each other. Also crucial to the implementation of these ideas, however, is consistent technical cooperation along the entire supply chain during product development. Summary and Outlook It is already possible today to significantly reduce the PCF of forged components using the options and technical possibilities offered on the market. This can be achieved primarily through CO₂-free electrical energy, although this is currently not available in the volumes required to achieve a complete transition in the materials and in the forging industry. Major investments in power generation and other infrastructure, particularly in the raw materials industry, are needed to significantly mitigate CO₂ emissions. From today’s perspective, it is not possible to specify an exact timeline for this. Further ideas for improving material and energy efficiency are therefore necessary and currently available for achieving considerable reductions in CO₂ emissions as quickly as possible and in an economically viable way. The forging industries are proactively addressing these requirements.

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