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How to decarbonize the steel sector

Steel is one of the most widely used materials in the world, with applications ranging from construction and transportation to machinery and household appliances. According to the World Steel Association, global steel production reached 1,864.0 million tonnes in 2020, with China, India, Japan, and the United States being the top four producers. The European Union, as a whole, produced 138.8 million tonnes of steel in 2020, ranking second after China [1].

However, steel production is also one of the most carbon-intensive industries, accounting for about 7% of the global CO2 emissions [2]. In 2019, the steel sector emitted 2600 megatonnes of CO2, of which China contributed 1700 megatonnes, the European Union 200 megatonnes, and the United States 100 megatonnes [3]. Considerable effort is required of the steel sector to achieve the goals of the Paris Agreement and limit the global temperature rise to well below 2°C. This raises the question of how this polluting industry can decarbonize.

How to decarbonize the steel sector

Why is steel-making so polluting?

Coal is not only used for its energy content, but also used to remove the oxygen from the iron ore, which is the raw material for steel making.

The main reason why steelmaking is so polluting is that it relies on coal as both a fuel and as feedstock. Coal is a fossil fuel that emits large amounts of CO2 when burned. The energy that this releases is used to melt the iron ore. Coal is not only used for its energy content, but also used to remove the oxygen from the iron ore, which is the raw material for steel making. Iron ore is a mineral that contains iron in its oxidized form, iron dioxide, which is basically rust. This means that iron ore has reacted with oxygen and lost some of its metallic properties. To restore the iron to its pure form, which is needed for steel making, the oxygen has to be removed from the iron ore. This is done by using the carbon in coal to react with the iron ore and form carbon dioxide. This process is called reduction.

How is steel made using the conventional route?

The conventional route for steelmaking involves two main steps: producing pig iron from iron ore using a blast furnace, and refining the pig iron into steel using a basic oxygen furnace. A blast furnace is a type of metallurgical furnace that produces liquid metals by the reaction of a flow of air introduced under pressure into the bottom of the furnace with a mixture of metallic ore, coke, and flux fed into the top. Coke is a form of coal that has been processed to remove impurities and increase its carbon content. Flux is a substance, such as limestone, that helps to remove the impurities from the ore and form slag, which is a waste product that floats on the surface of the molten metal.

The furnace operates as follows: air that has been preheated to temperatures from 900 to 1,250 °C is blown into the furnace through multiple nozzles called tuyeres, located around the circumference of the furnace near the top of the hearth. The preheated air reacts vigorously with the preheated coke, resulting in both the formation of the reducing gas (carbon monoxide) that rises through the furnace and a very high temperature of about 1,650 °C that melts the iron ore. The molten iron and slag flow down to the hearth, where they are tapped from the bottom through a taphole and a slag hole, respectively. The slag is usually discarded or used for other purposes, such as road construction or cement production. The pig iron, which contains about 4% carbon and other impurities, is then transferred to a basic oxygen furnace, where it is refined into steel by blowing oxygen into the molten metal and removing the excess carbon and other elements. The steel is then cast into various shapes and sizes, depending on the desired product.

What are the alternatives to the conventional route?

The conventional route for steelmaking is not the only way to produce steel, but it is the most dominant one, accounting for about 70% of global steel production [5]. However, other methods can reduce the emissions and energy consumption of steelmaking.

One of the key areas where the industry can improve is in maximizing recycling. Today, only a limited amount of steel is recycled.

Electric arc furnaces (EAFs) can be used instead of blast furnaces and basic oxygen furnaces. EAFs use electricity to melt scrap steel or direct reduced iron (DRI), which is iron ore that has been reduced by natural gas or hydrogen, without melting. EAFs do not require coke or flux and emit less CO2 than the conventional route. However, they are limited by the availability and quality of scrap steel and DRI, and they still consume a lot of electricity, which may come from fossil fuels. 

One of the key areas where the industry can improve is in maximizing recycling. Today, only a limited amount of steel is recycled. According to the Bureau of International Recycling, an estimated 630 million tonnes of steel scrap are recycled every year [6]. This represents a significant opportunity for the industry to adopt a cradle-to-cradle philosophy, designing steel products with ease of recycling in mind.

Carbon capture and storage (CCS) or carbon capture and utilisation (CCU) can be used to prevent CO2 emissions from the conventional route from reaching the atmosphere. CCS involves capturing the CO2 from the flue gas of the blast furnace or the basic oxygen furnace, and storing it underground or in the ocean. CCU involves capturing the CO2 and using it for other purposes, such as making chemicals, fuels, or building materials. However, CCS and CCU are costly and complex, and they do not eliminate the need for coal or coke.

The only option to produce virgin steel sustainably is to use hydrogen to remove the oxygen from the iron ore instead of carbon.

However, it’s important to note that while carbon capture and storage (CCS) technologies can help reduce emissions, they are not a silver bullet. Studies show that it is challenging to capture 100% of emissions, with 90% already being quite difficult. Moreover, these technologies still require fossil fuels as input, which does not help the world break its fossil fuel addiction.

The only option to produce virgin steel sustainably is to use hydrogen to remove the oxygen from the iron ore instead of carbon. Hydrogen can react with iron ore and form water, which is harmless, instead of CO2. Hydrogen can be produced from renewable sources, such as electrolysis of water using solar or wind power. However, this also presents enormous challenges, hydrogen is expensive and requires a lot of infrastructure and investments in renewables. Furthermore, its use in blast furnaces is still in the experimental stage.

To give you an idea of the scale of this challenge, let’s consider the energy requirements for hydrogen-based steel production. You need 1.8 MWh of hydrogen and an additional 0.8 MWh of electricity for the melting process. This means that for every tonne of steel produced, we would need approximately 3.8 MWh of renewable energy (using an electrolyser efficiency of 70%). If Europe were to keep producing the same amount of steel, this would require an additional ~180 GW of renewables (assuming a capacity factor of 0.3). This is a significant amount and highlights the scale of the challenge facing the steel industry as it seeks to decarbonize.

Conclusion

The steel sector is a major contributor to global CO2 emissions, and it faces a huge challenge to decarbonize its production processes. The conventional route for steel making, which uses coal as both a fuel and a reducing agent, is the most widely used method, but it is also the most polluting one. Some alternatives can reduce the emissions and energy consumption of steel making, such as using electric arc furnaces, hydrogen, or carbon capture and storage or utilisation, but they have their own limitations and challenges. Therefore, there is no single solution to decarbonize the steel sector, but rather a combination of different technologies and strategies, along with policy support and market incentives, that can help the steel sector achieve a low-carbon transition.

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