The majority of items we use every day have one common material, Steel. It has been the foundation of the industrial economy and continues to be a key input in almost all construction, engineering, and manufactured goods. In recent times it has been oil and coal which have been under pressure to change, but as the climate crisis has now taken centre on the global stage, scrutiny of the steel industry is heating up.
Across the world, the dominant method in smelting iron injects vast quantities of carbon dioxide into the atmosphere. It is one of the main contributors of man-made global warming. There are two main factors that cause steel production to be highly emissions intensive. The power generation needed is immense, with an average of 770 kWh per tonne. Secondly, the sector is the largest industrial producer of carbon dioxide emissions and accounts for 7-9% of all direct emissions (which is larger than India).
The steel industry plays a pivotal part in achieving global climate and energy goals. Meeting these goals will require steel industry emissions to fall by at least half by 2050. Many of the largest steelmakers have announced targets to achieve “net zero” emissions. This will take not only switching to renewable resources but the implementation of turning conceptual processes into an industrial reality. The global trend to net zero emissions has seen deployment of renewable energy technology and the removal of some fossil fuels. However, emissions intense industries (steel, cement and petrochemicals) are now under the spotlight to decarbonise.
Difficulties Facing the Metals Industry
It is increasingly challenging overhauling an entire industry, especially one which has been using a similar smelting process for decades. Steel is already one of the most recycled materials and as we have established, simply reusing this material does not combat the scale of change required to meet a net zero target.
The production of steel is exceedingly carbon intensive due to the method of extracting iron from its ore. A process which involves large blast furnaces heated to over 1,000c and loaded with coke, lime and minerals. This removing the oxygen molecules from the iron oxide to create iron. As a result, it leaves behind a significant amount of CO2. A core material named coke, is the lowest cost energy carrier to catalyse the steelmaking process and therefore difficult to commercially substitute, and unfortunately it is carbon based.
Aside from the industry producing around 2 billion tonnes of CO2 annually. Being an immensely capital-intensive industry, the level of fresh investment could run into billions of dollars to shift to less carbon intensive processes. It is difficult given the constant volatility in oversupply and profitability in the sector. China’s pledge to be carbon neutral by 2060 will be a great challenge. As a source of half the global steel supply, the vast scale of China’s steel sector also equates for a third of the country’s industrial emissions. It is clear to see that major upgrades are required to reach its 2060 goal. The inefficiencies in the Chinese steel sector are already clear, given Chinese steel generates 2 tonnes of CO2 per tonne, which is double European steel’s 1 tonne of CO2 per tonne. These inefficiencies are common in steel production outside the more regulated and carbon focussed markets such as Europe.
Changes Today for Net Zero Metals
Electric Arc Furnaces (EAF) are not a new phenomenon and are utilised to melt down scrap metals. These are highly applicable due to the high levels of recycling in the steel industry. This saves the use of blast furnaces when recycling steel, so they can then mainly be used for new steel production. The use of EAF in simply melting scrap rather than smelting raw materials allows more flexible production with a fraction of the CO2 when compared to blast furnace production. Unfortunately, the quality of output of EAF does not always meet the required specification for certain uses (e.g. automotive). Currently EAF accounts for less than 30% of steel production globally, which is a noticeably lower capacity than the recycling rate of steel. Increasing the application of EAF would go some way in abolishing the sectors emissions intensity.
The cost and application of renewable energy solutions has been a strong driver behind lowering the emissions intensity in metals production. Across the value chain the use of renewables can offer a reduction emissions from electricity consumption and significant cost savings. The benefit of renewable technologies is the ability to scale the application to be used for powering a small single furnace to significantly large steel production facilities.
An example of this is the launch of the $285m Bighorn Solar array in Colorado. With 750,000 panels powering the 90% of the energy required by the steel mill, including the Electric Arc Furnace that melts more than 1 million tonnes of scrap metal per year. The production facility faced increased cost pressures but as a result of securing the low cost of electricity at $0.03/kWh for 20 years, the plants economic viability was reinvigorated. This is a strong example of the green transition achieving both increased economic benefits (saving 1,000 jobs and adding 300 more with the plants planned expansion) and moving towards a net zero metals production target.
The use of hydrogen as a reagent in place of coal to reduce iron ore to pig iron, eliminates the CO2 emissions from the same process used in a blast furnace. The process however also must include a EAF to reduce the iron for further processing. The conundrum is the electricity required to reduce the iron ore, which is equal to 2.6 MWh compared to coal reduction which requires 0.8 MWh per tonne. Subsequently comparing the production using both methods, the electricity demanded by the hydrogen process creates similar CO2 emissions as a traditional blast furnace. A further hurdle is that the hydrogen reduction method has a cost 20-30% higher than the conventional method. However, when solar PV or wind can be applied to conduct the electrolysis required for hydrogen production, this would negate the emissions intensity of hydrogen reduced iron.
Upcoming Technology for Commercialisation
Molten Oxide Electrolysis (MOE) takes metals in its raw oxide form and transforms this into molten metal products. Electrons are used to melt the inputs and selectively reduce the target oxide. The purified metal collects at the bottom of a cell and is tapped by drilling into the cell using a process adapted from a blast furnace. The tap hole is plugged and the process then continues. It is likely to be largely scalable across multiple alloys, allowing for increased production capacity. Boston Metal’s hope by 2025 the technology can be commercialised.
Heliogen is a small clean-energy company in California. It has developed an array of solar mirrors capable of concentrating sunlight in order to build enough heat to reach temperatures exceeding 1,000c. The technology has the potential to be integrated into industrial processes like Steel/Cement production. If this is possible the solar thermal technology might help reduce emissions intensity from processes requiring immense industrial scale heat.
Thermal Energy Storage has also emerged as a new way to provide low-cost energy storage on combined heat & power (CHP) principles, and help in decarbonising the production of the steel value chain. There are a handful of thermal storage players, all with their own technology and preferred applications. However nearly all of them fail in storing heat at very high temperature for a long period of time (hence it is a valuable application for steel or chemical industries in using carbon free heat). Berlin-based Lumenion GmbH is one of the few players able to decarbonise heat and power across most industries (including steel and steel manufacturing). Lumenion created a unique technology with the ability to store heat up to 650c and therefore provide energy output as either heat or electricity. The technology developed by Lumenion is an alternative to battery storage and has other industrial purposes given its ability to store carbon free heat. It is being explored whether the Thermal Energy Storage technology can be used in tandem with an EAF in an effort to achieve peak heat for processing metals.
Climate change continues to rise to the top of the global political agenda, with many governments committing to ambitious environmental targets. There is a race against time to develop low-carbon versions of this strong and versatile material which accounts for up to 9% of global emissions. Achievement of this will take Market Intervention, such as differentiated products (e.g. low-carbon steel markets); Policy Intervention, such as support and penalisation mechanisms (e.g. Carbon Trading Schemes); and Financial Intervention, such as investor pressures and R&D support.
As laid out in this article there is much hope for such change in the steel industry, if supported with appropriate funding and policy. It is vital for new technologies to attract backing in their path to being commercially viable, and it is for both private and public stakeholders to act in looking to achieve a net zero metals industry.
Sources and Further Reading