Podcast Summary
Steel industry decarbonization: The steel industry, responsible for 8% of global greenhouse gas emissions, is exploring potential solutions like hydrogen, direct electrification, and improved recycling to reduce its carbon footprint.
The global steel industry, which produces over 2.6 billion tons per year, is a significant contributor to greenhouse gas emissions, accounting for around 8% of total emissions. While steel is highly recycled, with around 85% of end-of-life steel being collected and recycled, the majority of new steel is still produced from iron ore, which is a more energy-intensive process. Despite the high recycling rate, economic growth drives the demand for new steel production. The conversation with Rebecca Dell, industry program director at ClimateWorks, explores potential solutions for decarbonizing the steel industry, including using hydrogen, direct electrification, and improved recycling. Kraken and ANSA offer innovative solutions for utilities and solar buyers, respectively, to support the transition to a greener world.
Steel production emissions: Steel production is driven by a growing economy, but the demand for new steel is expected to remain high due to long product lifespan. Blast furnace process, responsible for most emissions, uses coal, while DRI process using hydrogen could be a decarbonization solution, but focus should be on reducing blast furnace emissions first.
Excess steel production is largely driven by a growing global economy, and the demand for steel tends to saturate once a country becomes wealthy. Recycling is already a significant part of the steel industry, but the demand for new steel is expected to remain high for a long time due to the long lifespan of steel products. The iron making process, which is responsible for most of the greenhouse gas emissions in steel production, relies heavily on coal as a feedstock. Approximately 90% of new steel is produced using the blast furnace process, which involves burning coal to remove oxygen from iron ore and produce metallic iron, resulting in significant CO2 emissions. The DRI process, which represents a smaller portion of new steel production, uses hydrogen as a reducing agent instead of coal and could potentially be a decarbonization solution. However, the focus should be on decarbonizing the blast furnace process rather than relying solely on DRI.
DRI production processes: DRI, a smaller player in the iron and steel industry, uses gaseous fuels and results in significant emissions savings but relies on methane, while hydrogen DRI is a promising pathway to fully decarbonized steelmaking with challenges in achieving 100% hydrogen usage and cost concerns.
DRI, or direct reduced iron, is a smaller but significant player in the global iron and steel industry, accounting for less than 10% of production. This process uses a shaft furnace instead of a blast furnace and relies on gaseous fuels like methane for the chemical reaction. While methane DRI can result in significant emissions savings compared to coal-based blast furnaces, producing under one ton of CO2 per ton of steel, the industry's reliance on this process is largely economic, with many regions relying on coal for its affordability. The most promising pathway for fully decarbonized steelmaking is hydrogen DRI, which involves using hydrogen instead of methane in the furnace. This is considered a small increment of new technology since the DRI process is already commercial, and existing furnaces can handle up to 70% hydrogen. However, there are technical challenges to achieving 100% hydrogen usage, including maintaining furnace temperature and ensuring full metalization. Despite these challenges, industry experts believe hydrogen DRI is a viable solution, with the primary concerns being the availability and cost of hydrogen.
Decarbonizing steel production: Challenges include quality of iron ore for hydrogen DRI and cost of upgrading it, while direct electrification requires significant electricity and mature technologies for commercial deployment. Affordability is key and maintaining cost-effectiveness is crucial.
The transition to decarbonized steel production through hydrogen DRI involves challenges, particularly with the quality of iron ore required and the cost of upgrading it. Another decarbonized pathway is direct electrification, which is more technologically advanced and requires significant amounts of electricity. Directly electrifying the iron making process could save energy and reduce costs, but the challenge lies in sourcing the large amounts of electricity needed. Direct electrification technologies like molten oxide electrolysis and aqueous electrolysis are not yet mature enough for commercial deployment. Steel's affordability is a crucial factor, and retaining its low cost in a decarbonized future is essential. The steel industry is exploring various solutions to decarbonize while maintaining cost-effectiveness.
Direct electrification, CCS challenges: Direct electrification for steel production has potential but faces engineering challenges at commercial scale. CCS in steel production has theoretical appeal but faces practical challenges due to CO2 distribution and retrofitting costs.
While there are promising alternatives to traditional hydrogen DRI and decarbonized steel production through CCS, the viability of these approaches depends on their ability to overcome significant challenges. Direct electrification, for instance, has the potential to use lower-grade ores and have a wider variety of applications, but its engineering fundamentals are still being tested at a commercial scale. Boston Metal, a leading company in this field, is close to commercial deployment but still faces hurdles in scaling up and transitioning from using carbon anodes to their developing inert anodes. CCS in steel production, on the other hand, has theoretical appeal but faces significant practical challenges due to the distribution of CO2 sources and the high costs of retrofitting existing processes to capture and store CO2 effectively. Despite the potential benefits, both direct electrification and CCS are facing significant obstacles in achieving large-scale commercial deployment.
Steel Decarbonization: Government-driven steel production in China contrasts with private companies' efforts towards decarbonization through hydrogen DRI projects in US, Europe, and other countries. Material substitution and efficiency offer significant opportunities for decarbonization beyond hydrogen DRI.
While half of the world's steel is produced in China by state-owned enterprises, driven by government policy, the largest private steel companies like ArcelorMittal and US Steel in the US, Europe, and other countries are exploring decarbonization through large-scale hydrogen DRI projects. These projects, including those in Sweden, Germany, and the US, aim to reduce carbon emissions in the steel industry. However, material substitution or efficiency, such as using less steel or longer-lasting buildings, may offer more significant opportunities for decarbonization than material substitution alone. While mass timber is an area of potential material substitution for steel, its limitations include the availability of trees and the need for careful consideration to avoid deforestation. Overall, the steel industry's decarbonization journey is ongoing, with various players exploring different paths to reduce emissions.
Decarbonizing steel: Focusing on decarbonizing steel instead of replacing it entirely is a more feasible solution for reducing carbon emissions at a large scale in various industries.
Despite the high manufacturing costs and energy requirements, steel remains a dominant material in various industries due to its affordability and widespread availability. Aluminum, the closest alternative, is lighter but significantly more expensive. Decarbonizing steel, rather than replacing it entirely, seems to be a more feasible solution for reducing carbon emissions at a large scale. Rebecca Dell, the director of the industry program at the Climate Works Foundation, emphasized this point during her conversation with Shale Khan on Catalyst. While other materials may appear attractive, their feasibility for mass production at the scale of hundreds of millions or even billions of tons a year is limited. Therefore, the focus should be on decarbonizing steel to make it a more sustainable option for industries.