Report: Path to CO2-Emissions-Free Steel Production Won't be Easy

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Researched by Industrial Info Resources (Sugar Land, Texas)--Global demand for steel is projected to increase by more than a third through 2050, and meeting that demand while reducing greenhouse gas emissions "poses immense challenges," according to a new International Energy Agency (IEA) report.

The global steelmaking sector is responsible for 8% of global final energy demand and 7% of total energy sector carbon dioxide (CO2) emissions, says the "Iron and Steel Technology Roadmap."

The report notes that sustaining projected steel demand growth while reducing emissions will be a big challenge, as economies grow, urbanize, consume more goods and build up infrastructure. Since 1970, global demand for steel has increased more than threefold and continues to rise as economies grow.

"Among heavy industries, the iron and steel sector ranks first when it comes to CO2 emissions, and second when it comes energy consumption," according to the report's executive summary. The iron and steel sector accounts for 2.6 gigatonnes of carbon dioxide emissions annually, and the sector is the largest industrial consumer of coal, which provides around 75% of its energy demand.

The COVID-19 pandemic led to an estimated 5% decline in global crude steel output in 2020, according to the report, but China's production was estimated to increase this year. The report estimates that global CO2 emissions will rise to 2.7 gigatonnes per year by 2050, unless measures are taken to reduce steel demand and overhaul existing steel mills.

"However, through innovation, low-carbon technology deployment and resource efficiency, iron and steel producers have a major opportunity to reduce energy consumption and greenhouse gas emissions, develop more sustainable products and enhance their competitiveness," according to the report. "To meet global energy and climate goals, steel sector emissions must fall by at least 50% by 2050, with continuing declines towards zero emissions being pursued thereafter."

Industrial Info is tracking $1.9 billion in steel sector projects that are tied to the reduction of CO2 emissions.

Click on the image at right for a graph showing steel CO2-emissions-reduction project activity by country.

In the U.S., there is only one active steel project aimed at reducing CO2 emissions: ArcelorMittal S.A.'s (NYSE:MT) (Luxemburg City, Luxemburg) planned carbon-capture system addition at the 5 million-ton-per-year Burns Harbor Steel Works in Indiana. The system would be capable of capturing 50% to 70% of CO2 emissions from blast furnace gas. Construction is planned to kick off this December, with completion in the first quarter of 2021. For more information, see Industrial Info's project report.

Last month, Cleveland-Cliffs Incorporated (NYSE:CLF) (Cleveland, Ohio) announced plans to acquire the operations of ArcelorMittal subsidiary ArcelorMittal USA LLC, including the Burns Harbor Works. For more information, see September 29, 2020, article - The Iron Giant: Cleveland-Cliffs Strives for Bigger, Better Things with ArcelorMittal USA Acquisition.

Europe has the lion's share of the CO2-reduction steel projects, as the European Union has set a goal of becoming "climate-neutral" by 2050, with an economy that has net-zero greenhouse gas emissions.

In Sweden, Hybrit Development AB, a joint venture by SSAB (Stockholm, Sweden), LKAB (Lulea, Sweden) and government-owned power company Vattenfall (Solna Municipality, Sweden), is constructing the Hybrit CO2 Free Steel Pilot Plant Addition at the Lulea Steel Works. Hybrit is developing new low-emission technology to produce CO2-free steel and eliminate the use of fossil fuels in the steelmaking process. Completion of the project is planned by the end of this year, with pilot trials to be conducted from the first quarter to the third quarter of 2021. For more information, see Industrial Info's project report.

Industrial Info is tracking $265 million in steelmaking project activity in which Power-to-X technology is listed as a key need. Power-to-X involves converting surplus electricity into other, storable forms of power such as hydrogen, which in turn can be used to make "green" steel or other products. At its Hamburg Steel Mill in Germany, ArcelorMittal plans to construct a hydrogen plant for the direct production of 100,000 tons per year of iron ore in the steel production process. Kickoff is planned for second-quarter 2021, with completion in second quarter 2022. For more information, see Industrial Info's project report. For related information, see October 9, 2020, article - Green Hydrogen Projects Grow in Popularity, but U.S. Yet to Jump on Bandwagon.

ArcelorMittal announced last month a group-wide commitment to become carbon neutral by 2050. "We are working on various pilot technologies which have excellent potential," said Aditya Mittal, president and chief financial officer. "In Hamburg, where we own and operate Europe's only DRI-EAF (direct reduced iron-electric arc furnace) facility, we will test not only the ability of hydrogen to reduce the iron-ore and form DRI, but also then test that carbon-free DRI in the EAF in the actual steel-making process."

The IEA report said new steelmaking processes "are critical, but there is no one right answer. Hydrogen, carbon capture, use and storage (CCUS), bioenergy and direct electrification all constitute avenues for achieving deep emission reductions in steelmaking, with multiple new process designs being explored today."

Hydrogen and CCUS together account for around one-quarter of the cumulative emission reductions in the IEA report's Sustainable Development Scenario.

The report added that new technology must be deployed at a "blistering pace, with new infrastructure to boot," including the rollout of one new hydrogen-based DRI plant per month and the deployment of a large CCUS installation (1 million metric tons of CO2 capture every year) every two to three weeks starting in 2030 in order to meet the report's Sustainable Development Scenario.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.