Sees Potential in Alternative Feedstocks Vital to Boosting Green Steel Production

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Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--As steelmaking is generally classified as a hard-to-decarbonize industry, it is estimated that approximately 70-80% of its greenhouse gas (GHG) emissions arise from the use of coke or coal in blast furnaces. In a recent webinar entitled "What's Next for Green Steelmaking Technologies?" research firm Wood MacKenzie (WoodMac) experts Daniel Carvalho and Miller Wang outlined what they see as the options for decarbonization.

Under current GHG reduction commitments by steelmakers, WoodMac sees carbon dioxide (CO2) emissions dropping about 32% by 2050--a far cry from the 94% needed to reach the firm's AET-1.5 goals. AET-1.5 is WoodMac's revision of its accelerated energy transition scenario, "in which the rise in global temperatures since pre-industrial times is limited to 1.5 C by the end of this century and we reach net zero (carbon emissions) by 2050." It shows the amount of change needed in energy use to meet the Paris Agreement goals.

One of the challenges in reducing steel emissions is that demand for the metal is projected to continue its upswing through at least 2050, so decreases in GHG emissions will have to exceed the growth in production.

The biggest obstacle, said Carvalho, is that "current commercially viable technologies may require significant technological advancements if steelmaking is to play its part in meeting net-zero targets."

Current Procedures
Today's most common steelmaking procedure is the blast furnace-basic oxygen furnace (BF-BOF), Carvalho noted. Its advantages are its low cost and its ability to handle a variety of iron ore quality levels. It is also difficult to decarbonize because of its reliance on coal and coke, which are among the biggest emitters of CO2. Natural gas can also be used, but its growth is slow.

Future Options
According to WoodMac, the current number one contender for a green replacement is the electric arc furnace (EAF). Its implementation is expanding and is expected to catch up with BF-BOF production levels by 2050.

There are limitations, however. Utilizing primarily scrap metal as feedstock, EAF systems can cut emissions by up to 80%, says the report, but they do not directly use iron ore inputs. That means they're competing for what is a limited global supply of scrap. So to make real headway in GHG reduction, other technologies must be developed.

Other Promising Green-Steel Options
Carvalho sees two other main technologies with promise: combining green hydrogen with direct reduced iron (DRI), and electric smelting furnace-basic oxygen furnace (ESF-BOF). Metallics.org defines DRI as being "the product of the direct reduction of iron ore in the solid state by carbon monoxide and hydrogen derived from natural gas or coal."

The first option involves replacing coal/coke or natural gas with green-produced hydrogen as the fuel. Carvalho calls this "the route closest to carbon neutrality." Because of its green footprint, WoodMac sees DRI's share in the mix as more than doubling by 2050. The transition will be gradual, however, and will depend on an increasing supply of green hydrogen, which is currently less than 5% of all hydrogen produced.

For the second option, it's necessary to distinguish EAF from ESF. WoodMac explains, "The initial ESF process utilizes electricity, instead of coal/coke, as fuel like an EAF, but unlike the EAF process it can accept DRI produced with low- and medium-grade iron ores as a feedstock. ESF-produced liquid hot metal can then be processed into steel in a traditional basic oxygen furnace."

The beauty of ESF is that it can become an ESF-BOF combination. It can potentially be rolled out at BF-BOF facilities using existing BOF footprints, "helping to reduce blast furnace use and cut emissions while reducing capex, operational complexity, and project execution time."

Counting the Cost
As with all energy transition plans, there is a cost, and it's not just in plant construction and conversion. WoodMac believes carbon pricing may be the key factor in making green options affordable. "Without rigorous carbon pricing, traditional BF-BOF is likely to remain the lowest-cost route for steel production across most global regions," the report states.

Fuel costs also come into play. Hydrogen DRI is about 30% more costly than the gas-fired version. WoodMac sees some room for improvement in efficiencies and procedures as they are developed, but again, "significant green incentives and stringent carbon tax policies will be essential for further cost mitigation."

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).