Exploring the Multifaceted Approach to Decarbonizing Steel

Contributed by: Ellie Gabel

Sustainability leaders in the industrial sector must pay attention to multiple pathways in decarbonizing steel. A single solution does not exist — sustainable operations require various tools, methodologies and shifts for sectors to become genuinely eco-conscious. A mixture of advocacy, technological integration and research creates a comprehensive outlook for success. Discover the techniques industry leaders employ to achieve ESG goals and green metrics.

The Carbon Impact of Steel
Steel is one of the most robust and vital materials in the industry, so it is necessary to understand why its widespread utilization encourages the climate crisis. Steel emitted 1.91 tons of carbon dioxide per ton in 2022, with a slightly lower overall energy intensity in gigajoules compared to 2021. 

Urbanization and industrialization make all sectors need more steel, putting a lot of pressure on an industry that needs to work on directing its behaviors and procedures to more carbon-friendly avenues. Stakeholders are vocalizing their desire for a decarbonized steel value chain, so progress is optimistic.

Eco-friendly steel is in demand because of customer desires and climate regulations. Investors notice the promise of ESG-driven companies, and funds will funnel into these places more readily in the coming years. Steel companies that are unable or unwilling to assess climate impact are at risk of decreasing value. Avoiding becoming irrelevant or defunct requires investing in these technologies.

Electrification
Taking fossil fuels out of steel manufacturing is vital to achieving more prominent climate goals. This objective requires a multipronged approach. First, companies must cut energy consumption. Then, corporations must transition to renewable energies and electrified fleets. 

More options exist besides solar power, including wind, geothermal and hydrogen sources. Many options are becoming more economical and efficient, producing more energy at cheaper prices than ever in history. Electrification also extends into the workforce, as assets like robotic welders and autonomous vehicles provide productivity and material waste enhancements to reduce climate impact further.

LISTEN: Episode 5: Navigating the Regulatory Landscape with IOGP Europe

Furnace Upgrades
Several decarbonization tactics require reimagining classic steel production technology. Blast and basic oxygen furnaces are essential to evaluate because they need coal. Transitioning to a hydrogen-fueled alternative could remove coal from the equation, though many industry experts are using a mix of iron and coal to mitigate fossil fuel use. 

If steelmakers want to remove BFs and BOFs entirely, they may look toward electric arc furnaces that do not require coal. Instead, they use scrap metal as the feedstock, which omits fossil fuels and reduces energy expenditure in the steelmaking process. Biomass is another promising reductant alternative, primarily in places with high biomass availability. 

Advancing Industrial Policy
Steelmakers only hope to become sustainable by advocating for relevant legislation and standards. Manufacturers should be discouraged by policy to use fossil fuel-based operations, which empowers investors to place funds in carbon-friendly technologies more fearlessly. Novel practices in steel production have not been this revolutionary in a long time. Therefore, thought leaders need assurance from regulators their money is in the right place.

For example, Sweden is receiving a lot of attention right now for breaking ground on the first hydrogen-powered steel plant in Boden. EU backing and preexisting support for other forms of renewable energy drove prices down to accessible levels, allowing the plant to flourish. This model should inspire companies internationally to work with policymakers and find ways to subsidize and support fossil-free steel.

Carbon Capture 
Steel’s 8% total carbon emissions could be captured and reused for other purposes to embrace circular economic ideals. The methods are not widely used or accessible at industry scales yet. Denser utilization and curiosity will add to a currently inadequate body of research to unveil carbon capture’s economic viability.

One technology takes carbon dioxide produced by blast furnaces and transforms it into bioethanol for heating and electricity. Other integration options for furnaces include:

• Calcium looping
• Chemical absorption
• Ammoniac creation
• Physical absorption
• Sorption enhanced water gas shift
• Oxy-blast furnaces

Multiple Solutions for a Complex Problem
Steel is too essential for societal and developmental progress to phase out entirely. This is why humanity must get creative in finding ways to make it eco-friendly. Multifaceted approaches set a precedent for similar industries that must realize collaboration, research and experimentation are the keys to climate progress.

READ: Driving Decarbonization in the Energy Sector: A JPMorgan Chase Perspective

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References:
Sustainability Indicators 2023 report: https://worldsteel.org/steel-topics/sustainability/sustainability-indicators-2023-report/
Decarbonising the steel industry: Reasons to be cheerful: https://www.openaccessgovernment.org/article/decarbonising-the-steel-industry-reasons-to-be-cheerful/171719/
Decarbonization challenge for steel: https://www.mckinsey.com/industries/metals-and-mining/our-insights/decarbonization-challenge-for-steel
A Beginner’s Guide to the Benefits of Robotic Welding: https://www.lindedirect.com/blogs/industrial-guides/industrial-guides/2023/01/24/a-beginner-s-guide-to-robotic-welding
How steelmaking may go carbon-free—by dropping its addiction to coal: https://thebulletin.org/2021/02/how-steelmaking-may-go-carbon-free-by-dropping-its-addiction-to-coal/#:~:text=In%20steelmaking%2C%20hydrogen%20sets%20off,coal%20in%20the%20blast%20furnace.
Sweden's H2 Green Steel raises $1.6 billion for Boden plant: https://www.reuters.com/business/finance/swedens-h2-green-steel-raises-16-bln-private-placement-2023-09-07/
Carbon Capture, Utilisation and Storage for the Steel Industry: https://www.carbonclean.com/blog/steel-carbon-capture
Integration of carbon capture technologies in blast furnace based steel making: https://www.sciencedirect.com/science/article/pii/S0016236122038984