Transforming our Future: Decarbonizing Steel

It’s essential that we quickly decarbonize highly intensive industries like concrete and steel. Fortunately, advances in processing technology and renewable energy are reducing steel’s carbon emissions. 

Steel is one of the most consumptive industries in our entire economy, pumping out nearly 7% of annual global carbon emissions and guzzling approximately 8% of total global energy.

According to the World Steel Association, buildings and infrastructure are the top users of steel, comprising about 55% of total demand. The automotive industry is second, weighing in at about 12%.

Steel is made by alloying carbon and iron together (stainless steel also requires other inputs like chromium)—a process that requires massive amounts of heat up to 1,600° C.

Scrap steel is often used in the process, with the addition of some new iron to achieve the right chemical blend that yields the desired end-product (the blend is typically about 75% scrap steel to 25% new steel.)

Fortunately, advances in processing technology called electric arc furnaces (EAFs) are enabling the steel industry to reach the high temperatures needed using renewable energy rather than fossil fuels, thereby reducing the carbon emissions. 

When EAFs are used, the carbon emissions of steel production is estimated to be about .4 tons of CO2 per ton of steel—a number that will continue to drop with continued improvements in renewable energy, increases in grid efficiency, and electrification of transportation.

Iron is also necessary to make steel. Interestingly, iron (Fe), doesn’t exist for long in nature because it quickly bonds with oxygen, which creates rust, losing electrons in the process. Eliminating oxidation and restoring the lost electrons requires a process called reduction. Blast furnaces and open-hearth furnaces are often used for reduction, both of which burn colossal amounts of coal or natural gas to create temperatures of up to 1,500° C and generate a tremendous amount of carbon emissions—producing up to 1.7 tons of CO2 for every ton of iron. 

However, when iron is reduced through a process called Direct Reduction of Iron (DRI), in which natural gas is turned into a synthetic gas at a lower temperature (1,000° C), emissions are reduced to about 1 ton of CO2 per ton of iron. This type of reduction process can be further decarbonized by adding more clean hydrogen to the syngas mix, and when renewable energy is used rather than natural gas, emissions can be decreased even further to about .8 tons of CO2 per ton of steel.

Exploding Demand for Steel

The massive amount of carbon emissions from the steel sector isn’t only attributable to the highly intensive production process—exponential demand has also played a role. 

Historically, Japan and the U.S. were the largest consumers of steel. However, China’s mammoth buildout over the past three decades of vast cities and massive infrastructure projects like high-speed rail systems and hydroelectric projects have driven up demand for steel by an order of magnitude.  

India is now the second largest producer of steel behind China, although it is like Sham chasing Secretariat—China manufactures nearly 10 times as much steel as India on an annual basis, and it currently makes more steel than the rest of the world combined. Source: World Steel Association

And while China is reaching the end of its colossal growth spurt, the country has plans to construct more blast furnace steel plants powered by dirty coal, according to the Global Energy Monitor report. Source: World Steel Association

Steel production has increased by an order of magnitude since 1950, primarily because the industrialization of countries like the U.S., Japan, China, and India.

While Japan and the U.S. used to be the largest producers of steel, China now manufacturers more steel than the rest of the world combined. 

Steel Growth Silver Lining

If there is any silver lining in the hockey stick growth trajectory of steel, it’s that there is a lot of it out there that can be reused. The World Steel Association points to hundreds of billions of tons of scrap steel that can be repurposed using electrified, renewable energy-powered mills. 

The U.S. has been producing about 70% of its steel from scrap for about two decades, so there isn’t any concern that the use of scrap steel will result in inferior end-products.

Also, the processes for making new steel are improving through the use of electric arc furnaces and direct reduction of iron ore, both of which have much lower carbon emissions than conventional processes.

Advancements like Hydrogen Breakthrough Ironmaking Technology (HYBRIT) are also dramatically decreasing the carbon footprint of steel by using biomethane and green hydrogen (produced with solar and wind power) to produce zero-carbon iron.

No doubt, the long road ahead to reach carbon-neutral steel will require major technology innovation, investment, and policy change, but, clearly, the journey to decarbonize the steel industry has begun.  

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