The iron- and steelmaking operations are a considerable contributor to the world’s CO2 emissions, corresponding to 6-7% of the global total. The blast furnace (BF) ironmaking process is the dominating emitter in the integrated steelmaking route where the coking coal is added to reduce the oxide iron ore while forming metallic iron and CO2.
Meeting the Paris agreement targets and thus slowing down climate change requires the CO2 emissions into the atmosphere to stop. Governmental roadmaps, long-term commitments, and a greener orientation within many business areas have now started to pressure the industry to change.
Consequently, considerable efforts are currently underway to find alternative methods for converting iron ore to iron. This will transform the integrated steelmaking route and impact the scrap-based operators to expect significant changes in the steel scrap and electrical energy markets.
A future where the steelmaking industry is fossil-free would have transformed every existing producer, some more than others.
Hydrogen is the most likely way forward
Several options for iron- and steelmaking decarbonisation are possible: increasing the processing efficiency and level of recycling of steel, carbon capture and storage, molten oxide electrolysis, and Hydrogen. Hydrogen as a solution to decarbonize industry has been receiving increasing amounts of attention and is the most likely way forward.
Using Hydrogen as the primary reduction agent means that existing BF-based production (using coking coal and producing liquid pig iron) is replaced by direct reduction (DR) production (using Hydrogen producing solid direct reduced iron (DRI).
The transformation from the BF to the DR production route decouples the ironmaking from the downstream steelmaking production. The production becomes less integrated, which opens for production and location flexibility not before possible but also shifts focus to iron-based feedstock value-chain.
Opportunities and challenges rising with a flexible iron feedstock
The shift from BF to DR production routes puts iron feedstock in the limelight. The (possibly) disconnected DR route, where melting the DRI in an electric arc furnace (EAF) located elsewhere, opens for more flexible use and sourcing of iron-based feedstock including internal scrap, primary scrap, merchant scrap, pig iron, and DRI.
In general terms, the future steelmaker concerned about the iron-based feedstock should:
- prepare to adapt to a more volatile metallic feedstock
- expect that changes to a (DR-)EAF process routes among steelmakers are likely to cause a more intense scrap consumption
- expect that new dedicated iron production facilities (DRI production) will be established in regions with renewable electricity in abundance
- expect that the metallic iron feedstock supply-chain will span across the globe
These changes will transform the scrap market and producers will need to put focus on the iron feedstock availability to ensure supply.
Explore the low-Carbon processing opportunities with reason
The demand for fossil-free steel surges and several countries have already pledged that they will procure low-Carbon steel if available. In addition, the recent trade deal between the US and EU is planned to include a mechanism that will favor materials with low CO2 emissions, and major steel consumers, such as car manufacturers, have made statements that they intend to use fossil-free steel when available on the market.
In the future, fossil-free production scenario Carbon will be used to a minimum. In principle, this also limits specific process operations in the EAF, which have serious implications on refining and process efficiency. These are potential showstoppers to reach a true fossil-free production, but from a CO2 mitigation point-of-view it is of less importance given that main CO2 release points (iron ore reduction) are eliminated.
The Jury is still out on how to define “fossil-free steel”, but it is likely that there will be room for some use of Carbon in the hard-to-abate processing steps.
Time is now to evaluate the future options and formulate a transition plan to meet the future requirements and avoid being forced into transformation.
If you want to know more about how you can take control and reframe the future based on your most viable scenarios going forward you can download our guide- “Iron- and steelmaking decarbonisation – reframing the future in steelmaking”
Download the full guide by filling in the form below.