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How far off is the steel industry from decarbonising?

How far off is the steel industry from decarbonising?
12 Mar
Pressure is mounting on steelmakers to decarbonise, but it’s proving to be a particularly difficult industry to clean up

Edit: This piece was originally published in the March edition of Geographical Magazine. Since then, the UK Government appears to have reversed its decision not to intervene in the development of the controversial Cumbria coal mine. Robert Jenrick, the secretary of state for housing, communities and local government, has decided to intervene in plans for the mine following “increased controversy” surrounding the application.

On 6 January 2021, environmental campaigners and local MPs voiced their fury at the UK government’s decision not to oppose the opening of a new coal mine in Cumbria. Given all the commitments made towards achieving net-zero carbon by 2050, the move seemed regressive. 

So why would the government allow the continued extraction of coal? The answer is steel. The Cumbria mine will see five million tonnes of coal removed per year from beneath the Irish Sea for steelmaking – an industry where decarbonisation is particularly difficult.

Steel is an alloy that consists mostly of iron. As iron occurs as iron oxides in the Earth’s crust, ore must be ‘reduced’ – an energy-intensive process traditionally carried out in blast furnaces using coking coal. Seventy-five per cent of steel production worldwide occurs using this method. Crucially, coking coal is very different to thermal coal, which is used to make the steam that generates electricity. While all thermal-coal-fired power generation in the UK will end by October 2025, coking coal isn’t covered by that commitment.

Steel factoryDue to the reliance on coking coal, steelmaking has proven a notoriously tricky industry to decarbonise

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Nevertheless, pressure to clean up the industry is mounting. Steel’s ubiquity (it provides frameworks for buildings, railways and roads; it makes up 63 per cent of our cars and 75 per cent of all appliances) means that the industry contributes around seven per cent of global carbon emissions.

Decarbonising the steel industry hinges on a few options. First, the energy efficiency of existing carbon-based iron reduction could be increased. Already, the energy required to make a tonne of crude steel has dropped by 40 per cent in the past 30 years due to efficiency improvements and access to recycled materials. New steel can be made by reducing iron with electricity and merging it with recycled steel – a manufacturing process termed the ‘electric arc furnace route’. Fortunately, steel is infinitely recyclable: in fact, it’s the most recycled material in the world.

However, steel made from recycled stock can’t meet all metallic requirements and there’s only so much scrap available. ‘As an industry, if we’re to comply with the Paris Agreement, we need to find a completely different way to make steel,’ says Andrew Purvis, director for safety, environment and technology at the World Steel Association.

A bolder option is hydrogen-based iron reduction. Hydrogen can be created by splitting water using electrolysis. Due to the way hydrogen reacts with iron oxide, it can then be used to reduce iron ore, producing only water vapour. At present, this is unlikely to be a totally emission-free process because most hydrogen is itself created using fossil fuels. ‘Green steel’ is contingent on scaling up ‘green hydrogen’ – currently a premium product made using renewable energy to power the electrolysis reaction that splits water.

Last year, Swedish steelmaker SSAB, in collaboration with iron-ore producer LKAB and utilities giant Vattenfall, opened a pilot plant for producing green-hydrogen-based steel in Luleå, Sweden. The so-called HYBRIT project is a flagbearer: ‘The idea behind HYBRIT is to show that a difficult industry to decarbonise can actually change,’ says Mia Widell, head of communications at SSAB. Scalability is its next challenge.

On the back of the pilot, the Swedish Energy Agency handed HYBRIT SEK 22 million to study the possibility of building a plant capable of industrialscale, green-steel production. It’s hoped that the plant will be up and running by 2025; SSAB hopes to be able to transition all of its coal-based blast-furnace production sites to the hydrogen-based process, and stop importing coking coal by 2045 – a transformation that will reduce Sweden’s CO2 emissions by ten per cent. However, given that SSAB holds less than one per cent of the global market share of steel production, the endeavour must be replicated 1,000-fold to curb global emissions. Here, Widell is hopeful: ‘We want to lead the development of the technology, share knowledge and show others that it’s possible to eliminate steel’s carbon footprint.’

Electric arc furnace methodThe electric arc furnace method of steelmaking in action. In the future, hydrogen-based steel could be rolled out at industrial scale: due to the way in which hydrogen reacts with iron oxide, it can be used to reduce iron ore, producing only water vapour.

SSAB is well positioned for fossilfuel- free steelmaking. Northern Sweden’s electricity is, in principle, from entirely renewable sources; Vattenfall’s hydropower and wind facilities generate the renewable energy needed to produce the hydrogen. The whole process can be carried out locally.

For steelmakers elsewhere, who would need to buy and import their hydrogen, the price remains prohibitively expensive – but this, too, could change. A new initiative called the Green Hydrogen Catapult will see industry leaders accelerate the scale and production of hydrogen 50-fold over the next six years, with a view to reaching a price point that would make it more viable for importers.

There’s even talk of steel becoming carbon negative through the use of bioenergy and carbon capture and storage. Trees and plants that have sucked carbon from the atmosphere during growth would be converted into charcoal and then burned to power the iron reduction. The carbon emissions would then be captured. But, for now, the main challenge remains financial. ‘It’s easy to get bogged down in the technology,’ says Purvis. ‘The challenge is that fossil-fuel-free steel will cost more. We’ll have to work out a way to create a market.’

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