Steel Demand Continues to Rise
The steel sector is responsible for around 10% of global CO2e emissions, which have doubled since 2000. The majority of these emissions come from the carbon-intensive coke oven, iron furnace, and steel furnace stages of production. While steel demand continues to rise, decarbonization remains a challenge due to high energy requirements and complex supply chains.
There is no single solution for decarbonization, but innovations such as green hydrogen-based direct reduction and iron ore electrolysis show promise. The pace of transition will depend on scaling these technologies, securing clean energy sources, and aligning policy incentives.
Download Decarbonizing Steel [link to the deck] to explore the latest technological advancements, investment needs, and regulatory frameworks shaping the industry’s future.
Four Key Points
Multiple technologies for producing lower-carbon steel are here. Hydrogen-powered steelmaking replaces the iron furnace with a direct-reduction reactor, releasing roughly 90% fewer carbon emissions than conventional processes. Iron ore electrolysis uses an electric current to drive a chemical reaction that produces iron, releasing up to ~97% less carbon than the blast furnace.
Steelmakers and sustainability advocates alike must be willing to embrace a ‘messy middle’ as the industry transitions to a decarbonized future. Steel production assets’ long lifespans before they are due for expensive upgrades and the sector’s massive energy requirements make the sector notoriously difficult to abate.
The world needs a consensus definition of green steel (and green iron).
A just transition for steel should include resources for educational and training programs and should include participation from local communities and workforces from the beginning.
“How do you build a just transition into all of this?” asked Columbia SIPA’s Bataille. “You’ve got to involve your communities and local workforces from the beginning and make them part of the solution-finding process.”
Bataille pointed to H2 Green Steel as an example. The startup was very involved from the beginning with local communities near where the new factory is to be built, he said, so there wasn’t a lot of backlash. He suggested that another way to consider community needs is to site any new plants on abandoned, clean brownfields whenever possible.
Decarbonizing Steel: Four Key Points from Industry Leaders
During a recent workshop at Columbia Business School, experts addressed the challenge of soaring emissions, highlighting the urgent need for a comprehensive transformation across the industry.
What Steel Decarbonization Needs
It is both technically possible and economically feasible to eliminate almost all the carbon dioxide from iron and steel production by mid-century, thus cleaning up an industry that accounts for 10 percent of global emissions. But progress will not happen without a concerted policy push.
Capture or cut carbon to make steel greener?
Iron ore + coal = iron + carbon dioxide. This chemical reaction, known long before the invention of the periodic table, is a key part of the steelmaking process and has helped build the modern world. But every tonne of iron generates more than two tonnes of CO₂, giving the iron and steel sector outsize importance in addressing climate change: it is responsible for one-tenth of global annual greenhouse gas emissions.
Stegra: Green Hydrogen Steel
How does a steel production plant become fully decarbonized? In February 2021, Dr. Maria Persson Gulda joined Harald Mix and Carl-Erik Lagercrantz to build the world’s first full-size, zero-carbon steel plant using green hydrogen, a venture that would be potentially the biggest transformation in the centuries-old steel industry has seen.
Decarbonizing voestalpine High-Performance Metal
Voestalpine, the Austria-based global leading steel manufacturing division of High Performance Metals, has made a bold commitment. It would achieve climate neutrality by 2050, with chief sustainability officer Philipp Horner leading the charge. Horner and his strategy team must review its entire manufacturing process to find opportunities for decarbonization, including learning about completely new methods for production and reevaluating its existing blast furnace technology.
Electra: Decarbonizing Steelmaking Through Carbon-free Iron
Electra Steel is Sandeep Nijhawan’s brainchild to decarbonize the process of making steel by creating green iron ore.The incumbent steel industry is a big offender when it comes to greenhouse gases, emitting about 2 tonnes of CO2 produced for every tonne of steel, and a major part of emissions-producing steel production hinges on the processing of iron, so Electra’s strategy is to address this part.