Steel Decarbonization Technologies
Several emerging deep decarbonization steelmaking technologies now exist: Green hydrogen DRI-EAF, Iron ore electrolysis and Carbon Capture, Utilization and Storage (CCUS).
The global steel sector is responsible for approximately 6% of global CO2e emissions
Steel is currently produced through three main production routes that all emit CO2:
On average BF-BOF is the cheapest production method ($390 vs. $415 for Scrap EAF and $455 for NG DRI-EAF). However, regional variations in costs (such as raw material and fuel) make all three methods competitive
CKI Team analysis: Credit Mimi Khawsam-ang, Max de Boer, Grace Frascati & Gernot Wagner (18 December 2023); share/adapt with attribution. Contact: [email protected]
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Source: Scope 1 emissions from Rhodium Group ClimateDeck (September 2023); Scope 2 iron & steel estimate from IEA (2023) Credit: Mimi Khawsam-ang, Max de Boer, Grace Frascati & Gernot Wagner (18 December 2023); share/adapt with attribution. Contact: [email protected]
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Iron ore, coke, and limestone produce pure iron in a blast furnace, which is turned into steel in an oxygen furnace
Scrap metal is melted in an electric arc furnace using electrical energy
Iron ore is turned into iron using natural gas, which is then melted in an electric arc furnace to produce steel
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Several emerging deep decarbonization steelmaking technologies now exist: Green hydrogen DRI-EAF, Iron ore electrolysis and Carbon Capture, Utilization and Storage (CCUS).
IEA expects technology transition to take off after 2030, and CCUS to play the biggest role in 2050 of all green steel technologies.
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.
BAU | Business as usual | H2O | Water |
BF-BOF | Blast Furnace-Basic Oxygen Furnace | IEA | International Energy Agency |
CAPEX | Capital expenditure(s) | HRC | Hot Rolled Coil (type of finished steel product) |
CCUS | Carbon capture, utilization & storage | MPP | Mission Possible Partnership – industry decarbonization coalition |
CO | Carbon monoxide | MOE | Molten oxide electrolysis |
CO2 | Carbon dioxide | NG | Natural gas |
CO2e | CO2 equivalent, using global warming potential as conversion factor | NAFTA | North American Free-Trade Agreement |
DAC | Direct Air Capture | NG | Natural gas |
DRI-EAF | Direct Reduced Iron-Electric Arc Furnace production process | NG DRI-EAF | DRI-EAF production process using natural gas |
EAF | Electric Arc Furnace | NZE | Net Zero Emissions |
EBITDA | Earnings before interest, taxes, depreciation, and amortization | O2 | Oxygen |
EW-EAF | Electrowinning-Electric Arc Furnace | OECD | The Organization for Economic Cooperation and Development |
Gt | Gigatonne, equal to 1 billion metric tonnes | OPEX | Operational expenditure(s) |
H2 | Hydrogen | SR-BOF | Smelting Reduction-Basic Oxygen Furnace |