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World Steel Association releases paper on CO2 emission reduction

The eight-page report outlines the steel industry’s challenges and opportunities in reducing CO2 emissions in line with the Paris Agreement.

May 17, 2021

The Belgium-based World Steel Association has released a public policy paper on how the industry can reduce CO2 emissions output. The eight-page report focuses mitigating emissions from the production of iron and steel.

The association’s report highlights three steps the industry can take to ensure emission reductions: improved industry review standards, maximizing scrap use and applying new technology to reduce fossil fuel dependency. 

On average, every metric ton of steel produced led to 1.85 metric tons of CO2 released into the atmosphere in 2020. The same year, 1.86 billion metric tons of steel were produced, and total direct emissions were 2.6 billion metric tons, representing between 7 percent and 9 percent of global anthropogenic CO2 emissions, Worldsteel says.

“Steel production remains a CO2 -and energy-intensive activity,” the association says in a statement released May 17. “However, the steel industry is committed to continuing to reduce the footprint from its operations and the use of its products. There is no single solution to drastically reducing CO2 emissions from our industry, and we believe that individual countries are best placed to assess and implement policy and technical strategies to suit their particular circumstances.”

Worldsteel proposes the adoption of a process its board of members launched in 2019 called Step Up. The initiative is an industrywide efficiency review process based on leading practices focusing on key efficiency levers of raw material quality, energy efficiency, process yield and process reliability. The association says implementation of the Step Up methodology could reduce direct and indirect emissions by up to 20 percent at the average ore-based steelmaking site and by up to 50 percent at the average scrap-based facility.

The report also predicts that steel from China will begin to enter the market in the next decade. The association says that since steel plants double as recycling plants, the industry can significantly reduce its carbon footprint by recycling it. 

“Scrap plays a key role in reducing industry emissions and resource consumption,” the association says in the report. “Every [metric ton] of scrap used for steel production avoids the emission of 1.5 [metric tons] of carbon dioxide, and the consumption of 1.4 [metric tons] of iron ore, 740 kilograms of coal and 120 kilograms of limestone.”

Finally, the association says investing in new ways to produce low-carbon steel from iron ore will help reduce the industry’s carbon footprint. While a blast furnace is the primary way of reducing iron ore, it is nearing the efficiency limits of the reduction process. The report lists three other ways to achieve the drastic CO2 reductions needed:

  • using carbon as a reductant while preventing the emission of fossil CO2, for example using carbon capture, utilization and storage (CCUS) and/or sustainable biomass; 
  • substituting hydrogen9 for carbon as a reductant, generating water rather than CO2; and
  • using electrical energy through an electrolysis-based process.

“There is no single solution to low-carbon steelmaking, and a broad portfolio of technological options will be required to be deployed alone or in combination as local circumstances permit,” the report states. “In any given location, the choice of which breakthrough solution to deploy will be determined by the availability of resources and local policy support.”

Another thing the report notes is the high cost implications of using one of these three processes. The increase in expenses is attributed to increased operational costs, increased capital expenses and capital losses arising from potential early retirement or write-off of long-lived steelmaking assets. The International Energy Agency (IEA) estimates the increase in production cost to be between 10 percent and 50 percent compared with today, Worldsteel says.

“What is absolutely clear is that governments and other stakeholders will need to work with the steel industry to overcome the technological and economic challenges and create the market conditions necessary for the steel industry to transition to low-carbon steelmaking effectively,” says Edwin Basson, the director general of Worldsteel.

Åsa Ekdahl, the head of Environment and Climate Change for Worldsteel, is presenting the contents of the paper in a webinar May 19 at 9 a.m. called: “Climate Change and the Production of Iron and Steel: An Industry View.” Those interested can register here