Green Steel technology: Now is the time to accelerate decarbonization

Currently the net-zero pledges of countries, cities, businesses, and other institutions fall short of what is required. This puts extra pressure on the biggest emitters: countries and industry sectors. The iron and steel industry are significant emitters of CO_2, accounting for about 8% of the global CO₂ emissions. The total CO₂ emissions from the steel sector have risen since 2015, before stabilizing in 2019. The direct CO₂ emissions intensity of steel production has been broadly flat since 2015. Both should fall by 3% each year, to be on track for net zero by mid-century.

Steel is a vital material required to meet the social and economic needs of society. As societies develop and populations grow, they invest in infrastructure that increases the demand for steel. Steel production peaked in 2021 but then slightly declined due to the perturbations in the Chinese construction industry. As a result, a flat growth rate can be expected in the near future. However, in the longer term, the megatrends are pushing an increase in steel production. In 2023, steel production was 1900 million tons, and it is forecasted to be between 2000-2500 million tons in the long term.

Steel production is on the rise, and a considerable number of high-emission blast furnaces are coming on-line. As a result, the sector’s CO₂ emissions are increasing, and the net-zero trajectory seems unattainable. The project pipeline for primary near-zero emission projects has increased to 13 Mt and the amount of near-zero-capable primary plants has increased to 58 Mt. However, the latest analysis suggests that over 100 Mt of near-zero emissions ironmaking production is required by 2030, representing a gap of 50 Mt, assuming that all capable projects move to near-zero emissions in the near future.

The steel sector is under growing scrutiny from societies, funders, customers, and the public who have committed reducing emissions. Similarly, iron ore mining companies have mobilized to reduce their Scope 3 emissions, which requires the steel industry to lower its emissions. This generates momentum for the industry to decarbonize. Governments need to help by implementing different policies to accelerate the transition: create a market for near-zero emissions steel, support demonstration of near-zero emissions steelmaking technologies, as well as facilitate the development of supporting infrastructure and track the progress and improve the data collection.

The steel industry has identified three separate ways to reduce CO₂ emissions: efficiency improvements in steel making, increasing the use of scrap in production, and break-through process innovations. These approaches have different impacts and varying maturity.

Efficiency improvements

Efficiency improvements include raw material quality, energy efficiency, process yield and process reliability. The industry itself estimates a 15% improvement potential in energy use and CO₂ emissions by using the existing technology. This requires the industry to apply best practices from the better performing sites across the industry. However, this view may be a bit optimistic, as improvements in process efficiency have been offset by an increase in annual steel production. Despite some regional technical improvements, the industry’s decarbonization progress at the global scale has largely been stagnate, mainly due to the expanded production in emerging countries with high carbon intensity.

Increasing steel scrap usage

Steel production from scrap is much less energy intensive (up to eight times less) than production from iron ore, which is largely coal-based. However, steel recycling rates are already quite high, around 80-90% globally, and steel life expectancy is around 35 years, 7 years in domestic appliances, 20 years in heavy machines and more than 50 years in construction. So, steel products made today or in the immediate future will not be useful for steelmaking for anywhere from 15 to 50 years. Virgin iron ore units also serve as a dilution mechanism for metallic impurities circulating and cumulating in scrap.

By volume, scrap is estimated to account for 50% of the global iron content in steel by 2030, up from 35% today. At the same time, the 9-million-metric-ton steel scrap surplus of today will become a 15-million-metric-ton deficit. Overall, the amount of scrap recycled will not cover the demand for production, meaning scrap and recycling cannot be a standalone solution to achieve decarbonization goals.

Break-through innovations

It is clear that the iron and steel industry needs to adapt, and the utilization of break-through innovations on a large scale is mandatory to achieve decarbonization targets. Direct reduction, gas removal of oxygen from iron ore in the solid state, i.e. without melting, using natural gas is already utilized on a large scale, producing over 120 Mt of direct reduced iron annually. Utilizing hydrogen in direct reduction will further decrease CO₂ emissions, but it is not yet largely adopted due to the lack of large-scale hydrogen availability. Depending on the source of the hydrogen, this offers the potential for truly green carbon-free steel. Hydrogen-based DRI (Direct Reduction Iron) is, therefore, expected to be a major decarbonization enabler for steelmakers, particularly in Europe. Metso’s offering in this area includes Circored direct reduction process and Outotec® DRI Smelting Furnace. Both are separate processes that can be integrated together or with an existing steel plant to replace blast furnaces.

The use of biomass (instead of coal) and microwave energy to reduce iron ore to iron is not yet at a commercial scale. Mining company Rio Tinto aims to scale up this process – using a process called BioIron^TM which, so far, has been tested at a pilot level – with sustainable biomass combined with carbon capture technologies. Metso is involved in the development of this process together with Rio Tinto, currently performing the basic engineering for the pilot process.

Technologies still at a low technology readiness level are, for instance, molten oxide electrolysis, where the aim is to use electricity for the direct producing of molten iron. Molten oxide electrolysis is expected to gain popularity later in the 2040s when the technology is mature and scaled for industrial use. Similarly, hydrogen plasma reduction technology is in its early development stages. In this process, plasma generated by hydrogen and electricity would be used to reduce iron oxides in iron ore and steel mill residues to molten steel directly. The commercialization of this technology is expected to happen sometime around 2050.

Carbon capture and utilization/storage technologies are also approaching industrial readiness; it seems, however, that these technologies are quite case sensitive, and the main question is related to end use or storage of the captured carbon. Who is going to use the CO₂? Where can it be stored? How close are those locations? These questions determine the capital expenditure needed for the infrastructure and, therefore, the whole feasibility of these projects on a case-by-case basis.

The iron and steel industry will have several pathways to choose from for the decarbonization of  their production chains. Metso can provide support in technologies aiming for the producing and smelting of direct reduced iron and the utilizing of biomass. These are solid technologies based on industrially proven equipment and a reasonably high technology readiness level, especially in direct reduced iron applications.