“Steel decarbonisation is likely to be faster in regions where competitively priced clean power and scrap steel are readily available.”
The industry targets a 45% reduction in intensity for primary steel and a 65% reduction for secondary steel by 2030.219 The 2050 net-zero compliant fuel mix will require disconnecting steel emissions from the growth in market demand. This entails reducing non-abated fossil fuels from their current dominant share of 86% in the fuel mix to 30%, which will require a substantial increase in CCUS deployment. For primary steel production, accelerated investments are needed, together with the commercialization of clean hydrogen fuels, coupled with implementation of CCUS-enabled technologies. In the case of secondary steel production, expediting the adoption of clean power through EAF processes is paramount.
Technology
Two leading decarbonization pathways have emerged for primary steel: clean hydrogen-based DRI-EAF is the most developed (TRL 6-8), and CCUS is rapidly developing (TRL 5-8). For secondary steel decarbonization, EAF-based production using 100% renewable electricity is a mature and available technology. Production costs for these technologies are 40-70% higher than traditional steelmaking processes.
Process emissions abatement measures
Clean hydrogen potential for primary steel: Using clean hydrogen in production processes has the potential to reduce emissions by up to 97%, however, it comes with an expected green premium of 35-70% when compared to conventional BF-BOF processes. However, constraints around the capacity of EAFs in comparison to larger blast furnaces and deployment at smaller facilities impact the applicability of this technology.
CCUS technologies for primary steel: Most CCUS-based technologies are projected to become commercially available after 2028. These CCUS technologies have the potential to decrease emissions by up to 90% compared to BF-BOF. Bioenergy carbon capture and storage (BECCS), a modified CCUS technology, can achieve up to negative emissions from BF-BOF, though results are dependent on the source of bioenergy. However, all CCUS technologies entail a significant green premium in the range of 65-120%. Although DRI-EAF with CCUS is currently accessible, its carbon capture efficiency is limited. CCUS technology is most suited for decarbonizing BF-BOF assets, especially given the higher concentration of CO2 in blast furnace gases.
EAF-based secondary steel production: Powered by 100% renewable electricity, this method offers a promising pathway towards near-zero-emission steel at low cost. EAF technology can reduce emissions by 90-95% compared to BF-BOF, with only a marginal cost premium of 8-13%. Yet, there are limits around the applications for secondary steel due to variances in the quality of available scrap. Adoption is likely to be faster in regions where competitively priced clean power and scrap steel are readily available. China, for instance, is expected to witness an estimated 70% growth in EAF production by 2050 compared to 2020 levels. Additionally, SSAB, the largest steel manufacturer in Scandinavia, launched SSAB Zero™, produced from emission-free recycled steel. One of its main advantages is its near-zero-carbon emissions throughout the company’s operations, contributing to an emission-free value chain for end-users. However, this sustainability comes at a higher cost due to the manufacturing process.
Source: World Economic Forum
