Decarbonizing the Steel Industry - Trends, Assessing Technologies, Challenges and Case Studies

While steel has historically been a sector that is well known for its ‘hard to abate' emissions, demand for green steel is rising rapidly. This report assesses the steel sector's current emissions footprint and its emissions reduction targets. It also explores the potential and limitations of the steel sector's foremost decarbonization technologies: Green hydrogen for HDRI steel, carbon capture utilization and storage, and refining steel via electrolysis.

Steel accounts for 9% of global CO2 emissions and is considered a hard to abate industry. Amidst strong forecast growth over the coming decades, major changes need to be implemented to get steelmaking on track and in line with the Paris Agreement. Secondary stream steelmaking (recycling of scrap) is not expected to satisfy global steel demand despite increasing scrap availability over the coming decades. Electrification of both major and ancillary processes, and general efficiency improvements are necessary and cost-effective changes for steelmakers but only yield modest emission reductions. Innovations in primary steelmaking are required. Proposed technologies to decarbonize primary steelmaking include use of hydrogen (instead of coal) in the direct reduction of iron (HDRI), Carbon Capture Utilization and Storage (CCUS) and innovative electrolysis technologies. The “green steel” project pipeline is expanding with development of these technologies but needs to be accelerated to get on track with net zero. HDRI is the most developed technology at commercial scale and is expected to make up the majority of green steel projects by 2050 but cost and hydrogen infrastructure remain major challenges. Electrolysis needs more development at scale, and steelmakers have been slow to adopt CCUS since it does not have an obvious road to affordability. As green hydrogen and renewable energy keep reducing in cost, there will be a shift from coal to HDRI and electrolysis over the coming decades. This process could be sped up by increased carbon tariffs or by companies making commitments to purchase green steel.

Key Highlights

• Steel contributes to 9% of CO2 emissions globally (EPRS), with coal used in the direct reduction of iron ore (DRI) being the highest emitting stage in steelmaking.
• In order to keep emissions in line with the Paris agreement, the industry must cut emissions by 93% before 2050.
• Despite a doubling in the green steel project pipeline in the last year, an additional 30 projects are necessary to be on track to achieve the IEA's NZE milestones.
• HDRI green steel is currently around a third more expensive than conventional steelmaking
• Electrolysis refines iron ore electrochemically by passing a current through it, rather than by direct reduction. Molten oxide electrolysis (MOE) uses a strong current giving high electrode temperatures, whereas low temperature electrolysis (LTE) uses significantly less electricity by using an acidic or alkaline solution.

Scope

• Steel industry emissions footprint
• Suitability assessment of decarbonization technologies
• Global low carbon hydrogen outlook
• Hot direct reduced iron (HDRI) steel key players
• Global CCUS capacity outlook
• Key players refining by electrolysis

Reasons to Buy

• Obtain the most up to date information on recent developments and policies effecting the steel industry's energy transition.
• Identify key energy transition technologies for the decarbonization of the steel industry
• Obtain market insight into current rates of technology adoption and the factors that will shape the sector's decarbonization.
• Identify the companies most active companies across CCUS and green steel in the sector.