Overview of steel
Steel is a fundamental building block for today's modern societies. Steel is used in a variety of applications ranging from transportation (cars, ships, rail, planes), energy generation (wind & solar installations but also conventional energy generation sources), construction of buildings & infrastructure projects, appliances etc. Nearly 68% of a car is composed of steel and more than 80% of a wind turbine's components are steel for example (source: Arcelor Mittal).
Steel has very high tensile strength, it is malleable, ductile and since it is manufactured, it can be made to a very standardised quality unlike naturally sourced wood. Steel is durable, can be made rust / corrosion proof, is long lasting, can withstand external forces and is light weight. Steel used in construction is extremely efficient as most steel structures can be prefabricated making construction faster, cheaper and safer. Steel is significantly more fire resistant than wood but less so than concrete. Most importantly, steel is 100% recyclable.
[Paper produced by world steel on the applications and use of steel. A good read in a crisp and informative format.]
https://www.worldsteel.org/en/dam/jcr:4864507f-7f52-446b-98d6-f0ac19da8c6d/Fact%2520sheet%2520steel%2520applications%25202021.pdf
The importance of steel can be demonstrated by looking back at the growth of world crude steel production. It would make sense to compare steel production growth (source world steel) versus population growth to see how much we are now consuming and why steel is popular and will continue to remain so.
As the table shows, steel production has outstripped population growth hence we are consuming more steel per capita now than in the past.
Population (billion) | World Crude Steel Production (mm tons) | |
1970 | 3.682 | 595 |
1980 | 4.43 | 716 |
1990 | 5.28 | 770 |
2000 | 6.11 | 848 |
2010 | 6.92 | 1435 |
2020 | 7.75 | 1878 |
Multiplier | 2.1X | 3.15X |
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| Source: World Steel |
Steel production and consumption is unlikely to abate from its 2020 production level of c. 1.87 billion tons. As per the IEA, in 2019 an average of 240kg of steel was produced per annum per person and this is expected to rise to 260-270 kg per person per annum in the future (STEPS projection scenario) which implies we could be seeing world steel production just shy of 3 billion tons per annum by 2070. In a more environmentally conservative scenario, the IEA projects steel demand to be flattish till 2070 on the back of material efficiency gains. A large part of this future demand could be fulfilled through the recycling of the steel.
Steel production is highly concentrated in the Asia Pacific region with China accounting for more than 50% of global production with Chinese production in excess of 1 billion tons. China is followed by India at around 100 mm tons followed by Japan at around 88 mm tons. 5 of the top 10 steel manufacturing countries are located in Asia. - worldsteel report 2021.
The largest steel manufacturing company in 2020 was the China Baowu Group which produced 115 million tons followed by Arcelor Mittal at 78 million tons.
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| Source: World Steel |
Steel Emissions and Energy Intensity
Steel is one of the most highly emitting industries on record. Direct CO2 emissions from the steel industry in 2019 as per IEA was around 2.7 billion tons, a staggering number. Most of the emissions from steel are related to fuel / energy combustion versus process related emissions, a contrast to the cement industry. If one considers indirect emissions, then the industry is estimated to have emitted around 3.7 billion tons pa in 2019!
Steel production is highly energy intensive and the industry is reported to have consumed around 26 exajoules of energy in 2019 and an estimated 15% of world coal demand comes directly from the steel industry. Coal consumption in steel is a significant cause for GHG emissions.
Steel Production
There are essentially three routes to produce steel (a) blast furnace, basic oxygen furnace [BF] (b) scrap based electric arc furnace [EAF] (c) direct reduction electric arc furnace [DRI]
In this note we shall review the three alternative approaches to manufacturing steel, their respective pros and cons, the energy consumption and emissions for each of these approaches. As argued in an earlier note, the production of steel is a major component of GHG emissions hence a deeper understanding of the steel industry is essential.
A quick comparison of the three methods across key parameters before we jump into details is provided in the table below. Source of data is IEA
CO2 emission / ton of steel | Energy Consumed / ton of steel (GJ/ton) | % share of production 2020 | % share of production 2050 - Stated Policies | |
BF/BOF | 2.2 | 21.4 | 70% | 52% |
Scrap - EAF | 0.3 | 2.1 | 22% | 36% |
Nat Gas / DRI | 1.4 | 17.1 | 7% | 11% |
Iron & Iron Ore
The key building block for virgin steel is iron which in turn is naturally found as iron ore. Hence, before we get into the manufacturing processes of steel, we should spend some time on iron. Iron is abundantly found on the earth's surface however, it rapidly oxidises and hence iron is naturally found as iron ore. Iron ore is the basic / fundamental material used to produce steel.
As iron ore is naturally occurring, it can be found in varied sizes. The biggest can be c. 1 metre across and the smallest 1mm. Iron ore is therefore classified into fines, lumps and pellets.
Iron ore can be
A. hematite (Fe2O3) red - 69.9% iron content,
B. magnetite (Fe3O4) black - 72.4% iron content,
C. limonite (2Fe2O3.3H2O) brown - 55% iron content and
D. siderite (FeCO3) - 48.2% iron content and which is pale brown.
Hematite and Magnetite are the two most commonly occurring forms of iron ore.
Now we come to the steel manufacturing process itself.
Blast Furnace, Basic Oxygen Furnace [BF]
The BF route is currently the most dominant method of producing steel. Around 70% of steel manufacturing happens via the BF route and as shown in the table above, this process is highly energy intensive and emits significant CO2. The BF route is used to produce virgin steel as the steel produced via the BF route starts from naturally occurring iron ore.
Three basic feeds for the BF are namely iron ore, coke (charcoal) and limestone plus hot air. The BF needs to be heated up significantly to around 2000C [such high heat requirement needs fossil fuel combustion].
Without getting into detailed chemistry, the objective is to split the iron from oxygen and carbon is used as a reducing agent in this respect. In many cases carbon is first turned to carbon monoxide CO to make it a more efficient reducing agent. The limestone on the other hand is used to react with the sand (comes along with the iron ore) to produce slag which comes out at the bottom of the furnace. Along with slag comes molten iron (iron largely free of oxygen) which is referred to as 'pig iron'.
If you are keen to dig slightly deeper into the chemical equations then you can view this instructional video which I think does a pretty decent job in explaining the chemical equations
https://www.youtube.com/watch?v=UjBrZCNVt_s .
Now its clear that two things are happening here which should result in GHG emissions. First high heat required to be produced by fossil fuel combustion, a major source of emissions. Secondly, as the above process shows, carbon / carbon monoxide act as reducing agents to produce pig iron but the by-product of this is carbon dioxide!
The pig iron produced by the BF contains more carbon than optimally needed making pig iron brittle. To over come this, pig iron is further processed by heating pig iron along with some scrap steel and pure oxygen to eliminate carbon to produce crude steel. This second process also generates CO2 however, 80% or so of CO2 generated in steel making via the BF route occurs during the first stage itself.
Scrap - EAF
This is a secondary method of producing steel as this method cannot use iron ore but instead requires scrap steel (recycled) for production. In this process, scrap steel is melted using electricity via graphite electrodes. Scrap steel is first sorted then heated and charged into an EAF along with lime. When an appropriate load of scrap steel is lowered into the EAF, the electrodes are lowered and an arc is generated to melt the steel. Additional chemical energy is added to the process via natural gas or oxygen.
The primary disadvantage of this process is the need to source scrap steel and then sort the scrap steel before the EAF process commences. This process cannot use iron ore which is the naturally abundant form of iron. The biggest cost item for the EAF route is the cost of scrap steel. However, given steel is highly recyclable commodity, the use and importance of EAF is only growing. Further EAF use electricity rather than fossil fuel making it attractive route for decarbonisation of the industry.
Around 70% of existing steel manufacturing in the US occurs via EAF. China on the other hand, the world's largest steel producer, is overwhelmingly BF approach right now (around 89%).
Direct Reduction - EAF (DRI)
In this approach iron ore is reduced to pig iron in the solid state. This process requires higher quality iron ore as compared to the BF process. The degree of flexibility around iron ore quality is much less in the DRI process as pollutants in the iron ore cannot be removed in the solid state. The reduced iron is then melted into a liquid form in an EAF as a second step to produce crude steel.
The key reducing agent in the BF route is carbon and carbon monoxide. In the DRI route, the reducing agent is a combination of hydrogen and carbon monoxide (syngas) which again leads to CO2 emissions but in lower quantum as compared to the BF route.
The key feedstock used is natural gas to generate carbon monoxide and hydrogen (syngas) although in some countries coal is also used. As the iron ore descends from the top of the furnace in solid form, the syngas is fed from the bottom which reduces the iron ore to iron. The iron is then further processed in an EAF to produce steel.
DRI is used when scrap steel availability is not enough to generate steel in quantity or when the demand needs are not sufficient to support a BF operation.
For more information on DRI watch the following video by Midrex the leading DRI technology provider
https://www.youtube.com/watch?v=t8_yNvvs9bE
https://www.midrex.com/
The attached note below is from world steel dynamics and shows their view on the steel manufacturing processes as of 2019 and how the methods could evolve by 2050.
https://www.aist.org/AIST/aist/AIST/Publications/wsd/WSD-February-2021.pdf
Impact of steel making on the environment
The importance of steel is unquestionable as steel is being used by all countries across sectors. Steel has become an integral backbone of modern societal development. However, as demonstrated above the production of steel is energy intensive, uses considerable fossil fuel and CO2 emissions take place intensely across fuel combustion as well as the process itself. At 2.6 billion tons per annum of direct emissions, the industry is without doubt a massive contributor to GHG emissions.
There is no one path to decarbonise the steel industry and neither is there one specific technology that can be adopted. All plans rely on three critical pillars namely (a) improved efficiencies at site (b) greater recycling of steel and (c) break through technologies in the future.
Improved Efficiencies
Steel manufacturers around the world will continue to focus on improved efficiencies ahead of adopting breakthrough technologies of the future. Historically the steel industry has been working hard to enhance energy efficiencies and since the 60s energy intensity for steel making has dropped by 60%! As energy costs range between 20%-40% of total costs, energy efficiency is a key focus for the industry from a profitability perspective as well.
In this phase, improvements will be secured around iron ore / scrap quality improvements, energy efficiency, process yields and process reliability. If this were to be successful, world steel believes that CO2 emissions will drop by 20% for BF / DRI routes (ore based) and by 50% for the EAF approach (scrap based).
Greater Recycling
Steel is a highly recyclable commodity and recycled steel is used in both EAF as well at the BF route albeit in different proportions; 100% for EAF. Current recycling rates stand at around 85% as per world steel estimates hence the ability to greatly improve via greater scrap collection percentage is limited.
Scrap does play a vital role in reducing the demand on raw materials and energy. As per world steel one ton of scrap steel that is recycled can reduce the emission of CO2 by 1.5 tons and reduce coal consumption by 740 kg.
The optimistic view is as global steel capacity jumped in the 2000s and life span of steel structures is 30-40 years, a fair amount of scrap steel should become available over the next decade or so which should be a net positive for the industry.
Breakthrough Technologies
Breakthrough technologies are not commercially available or feasible today. They are mostly in pilot stages waiting to be commercialised. The coming decade should demonstrate greater interest and investment flowing into these technologies, failing which net zero ambitions for the world at large would become challenging. The breakthrough technologies can be divided into two main categories.
A. Using fossil fuel or bio fuels as a reducing agent but using carbon capture techniques (CCUS) to capture the CO2 emitted. Under the IEA's Sustainable Development Scenario by 2070, 75% of CO2 produced will be captured and stored. This requires a massive scale up of this technology from current levels. CCUS could potentially be retrofitted to all types of steel making units. Transportation & storage of CO2 though over distances becomes a huge challenge with CCUS. There is also the potential for cost increases from using CCUS facilities in steel manufacture and costs can rise by more than 10% and more. This would make many plants unviable without supportive policies.
The world's first commercially viable CCUS steel facility is now underway at Emirates Steel. It captures 800,000 tons of CO2 which is captured, used and stored in underground oil fields in the Emirates. This is a DRI plant that uses natural gas CH4 to produce hydrogen and carbon monoxide as reducing agents. This results in CO2 being produced but instead of the CO2 being emitted into the atmosphere, it is captured at source.
For more details of this project you can review the slide pack link, https://ieaghg.org/docs/General_Docs/9-11-15%20Presentations/P3_4_Abu%20Zahra.pdf
B. Using hydrogen as a reducing agent which would result in water vapour being produced instead of CO2.
In the DRI process, where fossil fuel such as natural gas or coal is used, iron ore gets reduced to iron but CO2 is generated in the process. If instead hydrogen is used as a reducing agent, then water vapour gets produced. Whilst H2 is being used in DRI, it is not used exclusively but in conjunction with carbon as a reducing agent. For a complete net zero emissions process, the endeavour would be to use green H2. Besides use in DRI, there are also plans to use H2 in BF as well as a blend.
In future notes I shall write about CCUS and H2 applications for the industrial sector in general in more detail.
Conclusions and path to net zero for steel
As per the IEA, in their Net Zero scenario, there is a steep fall in CO2 emissions from the steel industry. From a current rate of 2.4 billion tons pa to 1.8 billion tons by 2030 to 0.2 billion tons by 2050. This is despite production of steel remaining flat to slightly increasing over the same duration. The key reason for this sharp drop is the reduction in use of fossil fuel (although the use of fossil fuel / coal does not go to zero even in 2050).
The big shift / transformation is the move from coal to electricity as the EAF production method gathers considerable market share on the back of greater steel recycling. Electricity therefore plays a vital role in the industry and its share of energy source for the industry rises from 15% in 2020 to more than 70% by 2050. Electricity also is used in the production of H2 which is used in the DRI process as a potential low carbon / zero carbon option.
Irrespective of the model or path for steel's decarbonisation, one thing stands out that there is no one single solution that will help decarbonise the entire steel sector. In summary, the following solutions will all have to be applied simultaneously to achieve a net zero position.
1. Energy efficiency to reduce the use of energy required per ton of steel produced
2. Circular economy - recycling rates of steel is improved as energy requirements for converting recycled steel into steel is much lower than virgin steel
3. CCUS adoption - where fossil fuel is used as a reducing agent and CO2 is generated, CO2 can be captured and stored using CCUS technologies
4. H2 - H2 can be used as a reducing agent in DRI processes to produce water vapour instead of CO2. H2 can also be used as a partial feedstock / injection in a blast furnace to reduce reliance on fossil fuel.
5. Use of biofuels as a feedstock for energy. Whilst this produces CO2, the biofuel has been produced via an equal amount of absorption of CO2 from the atmosphere which then nets out.
6. Greater electrification of the steel making process by relying more on EAF than BF/BOF and then also working towards a green power grid.
7. Material efficiencies which includes better scoping of projects, using just the optimal amount of steel, building life extension and more modular design that uses less steel
Additional links and resources
Below are links to some of the innovations currently taking place in the steel industry. I have shared a few youtube videos that provide some additional context for the reader.
A. HIsarna process: Tata Steel and others are engaged in this new development plan. This approach is aiming for ultra low CO2 steel where iron ore is reduced in just one step and very efficiently. This process does not need the use of coke as a reducing agent.
https://www.youtube.com/watch?v=kdmjrO4sroA
B. SALCOS process: This process is aiming to use hydrogen (plus some % of natural gas) as a reducing agent and directly reducing iron ore to iron. This process is looking achieve 85% reduction of iron ore with around 50% drop in CO2 emissions.
https://www.youtube.com/watch?v=IPlwjg0G8yo
C. HYBRIT: a process being developed in Sweden to generate net zero steel. This is again a direct reduction process using H2 instead of coke as a reducing agent to produce pig iron from iron ore and then ultimately steel.
https://www.youtube.com/watch?v=zk5-8DM0OvA
https://www.youtube.com/watch?v=GdR1lScN8HY [part 5 is the most interesting]
D. Hamburg / Arcelor Mittal - development of a H2 reducing pig iron, steel plant. The plant aims to only use H2 as a reducing agent to dramatically reduce CO2 emissions. Whilst it will use grey hydrogen as a start, it will move to green hydrogen when it is available.
https://www.youtube.com/watch?v=McJ8YHAaciI
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