5 min read

What parts of our economy do we need to change to fully decarbonise and reach net-zero?

If you care about climate change and follow this topic, you may well answer with one of the following:

“We need a fully renewable and low-carbon electricity grid”
“We need to drive EVs”
“We need to heat our homes with heat pumps”

You may also have a response along the lines of:

“We need to plant more trees, eat less meat, use public transport and fly less”

But how many of you would respond that you are really concerned with the production of steel, cement, or chemicals? Yet these sectors combined produce more emissions than the whole of the USA. The reason they get less attention is because the solutions are less obvious. They, along with heavy-duty road transportation, aviation, & shipping, have become known as the “hard-to-abate” sectors.

Climate negotiator and podcaster Christiana Figueres doesn’t like calling them that, however. She prefers the term “have-to-abate” sectors, and I agree with her. We do have to abate the emissions from these parts of our economy if we are to reach net-zero, so we may as well stop telling ourselves that its just too hard – it has to be done!

The real question is, how?

In this min-series of blogs, we hope to explain to you the reasons why these sectors emit so much CO2 now, what ideas are out there for how we can decarbonise them, and what progress is being made in that transition.

First up, Iron & Steel.

Steel is everywhere. If cement is the muscles of our world, iron and steel are the bones. We dig up 3.1 billion tonnes of iron ore every year. But making iron and steel from it requires a lot of heat, which means a lot of energy, and the basic chemistry involved in traditional steelmaking mean that CO2 is produced from the process itself. All in all the CO2 emissions from steelmaking are 7.2% of the world’s total – more than India’s entire emissions. And with steel demand expected to rise, it is a challenge that must be tackled.

How do we make Steel today?

There are two main ways of making steel today, via Blast Furnace, or via Electric Arc Furnace.

To get the steel we see in girders, wind turbines, cars and just about everything else, we have to start with Iron Ore. Iron Ores are rocks or minerals that contain a certain amount of Iron Oxides (Iron combines with Oxygen at various ratios). Splitting this iron from the Oxygen that is latched to it is one of the main steps in the steelmaking process, and to do it you need a so-called “reducing agent”.

Thousands of years ago, humans found a great reducing agent, Carbon. In blast furnaces, coal (mostly Carbon) is baked in an air-less oven to produce “coke”. This coke is then fed into a very hot furnace with limestone and the iron ore. The coke provides the heat as well as the Carbon molecule that strips the Oxygen off the Iron Oxide to make CO2. The “pig iron” left over then has Oxygen blown over it in another furnace called a converter, creating steel, and more CO2 as a by-product.

The electric arc furnace process is a little different and its mainly used to process recycled scrap steel today. There are two crucial differences with blast furnace steel, firstly the heat for the furnace is provide by electricity, rather than by burning coal. And secondly, there is no coal involved. The iron ore (or scrap steel) is fed into the arc furnace, along with a reducing agent in the form of a gas, that can strip off the oxygen to make something called Direct Reduced Iron. This reducing agent can be the Carbon from natural gas (CH3), or it could just be Hydrogen. Once it’s been through the arc furnace the steel can be refined to the alloy that is needed.

So how do we make zero-carbon steel?

There are plenty of ways to reduce emissions from steelmaking. You can use less coking coal, you can melt more scrap in the electric arc furnace, or improve the efficiency of your plant, but there are only a few ways to truly get to zero emissions steel.

One option is to retrofit carbon capture technologies onto conventional steelmaking processes.
Another option is to use biomass instead of coal in the traditional blast furnace process.
There are also some novel technologies out there, like Molten Oxide Electrolysis, which strips the oxygen off the iron ore by putting it in a bath of electrolytes and running a current through it. This is being developed but has yet to be demonstrated at scale.
But arguably the most technologically mature solution would be to use Hydrogen as the direct reducing agent in an electric arc furnace, abbreviated to H2-DRI. If Hydrogen is the element stripping Oxygen off the Iron Oxide then there is no Carbon in the chemical equations, hence no emissions from this part of the process. And as long as the electric arc furnace and the electrolysers producing the Hydrogen are running on clean energy, then the process overall is zero carbon.

Image from https://www.hybritdevelopment.se/en/

Is there progress on real projects?

Low-carbon steelmaking is actually one of the most encouraging sectors with real projects being built by the big players in the industry. Surprisingly, a lot of steel is already recycled, 60-80 million tons in North America alone.

But there are bigger shifts underway.

Swedish steelmaker SSAB is building a demonstration plant in Gällivare called the HYBRIT project, that aims to use Hydrogen-based DRI to decarbonise 25% of Sweden’s steel production by 2026.
Another Swedish firm, H2 Green Steel, hopes to operate a large H2-DRI plant in Boden in Sweden by 2025.
ArcelorMittal have demonstrated biomass-based steel production in a facility in Belgium
Tata Steel plan to build a full-scale project in Amsterdam in 2025.
The Chinese steel giant HBIS Group partnered with Italian firm Tenova to produce steel using H2-DRI in 2023.
Cambridge researchers found a promising way of using recycled cement in the steel recycling process - see our blog on that here.
You can find a list of Green Steel projects & announcements on the Industry Transition website here.

Problem solved then?

Not quite. There are a lot of blast furnaces still out there, with the only decarbonisation options being as-yet-unproven Carbon Capture and costly recommissioning to electric arc furnaces.

There are also technological hurdles to be overcome with the quality of the iron ore needed for DRI. Currently only the higher grades of iron ore are compatible with DRI.

Supply of Hydrogen is another big issue. With the vast quantities of steel we make today, making it all through H2-DRI would require a lot of Hydrogen, and producing that Hydrogen through electrolysis will require a heck of a lot of clean power (if the process is to truly be green). You can read more about Hydrogen production in our blog here.

Another issue, less related to technology but crucial for our aim to have a “just transition”, is that a technological change from blast furnaces to electric arc furnaces may well bring with it a steep reduction in the workforce required. You just have to look at Port Talbot and the Tata Steelworks there to see this in action. There, they have closed the first of their furnaces, which had been running since 1959, and in March they closed the last-ever coke oven in the UK.

These may seem like big climate achievements, as they were polluting assets and the planned electric arc furnaces have the potential to be much greener. But electric arc furnaces don’t require as many staff, and as a result 2800 of Tata’s 8000 strong workforce in Port Talbot will be let go. This serves as a reminder for the need to support workers who work in fossil-fuel industries find new jobs and skills near where they already worked. We cannot repeat the mistakes of the coal mine closures by not supporting affected communities.

South Wales has the potential to be a industrial hub of the future, with hydrogen production co-located with steel-making, and it would be a grave mistake to leave the workers of yesterdays technologies in the past, and not support them in helping bring about a greener future.

Steel making has a clear path forward. The things to watch closely will be seeing how quickly demonstration & pilots turn into full scale manufacturing plants, watching for offtake agreements from steel users like car manufacturers who might want to burnish their green reputation, and the investment decisions of the big steelmakers as blast furnaces get replaced by electric arc furnaces.

Decarbonising the have-to-abate sectors. Pt 1: Iron & Steel.

What parts of our economy do we need to change to fully decarbonise and reach net-zero?