U.S. based Boston Metal and Swedish steelmaker SSAB are among the first in the world to use electric arc furnaces, which are fueled by electricity and have a carbon footprint up to 95 percent lower than coal-fired blast furnaces. However, the electric arc furnace is difficult to implement in many parts of the world because it depends on abundant, cheap, and necessarily clean energy (wind, solar, and green hydrogen) to make sense.
These examples show that viable technologies to reduce and mitigate emissions already exist, though the limited supply of clean energy is currently acting as a bottleneck to adoption of electric arc furnaces in the steel industry globally. Only 12 percent of the global energy matrix is wind and solar power, sources that can effectively be expanded without the environmental impact associated with hydroelectricity. The availability of green hydrogen is also growing but still far from becoming a real alternative.
The Boston Metal and SSAB examples mentioned earlier illustrate how important close collaboration with clean energy providers, willing to guarantee supply of green electricity, is to the success of pilot projects for fossil-free steel production lines. The Swedish company, for example, expects to be able to implement a fossil-free steel production line on a commercial scale by 2026, which is considered feasible.
Furthermore, these companies have found customers willing to pay a premium for their fossil-free steel, which helps finance the objectively higher production cost during this transitional phase. This is, of course, not the reality of all companies, though it does give a clear indication that the steel industry and its customers have already decided to embrace decarbonization of the metal.
It is also necessary to highlight the decarbonization initiatives that have been taking place at the mining stage, where there is ongoing research to develop new ways of processing iron ore to facilitate its conversion into steel during primary metals production, with less energy use and CO2 emissions.
Indian company Tata Steel, for example, has developed a cost-effective process that transforms iron ore into powder, which is purer and can reduce emissions in blast furnaces by up to 10 percent. In parallel they are modernizing equipment to operate with natural gas, which is less polluting than mineral coal, while pursuing the goal of being carbon neutral by 2045.
Swedish mining company LKAB has also developed an ore enrichment method that removes part of the impurities while the raw material is still in the mine. This application was even used to produce the world's first batch of emissions-free steel in 2021, melted in electric arc furnaces operated by SSAB and ultimately acquired by Volvo Group.
Brazilian mining operator Vale has also developed a method of iron ore briquetting, which basically produces briquettes with higher iron content and allows emissions in blast furnaces to be reduced by 10 percent. There are also efforts to lower the carbon footprint of quicklime, used to aggregate slag in liquid steel.
These actions, I emphasize, already provide the steel sector with the means to produce net-zero emissions steel, but not without a lot of investment. Efforts to digitalize and automate steelmaking operations are very important here, and can even generate extra capital to finance the transition and make the numbers add up.
Strategically prioritizing efficiency improvements has proven to be especially relevant among Chinese steelmakers who, without access to significant amounts of green hydrogen and clean electricity, have sought to build and modernize plants with digital and automation solutions, optimizing operations from both financial and environmental perspectives.
This look towards digitalization has allowed several companies in Asia to identify and overcome a series of losses and inefficiencies that many plants around the world will only realize when they themselves intensify their automation processes.
The industry has come to the realization that there is no singular solution to decarbonizing operations, and that a broad approach involving the consistent application of multiple existing and emerging technologies that increase efficiency will be essential. A single piece of equipment, such as the electromagnetic stirrer, improves metallurgical performance in electric arc furnace, and can reduce energy consumption and related carbon emissions by 3 to 5 percent.
It may seem not much, but over the years, this saving represents millions of dollars in profit, which justifies investment in the equipment and allows companies to contribute to carbon footprint reductions in other manufacturing stages.
It is true that much still needs to be done for fossil-free steel to become a reality on the world market. But fortunately, transformation is taking place and it looks like there’s no going back. That’s good news for our planet.