Understanding How the Future of Steel Is Green

The world owes much to steel. Without it, there will be no skyscrapers that help attract global businesses and stir the country’s economy.

There will be no ships, planes, and trains that facilitate faster delivery of goods, eventually killing the slow Pony Express.

Americans can live in comfortable homes, go to schools, and even use mobile devices that support e-commerce. Businesses that provide steel supply in major states and cities make this material even more accessible.

Steel remains a hot commodity over the centuries. According to S&P Global, the developed nations may increase their need for metal by almost 8% in 2021. The industry will then bounce back to pre-pandemic levels a year after.

But one of the most popular metals globally is also a leading contributor to carbon emissions. Steel, therefore, only worsens climate change. By 2100, when left unchecked, it could cost countries almost $2 trillion a year from global warming impacts alone, according to the National Resources Defense Council.

As part of the industry’s conscious efforts to slow down climate change, primary manufacturers are thinking of producing green steel.

What Is Green Steel?

Green steel is the by-product of a process that doesn’t use carbon. To understand the concept, one needs to know how these manufacturers produce the traditional steel.

Steel comes from iron ore, of which Australia is one of the biggest exporters. It accounts for 38% of the iron ores used around the globe today.

Manufacturers also use tall blast furnaces heated to over 1,000 degrees Celsius to melt the mineral. However, to separate oxygen from iron oxide, it needs other components. One of these is coal.

Using coal creates a chemical reaction that results in the production of carbon dioxide and iron metal since oxygen is already out of the picture. But while the iron metal becomes a useful substance, the vast amounts of carbon dioxide released only damage the atmosphere.

Manufacturers are therefore turning their attention to another process called direct reduction. It uses natural gas, which is then split into hydrogen and carbon monoxide to transform iron ore into steel.

Many consider natural gas as renewable since it’s easier to make than fossil fuels or coal. And although it still emits carbon, the emission is significantly lower. In fact, an Australian report revealed direct reduction could cut down the carbon dioxide produced per ton of steel by half.

The Steps Taken and the Challenges They’re Meeting

What’s the state of green steel today? As reported, Thyssenkrupp in Germany, whose steel manufacturing plant in Duisburg contributes to 2% of the carbon emissions in the country, plans to build a new plant in 2025. This one will solely focus on creating carbon-neutral or green steel.

By 2025, it hopes to produce 400,000 tons of it and then increase that to a whopping 3 million tons five years later.

Meanwhile, the Fortescue Metals Group of Australia wants to make the most of the iron ores it extracts by producing more iron. Although the country is one of the primary exporters of iron ores, it creates less than 0.5% of global steel.

Some steel manufacturing mills also recycle scraps, using them as feedstocks and feeding them to electric arc furnaces.

Despite the plans paved with good intentions, actually producing green steel is a lot harder to achieve for many reasons:

  1. It requires a lot of capital — One of the biggest steelmakers in Europe, ArcelorMittal, confessed that to decarbonize their facilities and meet the EU climate change goals by 2050, it needs to spend at least €15 billion. Moreover, although hydrogen is cleaner, coal is much cheaper and easier to transport. The difficulty of handling the former can also drive investment spending up.
  2. The potential output may be low —One of the ways companies can sell their steel at competitive prices is to mass-produce it by the millions. Manufacturers like Thyssenkrupp can already provide 13 million tons of iron metal a year. However, shifting to green steel may reduce that by at least 10 million tons.
  3. The prices of steel will go upSteel prices are volatile, and the cost of producing it may make it even more expensive. As an aftereffect, the costs of building ships, devices, homes, etc., will also increase.

Steelmakers know that they cannot make the metal the way they do over the years. They have to be part of the solution, including shifting to green steel. However, it may take more years before it becomes stable.

In the meantime, everyone in the industry can do their share to minimize steel pollution. Users can buy steel in bulk to reduce transport and continue recycling steel whenever they can.

Author: WebEditor

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