Climate change is moving up the political agenda and putting increasing pressure on heavy industry to reduce their CO2 emissions. As the largest producer of global industrial CO2 emissions, the steel sector has a clear role to play in meeting emission reduction targets. Based on current global projections relative to a 2-degree warming scenario (n.b. 2DS) the industry will need to make significant changes to meet global climate targets.

There are a variety of options available to steelmakers to reduce the CO2 intensity and overall emissions of their steelmaking-from improving process efficiency to fundamental changes to plant technology. Research to-date has largely focused on breakthrough technologies, such as hydrogen steelmaking or carbon capture/reuse. But are these the only options and, given the capital intensity of steel production, how do they fit within the industry in its present-day form?

This insight explores the current technological landscape and options available for lower carbon steelmaking.

Introduction

To date, climate change initiatives in the steel industry have been concentrated in the EU. In 2017, Sweden's SSAB announced its intention to remove fossil fuels from its steelmaking by the 2040s through a combination of EAF steelmaking and hydrogen-based ironmaking. In 2019, ArcelorMittal-the world's largest steelmaker-announced that its European plants would be carbon neutral by 2050. Several other European steelmakers, mostly blast furnace-based, are also researching various initiatives to reduce their emissions. The regional focus of these low carbon steel initiatives is largely due to the EU's Emissions Trading Scheme, which has increased the cost of emitting greenhouse gases in heavy industry in the region and provided an economic incentive to EU steelmakers to reduce emissions.

Having said this, steel industry CO2 emissions are not just a European concern: 186 governments across the world have signed up to emission reduction targets following the Paris Agreement in 2015. The emission reduction targets vary by region, but many of the major steel-producing countries have agreed to reduce total emissions by 15-40% by 2030. Globally, the steel industry is responsible for -7% of total global CO2 emissions and is the largest industrial emitter of CO2 after power generation. It is clear then that the steel industry bears a duty to reduce the carbon intensity of its output if countries are to meet increasing tighter emissions targets. In addition, growing public and investor discontent towards heavily polluting industries means that steelmakers increasingly feel the need to demonstrate green credentials simply to have a social licence to operate.

About CRU

CRU offers unrivalled business intelligence on the global metals, mining and fertilizer industries through market analysis, price assessments, consultancy and events.

Since our foundation by Robert Perlman in 1969, we have consistently invested in primary research and robust methodologies, and developed expert teams in key locations worldwide, including in hard-to-reach markets such as China.

CRU employs over 280 experts and has more than 11 offices around the world, in Europe, the Americas, China, Asia and Australia – our office in Beijing opened in 2004 and Singapore in 2018.

When facing critical business decisions, you can rely on our first-hand knowledge to give you a complete view of a commodity market. And you can engage with our experts directly, for the full picture and a personalised response.

CRU – big enough to deliver a high-quality service, small enough to care about all of our customers.

 

Source: prnewswire.com

Report Abuse