Creating the Future of Clean Steel

A future reliant on steel

Standing at the centre of the city of the future, towering above you, are hundreds of floors of solid steel, glass and timber. Gleaming are the record-tall skyscrapers of the great African cities, of Lagos or Nairobi; the Asian cities of Jakarta, Delhi and Mumbai or any of the other myriad population centres that are due to undergo rapid densification and urbanisation from now, until the turn of next century. According to some estimates, building this urban future will need the same volume of material required to construct an entire city of Manhattan each month from scratch, for the next 40 years - a central material of which, was and will be: steel.

Ancient and remarkably versatile, steel is produced in volumes second only to concrete and aggregate globally: 2 billion tonnes a year. It makes up critical parts of our buildings, cars, ships, machinery, factories, bridges, appliances and more. Producing it from raw iron ore burns around 1 billion tonnes of coal each year, a quantity so vast that it could cover New York’s central park to the height of the Chrysler building. When including some natural gas and oil burning too, this emits nearly 3.5 billion tonnes of CO2 into our atmosphere. An equivalent sum of CO2 to all the exhaust fumes of every flight on Earth, four times over.

A difficult road to net zero

There are three types of steel plant: Recycling plants, blast furnaces and so-called direct-reduction plants. About 84% of all the pollution produced by steel comes from converting raw iron ore into steel via the Blast Furnace route but this only makes 70% of steel output: over 1.34 billion tonnes of steel a year. Another 11% of emissions from recycling steel despite it making up a disproportionate 25% of output (more on this later) and just under 5% of emissions come from the Direct-reduction route which makes up around 5% of output.

In producing steel, there are essentially two starting points: raw iron ore or scrap steel. If starting with scrap, then an Electric Arc Furnace (EAF) will typically be used to melt down the scrap, remove impurities and any oxidisation to then produce billets of high quality steel of varying properties and types; this route is known as Scrap-EAF and still produces emissions. Many of the furnaces use natural gas burners to rapidly heat scrap metal, improving throughput. Then, fossil-based carbon such as pulverised coke, is used as “slag-foaming agent” to separate out impurities and also for the creation of three large pillar-like anodes that carry huge quantities of electrical current and perform the “electric arc” heating in the EAF. Finally, most electricity grids still use fossil fuels to deliver continuous electricity and so simply using electricity to heat the scrap, releases secondary emissions via a “dirty” grid. We’ll talk more about avoiding these later on.

On the other hand, starting with iron ore, steel must undergo two production stages: ironmaking and steelmaking. Iron ore typically has lots of impurities, known as “gangue” made of silica and aluminium compounds, the iron is also oxidised, so needs energy input to separate it out into pure iron at a higher temperature with something to pull the oxygen off it, known as a reducing agent; today that is carbon. These operations are all done by coal and limestone in a Blast Furnace, titanic machines full of hundreds of tonnes of molten iron and coal, towering as high as the statue of liberty in New York. Over 500 exist today, some of them so large that they could singularly provide the steel for 5 million cars in a year. These machines have become thousands of times more efficient over the last few hundred years, yet many of the best available technologies to improve efficiency are not fitted to Blast Furnaces around the world, despite strong business cases to do so.

In order to reduce emissions of these plants to zero, there are just three routes to choose from:

  1. Turn off as many polluting plants as we can, in other words, reduce or substitute demand for steel. 

  2. Change the facilities that already exist to be more efficient or not pollute at all or, 

  3. Build new plants using novel technologies and replace the whole supply chain, fast.

Approach 1: Turning off all plants

Shutting down blast furnaces and replacing them with less polluting recycled steel remains constrained, as WorldSteel claims, 80 - 90% of steel is already recycled, meaning a lack of highly desirable scrap metal exists. This may be dubious however, as we find End of Life (EoL) steel is recycled at a much lower rate of 60%, so there could be some potential here. Regulations around the “right to repair”, better re-use and “design for disassembly” can solve many of these issues. 

Meanwhile, a lot of effort is currently going into reducing demand for the material in construction, which currently demands the lionshare of 52% of global steel for providing tensile strength to structures. On this, options on the table are to use less fresh steel by reducing speed of corrosion and lengthening service life, constructing medium-height buildings from composite timber-laminations and reducing the quantity of redundant steel through better fabrication and design practices. Regulation again, might prove to be the best tool to tip markets in favour of these measures.

Approach 2: Change existing infrastructure to remove all emissions

Even in efficient, modern blast furnaces, the coal remains problematic. Replacing the fuel is not easy, but a few are trying: Perpetual Next, NextFuels and dozens of companies using torrefaction and carbonisation to convert biomatter into a workable substitute “biocoal” or “biocarbon” briquettes and sinter. Fuel structural integrity, elemental impurities, life-cycle analysis and land-use change emissions present some of the key issues.

On the other side, continuing coal use is a consideration, if we attempt to capture the emissions via “Top Gas Recirculation” but this only abates 40% of the problem according to latest technology, with Mitusbishi and Primetal Technologies looking to launch a solution that could do nearly 100% of the emissions capture. Still, mining coal and producing coke needed for blast furnaces produces fugitive methane and process emissions that are hard to abate or even monitor. One way around this might be to create a “closed loop” carbon cycle (see later).

Approach 3: Build new plants

Starting with a “blank canvas” by redesigning the entire steel production process to work with renewable electricity or heat, would go a step further than simply changing the fuel or retrofitting existing facilities, it would require building up our steel-making capacity from fresh with renewables in mind.

Currently, there are various approaches to this route: most dominant of all is Hydrogen Direct-Reduction (HDRI), which replaces the existing blast furnace process by using green electrolytic Hydrogen as the reducing agent instead of carbon in coking coal. Most projects such as HYBRIT or H2GreenSteel use the existing Midrex H2 process, which utilises a shaft furnace fed by H2 storage (where the complications start), the hot iron produced by this process is then fed directly into an electric arc furnace (EAF) to convert it into various steel products similar to the recycling of scrap. However, there are significant complications. 

Simply using continuous grid-fed electricity is likely to either have fossil grid emissions, or a high cost associated with “firming” renewable energy (see Lazard 2023 report) or on-site energy storage via large H2 tanks with expensive high-power electrolysers, plus all the process emissions associated with EAF as addressed earlier. As if this weren’t challenging enough, Midrex themselves explain how their process is optimised for high-grade iron ores that are dwindling in supply and will struggle to cope with low-grade ores, due to poor processing of gangue compared to blast furnaces; meaning expensive beneficiation processes or poorer quality DRI fed to the EAF, or introducing a middle processing step that is likely still fossil-fuel fed.

Among other approaches to electrifying steel, are Boston Metals’ “Metal Oxide Electrolysis” which currently suffers from excessive anode consumption and 10 years at medium levels of TRL, plus uncertainty over the quality of ore that can be used. Meanwhile, Electra Steel and ArcelorMittal’s Siderwin have low temperature pH-based electrolyser technologies that are likely to be much more energy intensive due to the lower temperatures but will nonetheless serve an important role for low-grade ores.

Meanwhile, existing new plant solutions would require almost 30% of the entire global electricity supply to operate and a hotly disputed CAPEX figure in the 4 - 5 trillion USD region.

Creating ventures in steel

At DSV, we are hiring founders to build a venture to address the challenges outlined here. We look forward to developing a new solution that works around these issues constraining current technologies. We are aiming for approaches that would work more closely with intermittent renewables, and make adequate use of renewable heat where possible. It would seek sources of carbon for alloying that are renewable and do not add additional process complications or emissions. Finally, given the scale and ubiquity of steel manufacturing in the world today, any solution is required to have deployability and low capital cost at the centre of its design philosophy from the start.

If you are an engineer or scientist with an entrepreneurial flair and enormous ambition to create a positive impact on the fight against climate change then consider joining us in building the future of the steel industry by applying here. We will also shortly be announcing a webinar for interested applicants, to tell you more about the area and why you should join us to create a venture with the potential for global impact.