Steel sector’s carbon impact could double without rapid green investment
The steel industry risks becoming a carbon pariah without greater investment in low-carbon technologies for its production, a study has warned.
According to the University of Sussex Business School, multi-billion-pound investments in emission-limiting technology will be needed over the next five to ten years or its contribution to climate change could double.
Iron and steel production is one of the largest industrial emitters of CO2 and is responsible for 7 per cent of global greenhouse gas emissions. The researchers warn this could rise to 12 per cent of the global carbon budget should the industry fail to promptly take up opportunities to upgrade existing facilities with net-zero capabilities.
While many carbon-emitting sectors are transforming their operations to adhere to net-zero principles, steel has been lacking – steel manufactured entirely without fossil fuels was only manufactured for the first time this summer.
The report warns that if the industry takes no action over the next five years to phase-out carbon-intensive blast furnaces, the cumulative emission commitment from iron and steelmaking could double from current estimates to 40Gt CO2eq.
The research also found that the emissions 'locked-in' to the sector’s future are up to two-thirds lower than previously feared which could allow for a low-carbon transition to happen sooner than previously predicted. However, this will only happen with rapid advancements in carbon capture or hydrogen steelmaking technology coupled with sufficient green hydrogen production.
The study authors warn that a major opportunity to limit emissions has already been missed as a huge number of steel mills built in China at the start of the century will undergo relining between 2021 and 2023.
They are calling on COP26 leaders to explore policy measures to phase out unmitigated blast furnaces and other Paris-incompatible industrial equipment as part of a broader decarbonisation policy mix that contains measures on market creation, subsidies, material-efficiency improvements and a just transition for stakeholders.
Valentin Vogl, from the University of Sussex Business School and Lund University, said: “The findings of our study are actually hopeful but with an important caveat. The world can move away from steel and it can do so quicker than previously thought. But it needs concerted action: deploying renewables, developing technology, reducing steel use, and making the transition just.
“Our study indicates that the technological carbon lock-in in the steel system is actually smaller than often assumed in past research. Future emissions from steel are driven not by long-lived capital, but by the deployment pace of novel technologies and renewable energy provision, and a reduction of steel and energy demand. Without rapid progress in these aspects, the operation of current steel-production equipment is likely to consume significant amounts of the world’s remaining carbon budget.”
The study authors argue that blast furnace relining, the reoccurring investment where mill production is halted to allow for the repairing of refractory material that separates furnace walls from its hot contents, represents the best opportunity for steel producers to upgrade their facilities to low-emission technology.
To decarbonise the steel sector, blast furnaces will have to be equipped with capability for carbon capture and biomass fuel or be replaced in their entirety with a different technology such as the hydrogen direct reduction process, which in recent years has emerged as the industry’s preferred decarbonisation route.
Metals producer Rio Tinto recently revealed that it has been developing a new way to deliver low-carbon steel by using sustainable biomass in place of coking coal.
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