Green transformation: clear bonus for steel scrap

Because recycling steel from steel scrap is by far the most environmentally friendly and sustainable method of steel production, and now more and more blast furnaces around the world are being replaced by direct reduction plants and electric arc furnaces, which have an increased demand for steel scrap, "scrap iron" is now increasingly becoming a scarce commodity and it is becoming more and more important to collect, classify and process the precious raw material in the best possible way.

In the course of decarbonization, the increased use of steel scrap in steel production is the means of choice for reducing CO₂ emissions, as recycling saves an average of 1.67 t of CO₂ compared with production from iron ore via the blast furnace route. Converted, this is the amount of CO₂ emitted by a passenger car traveling 9,000 km. At the same time, every ton of CO₂ avoided also represents avoided costs that climate change entails, for today's and especially for future generations. Experts from the Fraunhofer Institutes for Microstructure of Materials and Systems (IMWS) and International Management and Knowledge Economy (IMW) have now determined the exact cost savings as part of the studies "Schrottbonus" (scrap bonus) (2019) and "Schrottbonus konkret" (2021). The "Schrottbonus" indicator used the climate and environmental costs saved by using one ton of scrap steel.

The studies are based on current life cycle assessments of the steel industry and its raw material suppliers, which cover the entire production process in terms of its emissions: From the mine to transport and delivery at the steel mill gate, the Fraunhofer experts include all the CO₂ emissions generated in their calculations. In this way, a hypothetical 0-scrap production process and a scrap-only production process can be compared and the resulting CO₂ savings determined. To convert the calculated CO₂ savings into euros, i.e. to determine the scrap bonus, the Fraunhofer experts used standard economic studies that estimate the overall economic costs of environmental damage.

Based on a best-case and worst-case scenario, the experts determined a corridor of around €30 per t of CO₂ (lower reference value) to €110 per t of CO₂ (upper reference value), which corresponds to a "most-likely" of around €70 per t of CO₂ emitted in steel production.

As a consequence, this now results in a scrap bonus of between €79 and €213 per ton of recycled carbon steel scrap. This means that society would be saved that much money due to reduced climate and environmental damage. The average reference is €146 per ton.

For austenitic stainless steel scrap the figure is even higher: between €230 and €766 is the bonus corridor here, as each ton of recycled steel saves an average of 6.7 tons of CO₂. To give you a better idea: 6.7 metric tons is the amount released by burning around 2,800 liters of gasoline, which would enable a passenger car to cover a distance of 36,000 kilometers.

In terms of total European steel production, the experts calculate for 2021 that the use of 87.9 million tons of scrap could save the equivalent of between €7.0 billion and €18.7 billion in environmental costs.

In view of these impressive cost savings, the scrap bonus indicator proves the need for scrap-based steel production.

But not all scrap is the same. Each time, the material composition is different, depending firstly on which recipe was originally used in steel production - there are over 2,000 different ones - and how high the level of contamination with other metals or material components is. Excessive copper and tin contents in particular are problematic in the molten scrap and impair the quality of the steel to be produced. To ensure that steel producers receive the best possible scrap suitable for their respective recipes in as consistent and homogeneous a quality as possible, suppliers such as Remondis subsidiary TSR are now trying to classify their scrap even more finely and in a more homogeneous way and to process it according to the recipes of the "steelmakers" and also to guarantee the homogeneity of the scrap by means of a quality seal. The first showcase product of this new type of scrap is "TSR40", a new scrap grade which is particularly suitable for use in blast furnaces.

TSR40

The new scrap grade is an improvement based on TSR Recycling's "E40", which consists of shredded car parts and household appliances. The impurities, e.g. from copper, chromium or nickel, are very low thanks in part to completely newly developed measurement, detection and separation technologies. Organic components are also virtually absent. The result is a very homogeneous scrap material with clearly defined qualities that is comparatively free of impurities. In a world where one in four steel scrap deliveries is rejected by steel producers, this represents an entirely new level of quality.

"It's like the recipe of a cake - we give the steel producers a material with a clearly defined content," says Christian Blackert, head of TSR's Rhine-Ruhr operation.

Moreover, with the new scrap grade, steel producers have a homogeneous material. Thanks to a sophisticated crushing, grinding and separation technique, the TSR experts achieve uniformity in contour and size. This avoids blockages during material transport.

"With TSR40, we are leaving the path of essentially selling waste and moving toward giving scrap the status of a product," Blackert said recently when presenting the project at the ecoMetals Day in Düsseldorf last fall.

The TSR40 development is being financed by the "REDERS" project together with thyssenkrupp. REDERS stands for Reduction of CO2 Emissions by Increasing the Recycling Rate in Steel Production. The state of North Rhine-Westphalia is funding the project with €6.4 million. The TSR40 processing plant is located in Duisburg's inland port, the so-called "scrap island". There, 450,000 tons of scrap from end-of-life vehicles, mixed scrap, large household appliances, etc. will now be processed annually into TSR40 quality scrap. The output of the plant will be 330,000 t of scrap and 110,000 t of residual waste, which will be suitable for use both in blast furnaces and electric arc furnaces.

The TSR40 stands for a new, clean and high-quality scrap material which is to be available in large quantities for the steel industry. According to Blackert, the processing plant in Duisburg is not only a milestone for the entire industry but also a lighthouse project. This means that the steel industry and its processing sectors can now take the next steps toward green transformation. With a high availability of TSR40, it would be possible to produce larger quantities of sustainable quality products, for example in the automotive industry.

Closing the loop

Steel is infinitely recyclable, but only if it is also comprehensively collected and kept in the cycle at the end of its product life. True to this logic, more and more steel producers are already working together with their steel-processing customers to think in circular terms: the German automotive industry in particular is a pioneer in sustainability. In a partnership between Volkswagen and the German steel manufacturer GMH Group, for example, work is proceeding at full speed to produce a closed steel cycle.

As part of the partnership, Volkswagen in Osnabrück, for example, delivers its metal scrap to the GMH-Georgsmarienhütte plant 10 kilometers away, where the scrap is then recycled. The end product is once again high-tech steel for the automaker. With the intermediate process step that at the Volkswagen plant in Baunatal/Kassel, the bar steel supplied by GMH is further processed into sheet steel, and from there the recycled steel returns to the Volkswagen Osnabrück value chain.

In the years of cooperation, the annual tonnage rose progressively and in 2022 already amounted to 4000 tons of scrap metal, which is given a new life at GMH.

Alexander Becker, CEO of the GMH Group, sees the future in the closed loop: "With such a reduced carbon footprint, our green steel will strongly support the decarbonization of all supply chains as well as the end products, in this case the vehicle itself. For large carbon emitters like the automotive sector, this is especially important. An electric car made from green steel and powered by renewable energy is definitely the way to go."