The challenge of green steel

How has the last decade shaped the steel industry?

Yoshiharu Ikeda: Looking back, what strikes me most is the determination of policymakers worldwide to limit global warming to between 1.5 °C and 2 °C. A series of policy frameworks have been put in place to support the decarbonisation of the industry. Steel production generates 1.9 times more CO₂ than the steel itself. Emissions from the global steel industry account for around 8 per cent of the total global carbon footprint. From the very beginning, Primetals Technologies’ aim has been to support the industry with the technologies needed to reduce these emissions and make production sustainable.

Alexander Fleischanderl: I would like to add that, alongside the Paris Agreement itself, the EU Green Deal of December 2019 was another catalyst for the decarbonisation of the steel industry. In Europe in particular, this has significantly altered the pace of steelmakers’ net-zero strategies. It ushered in an intensive phase of discussion on possible transition pathways and led to a shared understanding amongst steelmakers, technology providers, policy-makers and financial institutions regarding the way forward. For Primetals Technologies, this provided a roadmap that we could follow.

What would you describe as the greatest advances in environmentally friendly steel production this decade?

Fleischanderl: We see three distinct phases that the industry has gone through. The first phase was optimisation – that is, improving energy efficiency, yields and the circular economy – without major capital investment. Over the last two years, we have entered what is known as the transition phase, in which processes are being electrified wherever possible. Steelmakers are switching from coal-fired blast furnaces to electric arc furnaces (EAF) and using steel scrap and hot-briquetted iron (HBI) as raw materials for electric steelmaking. There are also innovative technologies for continuous casting and rolling, such as our Arvedi ESP (Endless Strip Production) technology, which eliminates the conventional approach of cooling and reheating steel slabs between casting and rolling. This, too, reduces direct CO₂ emissions to zero and cuts down on land use and costs.

What are the next steps for the steel industry’s green transition?

Ikeda: The next – and third – phase we are focusing on is the transition to fully decarbonised steel production processes, such as Primetals Technologies’ hydrogen-based fine ore reduction – or HYFOR solution. Here, we are reducing carbon emissions in the iron ore reduction process by using sustainable hydrogen as a reducing agent instead of coal or natural gas. The industrial-scale demonstration plant, which we began constructing this year in Linz, Austria, together with our partners voestalpine and Rio Tinto, is at the heart of this flagship project for Primetals Technologies and the entire industry.

Fleischanderl: What makes Hyfor special is that it uses fine iron ore. This eliminates the usual pelletising and agglomeration steps, which are both energy- and CO₂-intensive. Furthermore, our tests over the last four years have shown that Hyfor can process any type of iron ore, regardless of its quality. We can then feed this directly reduced iron (DRI) into a smelting plant and – using 100 per cent renewable energy – convert any type of DRI into pig iron that is of the same high quality as that produced in a conventional blast furnace, but with 90 to 95 per cent fewer CO₂ emissions. Following the final investment decision (FID) in April this year, we are preparing to commission the demonstration plant for hydrogen-based iron production in autumn 2027 and to roll out the technologies commercially for the first time in 2028. Another key aspect of the transition phase is equipping steel producers with technologies that will prepare them for a future ‘green’ society. For example, an increasing number of car manufacturers are ramping up their production of electric vehicles. This means we are seeing rising demand for harder and thinner flat steel products, which help to reduce weight and thus lower emissions. State-of-the-art rolling technologies are required to manufacture these steel products. Our HYPER UC-Mill technology reduces rolling force by 10 per cent and is designed for the production of electrical steel and advanced high-strength steels (AHSS).

What needs to happen to accelerate the introduction and commercialisation of green steel production over the next ten years?

Ikeda: I currently see several major challenges for the decarbonisation of steel. The first is ensuring a stable supply of hydrogen. Establishing a hydrogen supply chain and reducing hydrogen costs are essential to attract steel producers and investors. To achieve this, electricity costs must be reduced by increasing the share of renewable energy and improving market efficiency. The second challenge is to capture CO₂ from existing blast furnaces and other fossil-fuel-based processes that are difficult to decarbonise. Until now, political support for CO₂ capture technologies has been limited. However, governments have now recognised that it is not enough to rely solely on electrification and hydrogen. We need an approach that is not tied to, or favours, any particular technology, tool or platform. Instead, decisions will be made based on what is best suited to the situation at hand. Thirdly, the costs of deploying green steel technology and of raw materials such as electricity and hydrogen will result in a premium for low-carbon steel. However, end-users of steel are less willing to pay a premium if they can instead turn to cheap imports produced using fossil fuels. Government support will be essential to change this situation. Measures such as the EU Emissions Trading Scheme (EU ETS) and the Carbon Border Adjustment Mechanism (CBAM) will be crucial in creating a level playing field.

How do you think the steel sector will develop over the next ten years?

Fleischanderl: We believe that the transition towards the net-zero target for 2050 will continue to progress steadily. AI and digital technologies will play a crucial role in this process by accelerating plant planning, optimising operations and bridging the ongoing skills shortage in our industry. Solutions such as our Central Operation Cockpit (COC) and Through Process Optimisation (TPO) are examples that are gradually bringing us closer to autonomous plant operation. These AI-powered technologies help operators to prioritise anomalies, recommend corrective actions and optimise operating costs. The ultimate goal is a highly consistent steel product and reliable plant operation. The COC is a fully digital plant and process twin, which is also used as a ‘flight simulator’ to train operators and teach them how to respond correctly in emergencies using a safe, offline version of the plant.

Ikeda: The steel industry is a key sector for the global economy. No other material can match steel in terms of strength and unlimited recyclability, and demand will continue to grow slowly. But the expansion of our industry must be sustainable. And that requires joint efforts from all stakeholders, including politicians and governments, steel producers and their customers, as well as the energy companies that supply us with electricity. We must all work together to achieve carbon neutrality.
Source: The interview, commissioned by Mitsubishi Heavy Industries, was conducted by freelance journalist Andrea Willige. Editorially revised version.