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ENVIRONMENT 59
www.steeltimesint.com May/June 2019
1 Lund University, Environmental and Energy Systems Studies, Box 118, 22100 Lund, Sweden
2 Fraunhofer Institute for Systems and Innovation Research ISI, Breslauer Str. 48, 76139 Karlsruhe, Germany
Can we fi nd a market for green steel?
The race is on to nd an alternative and greener way to make steel away from the re and brimstone
associated with traditional methods. Higher prices for ‘green steel’,however, will mean that new
markets must be found, argues Marlene Arens1,2, Valentin Vogl1
FOR the rst time, European steelmakers
consider the phase-out of blast furnaces
for primary steelmaking. This marks a
watershed for the steel industry and it
would be a crucial step for European
climate action. The Paris Agreement sets
the pace for climate action. It reaf rms the
goal to keep global warming to well below
2 °C versus pre-industrial levels and that
efforts should be pursued to stay below 1.5
°C. The latter means that carbon neutrality
must be achieved globally by mid-century,
whereas the 2 °C target means net-zero
between 2070 and 2085.
The EU’s current 2050 goal is an 80
- 95% emission reduction against 1990
levels, but in an attempt to bring policy
in line with the Paris Agreement, the
Commission has suggested a new net-zero
emissions target by 2050. Some countries
passed their own targets with increased
ambition, such as Sweden’s carbon
neutrality by 2045 and Germany’s carbon
neutrality by 2050.
The steel industry is one of the largest
industrial greenhouse gas emitters
and accounts for about 5-7% of total
anthropogenic carbon dioxide emissions.
Converting an existing steel plant into one
without carbon dioxide emissions is far
from trivial. Europe is home to only a few
dozen blast furnaces, but each is built to
last for two decades or more and each is
worth hundred millions of Euros. Still, the
answer to the question which future these
industrial giants might have in Europe has
changed in recent years, but it is obvious
that reaching future climate targets requires
action today.
Back in the mid-2000s the answer
seemed to lie in carbon capture and
storage (CCS). The 40 million Euro Ulcos
project aimed at reducing carbon dioxide
emissions in the steel industry by at least
50% through capturing ue gases from
steel plants and transporting the carbon
dioxide to safe underground storage sites.
Three out of the four selected technologies
within that project relied on carbon
capture and storage but so far, CCS in the
EU steel industry has not made it beyond
the research and development phase. The
economic crisis in 2009 and the years
after pushed economic survival on top of
the agenda, but CCS also faced a major
barrier as public acceptance declined and
citizens grew increasingly concerned about
living on top of carbon dioxide storage
sites. Consequently, carbon capture and
storage stepped down the agenda and the
development of the Ulcos technologies
dwindled.
Yet, in recent years and months there is
ENVIRONMENT
59
Green steel Marlene.indd 1 22/05/2019 16:06:13
ENVIRONMENT
60
www.steeltimesint.com
May/June 2019
growing news on replacing coal-based blast
furnaces with iron- and steelmaking based
on hydrogen.
SSAB in a consortium with LKAB and
Vattenfall
In April 2016, three Swedish companies
formed the HYBRIT consortium that
aims at carrying through the transition
to fossil-free steelmaking in Sweden and
Finland. The partners are the steelmaker
SSAB, Europe’s single iron ore mining
company LKAB, and the power company
Vattenfall. In their vision, ironmaking will be
based on a direct reduction process using
renewable hydrogen produced through
electrolysis, and using electric arc furnaces
for steelmaking.
A pre-feasibility study was conducted
between 2016 and 2017, and is now
followed-up by a four year research
programme. This rst research programme
contains research in fossil-free mining
and pelletising, electrolysis and hydrogen
storage, as well as iron- and steelmaking
with renewable hydrogen. In parallel, a
direct reduction pilot plant with a capacity
of about 1 ton per hour is being built
in the northern Swedish city of Luleå,
where trial runs are set to start in 2020.
A demonstration plant as the subsequent
stage is scheduled for 2025. All of these
activities are supported by the Swedish
Energy Agency.
In 2025, SSAB will replace its two blast
furnaces with a total capacity of 1.8 Mt
in Oxelösund with electric arc furnace
steelmaking. By 2040, Sweden’s third and
last blast furnace in Luleå is scheduled to
be replaced, as well as the two Finnish blast
furnaces in Raahe. In parallel, hydrogen
direct reduction plants will be built to
supply iron to the arc furnaces.
voestalpine
Four European steelmakers now suggest
hydrogen as the way forward to cut
carbon dioxide emissions. In summer
2016, voestalpine announced a strategic
co-operation with a power utility on
renewable energy and the provision of
hydrogen. “voestalpine plans to consistently
decarbonise steel production step by step
and make the shift in the long term from
coal to a possible utilisation of CO2-
neutral hydrogen”, Wolfgang Eder, CEO
of voestalpine stated. However, already
three years earlier, in 2013, voestalpine
announced an investment in a 2-million-
tonne natural gas-based direct reduction
plant in Corpus Christi, Texas, as being
a fundamental step in achieving the
company’s internal energy and climate
goals. The plant started operation in
October 2016 and half of its production
is shipped to the company’s Austrian
plants. The consecutive step of shifting
from natural gas-based direct reduction to
hydrogen-based steelmaking is not a big
step, industry experts claim.
Next to the natural-gas based direct
reduction facility in the US, voestalpine
announced the development of the back
then world’s largest PEM electrolyser, a
low-temperature electrolysis, in 2017. It
is located at Linz and is partly funded by
the European Union under the H2Future
project. It has a capacity of 6 MW and will
produce 1200 m³ of hydrogen per hour. Full
operation is scheduled for spring 2019.
The third pillar of voestalpine’s
decarbonisation pathway is the hydrogen
plasma smelting reduction research
activities in Donawitz that aims at directly
producing steel from iron ore nes. An
upscaling from 100g to a 50kg batch
operation is planned, leaving still some way
to go until a commercial scale is achieved.
Plasma smelting reduction would replace
current blast furnaces and basic oxygen
furnaces as well as coke and sinter making.
Salzgitter
Salzgitter, a German steelmaking company,
proposes a tighter schedule for its transition
to hydrogen. Already by 2025, the
company aims to reduce its carbon dioxide
emissions by 25%. By 2030, carbon dioxide
emissions shall be cut by 50% and by 2050,
the target is 90-95%. While voestalpine
sets its sights on plasma smelting reduction,
Salzgitter goes for hydrogen-based direct
reduction plants. Direct reduction plants fed
with natural gas are commercially available
and a proven technology. Feeding them
with hydrogen is expected to be possible.
Direct reduction plants replace blast
furnaces as well as coke and sinter making.
For steelmaking, current basic oxygen
furnaces have to be replaced with electric
arc furnaces.
In October 2018, Salzgitter announced
the development of a reversible high-
temperature SOEC electrolysis that should
be ready for green hydrogen production
by 2020. In regular operation, the plant
shall produce 200 standard cubic metres of
hydrogen per hour. Salzgitter includes green
electricity production in its project: next to
the electrolysis, seven wind turbines shall
be erected, three directly located on the
steel site. The hydrogen will be used in the
annealing facility, but in the long term, it
shall be used to replace coal in ironmaking.
ThyssenKrupp
In January 2019, ThyssenKrupp announced
a strategy based on hydrogen. While their
agship project until then, carbon2chem,
aimed at carbon capture and usage, they
now focus on hydrogen-based direct
reduction plants. These are planned to
replace all their blast furnaces by 2050.
The transition phase shall start in 2021
evaluating the extraction and consumption
of hydrogen in current blast furnace
based steelmaking. The company plans
Green steel Marlene.indd 2 22/05/2019 16:06:15
www.steeltimesint.com
investments of 10 billion Euros until 2050. As Germany’s largest
steelmaker, ThyssenKrupp has a signicant impact on the low-carbon
transition in this industry.
ArcelorMittal
The latest announcement on hydrogen in steelmaking came from
ArcelorMittal in March 2019. The company will build a direct
reduction facility next to its MIDREX plant in Hamburg, Europe’s
single natural gas-based direct reduction facility. They envision
demonstration scale with a capacity of 100kt/yr. In a rst step, the
hydrogen will be provided from the top-gas of the current MIDREX
plant (grey hydrogen). Later on hydrogen produced from renewable
energies may be used (green hydrogen). In contrast to its competitors,
the site of ArcelorMittal Hamburg already has an electric arc furnace
and experience in natural gas-based steelmaking. Using grey hydrogen
allows for economical operation, the company claims.
Outlook
With the announcements of ThyssenKrupp and ArcelorMittal, two
large-scale steelmaking companies have now joined the group of
smaller, but forerunning steelmaking companies that render the
possibility to substitute the use of coal with hydrogen. This is a
double milestone. For the rst time European steelmakers consider
the phase-out of coal-based blast furnaces for primary steelmaking.
Furthermore, these companies represent the majority of European
primary steelmaking companies. The carbon dioxide reductions now
discussed are more in line with the Paris Agreement than any other
propositions. The Ulcos project, for instance, aimed at carbon dioxide
reductions of 50% compared to steelmaking processes at that time.
Ironmaking based on renewable hydrogen has the potential to cut
carbon dioxide emissions by up to 95%.
However, not a single tonne of low-carbon primary steel is on the
market so far, and companies have not undertaken investments in
commercial plants up to now. Yet, ArcelorMittal claims that running
its direct reduction plant with grey hydrogen allows for economical
operation already today.
The next years or maybe even months may be crucial. Major blast
furnace capacities are due for relining. Once they have undergone this
renewal, they ought to run for another two decades. Yet, to reach
future climate targets, action should start today. With its Innovation
Fund, the European Commission aims to support the low-carbon
transition of the steel industry, but investment support is not enough.
The operating costs of green hydrogen-based steelmaking still exceeds
the current coal-based process despite the European Emission Trading
System (EU ETS) or - in other words - due to the vast exemptions
given under the EU ETS. If the EU and European steelmakers strive for
a low-carbon transition, they need to nd a market for green steel,
since it comes with a higher price tag. �
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