13 Steel
Today, the U.S. only accounts for about 5 percent of global steel production capacity.
If the U.S. is to achieve Biden’s vision of a new deal for America, complete with infrastructure upgrades, domestically sourced materials and net-zero emissions, the country needs not only to reverse its flagging fortunes in the steel market but also to foster new technologies that will enable it to produce “green” steel with a minimum of carbon dioxide emissions. Such new technologies are now under development, although their entry into the marketplace is going to require time, investment and government support.
Steel production is one of humanity’s most environmentally destructive activities. Even in its diminished state, the U.S. steel industry releases more carbon dioxide emissions than any other domestic industry — nearly a ton of carbon dioxide for every ton of steel produced.
That’s largely because steel-making relies on coal and natural gas for most of its hefty energy consumption.
Steel industry emissions must be mitigated at first by eking out small improvements to a wide variety of production stages. Simply using steel more efficiently is the first step. For example, some new forms of concrete are structurally stable without the use of steel reinforcing bars. Also, other materials can be substituted for steel; one young company called Inventwood is developing a process that transforms wood into a material strong enough to be used in place of steel.
Another technique is to recycle more steel. According to the International Energy Agency, producing steel from recycled scrap requires only one-eighth the energy associated with producing steel from iron ore. Scrap accounts for about 70 percent of the raw metal input to U.S. steel production today, a figure that can be boosted.
But that alone won’t obviate the need for new steel mills, since future demand for steel will outpace past supply. Instead, the U.S. will have to make new steel from iron ore and mitigate the emissions stemming from that process.
To better understand the options for improvement, let’s review how steel is typically made. First, iron ore and fossil fuels (usually either specially refined coal or natural gas) are put in a furnace, where the fuels are burned to produce heat, carbon monoxide and carbon dioxide. The carbon monoxide combines with oxygen from the iron oxide contained in the ore, forming carbon dioxide and leaving behind a quantity of nearly pure iron. That iron is then conveyed either to a specially lined vat where oxygen is blown through liquid iron or to an electric furnace. In these secondary vessels, the iron is further purified and combined with small amounts of carbon to make steel.
One way to mitigate the carbon emissions from this process is to capture carbon dioxide from the furnace and sequester it in underground reservoirs. Most carbon-capture facilities don’t actually sequester the carbon dioxide they capture. Instead, they sell it to oil companies that then pump it underground to force oil to the surface, a process known as enhanced oil recovery (EOR). The only operating steel plant using carbon capture at scale, the Al Reyadah plant in Abu Dhabi, employs this technique. It’s not clear that EOR sequestration actually reduces emissions on a net basis if the calculation includes the carbon dioxide released by burning the oil that’s produced. It’s unlikely this technique will result in significant reductions of net emissions.
Other techniques include improving the efficiency of the ore processing furnaces and replacing coal furnaces with natural-gas furnaces. These techniques will only provide marginal emission reductions.
New steel-making technologies
H2 DRI
The two leading steel-making technologies with the potential to nearly eliminate carbon dioxide emissions use a common chemical process known as electrolysis.
One technology that’s well on its way is called “hydrogen direct reduced iron” (H2 DRI). It is now being demonstrated in Sweden, Japan and Germany. H2 DRI substitutes hydrogen (preferably, but not necessarily, made with clean energy) for the coal or natural gas used in the typical furnace process. In a DRI furnace, the iron ore is heated but not to the point of melting. Hydrogen then passes over the hot ore, combining with oxygen liberated from the iron oxide to form water and leaving relatively pure iron behind. Typically, that still-hot iron is then transferred to an electric furnace for additional processing to turn it into steel. If the electricity used to produce the hydrogen and run the furnace comes from non-carbon-emitting sources, then the overall process results in little to no carbon dioxide emissions.
In Sweden, a joint venture dubbed Hybrit (comprising utility Vattenfall, iron ore processor LKAB and steel maker SSAB) is running a pilot H2 DRI plant. This spring, it started to use hydrogen produced via electrolysis from electricity generated by fossil-free sources. (This being Sweden, those probably consist of nuclear and hydropower, with a bit of wind power sprinkled in.) Building a full-scale H2 DRI plant, including electrolyzers to produce hydrogen from clean electricity, costs billions of dollars, and the process consumes prodigious amounts of electricity. Its economics strongly depend on the cost of that electricity and the value of the avoided carbon dioxide emissions. According to the consultancy McKinsey, H2 DRI is not expected to be cost-effective in Europe until sometime between 2030 and 2040.
MOE
The other technology under development, molten oxide electrolysis (MOE), also employs electrolysis. But in this case, it’s applied directly to the iron oxide ore by placing it in an electrolytic cell filled with a mineral-bearing solution. An electric current is run through the solution, heating it up beyond the melting point of iron, and separating oxygen from iron. If the electricity used to power the MOE process comes from clean sources, the steel can be made with virtually no carbon dioxide emissions.
In the U.S., MOE is being developed by Boston Metal, a company spun out of the Massachusetts Institute of Technology. Like H2 DRI, MOE economics are heavily dependent on the cost of clean electricity. Boston Metal is currently gearing up to build its first pilot plant in Massachusetts, and it is looking into building a larger facility in Quebec or another location with cheap hydroelectricity.
Prospects
Of the two technologies, H2 DRI is clearly further along, with a pilot plant in operation and a full-scale plant in development. MOE has some intriguing advantages for the U.S. market, however. First, it’s more efficient, requiring somewhere between 15 and 30 percent less electricity than H2 DRI per ton of steel output. Second, MOE facilities can be constructed in much smaller increments than H2 DRI, although exactly how small isn’t clear just yet. That’s a big deal in the U.S., where a diminished steel industry is unlikely to invest billions of dollars for a new steel plant based on new technology.
Furthermore, Boston Metal’s electrolysis cells are so clean that developers would have far more flexibility in where they’re located. For example, they could be placed near inexpensive sources of clean electricity or iron ore, or maybe even in Pittsburgh. Both technologies are going to take at least a decade before they’re ready to start claiming significant amounts of market share, but over the long run, the odds of Boston Metal’s MOE technology gaining traction in the U.S. market appear to be better.
Because steel constitutes just a small portion of most products of which it’s a component, that price premium is likely to be small. For example, the International Energy Agency estimates that using green steel would increase the cost of a midsized car by around 0.1%