Green steel: the good, the bad, and the inevitable
Steel is fundamental to modern life, forming the backbone of countless industries and infrastructures. From the bridges we cross to the buildings we live and work in, steel's versatility and strength make it an essential material in our daily lives.?
However, one aspect that may not be immediately apparent is steel's role in our transition to a sustainable future. Every green energy technology we adopt – whether wind turbines, solar panels, electric vehicles, or hydrogen production – relies on steel. Consequently, the steel industry, being one of the most significant emitters responsible for approximately 8% of global CO2 emissions, faces the paradox of needing to produce more steel to support decarbonisation efforts.?
Is more less??
The reality is that the production of steel is inherently linked to the technologies essential for our energy transition. As we innovate with clean energy sources and advanced manufacturing methods, the demand for steel continues to rise.??
This means that to build a decarbonised future, we must find ways to produce steel more sustainably. Achieving this goal, however, is complex due to the energy-intensive nature of steelmaking.?
The global puzzle?
The traditional steel production process, heavily reliant on coal and coke, is exceptionally carbon intensive. For every tonne of steel produced, almost two tonnes of CO2 are emitted.??
The steel supply chain is a testament to this complexity. It spans from the extraction of iron ore to the production of finished steel products. In Australia, for example, we export over 900 million tonnes of iron ore but produce less than 5 million tonnes of steel domestically. This means our exported materials contribute to global emissions beyond our borders, illustrating the worldwide nature of steel production and the challenges in reducing emissions at various stages of the supply chain.?
Additionally, steelmaking relies on different types of coal: thermal coal for electricity and coking coal for steel production. Understanding these distinctions is crucial for assessing their impact on decarbonisation. The industry is exploring alternatives like clean hydrogen and renewable electricity to reduce dependence on coking coal. However, this transition faces technological and infrastructural constraints.?
So, what is “green”???
A major challenge in the decarbonisation journey is defining "green steel." Currently, there is no universally accepted definition or greenhouse gas accounting system for steel products. The International Energy Agency proposes a target of 400 kilograms of CO2 per tonne of steel, which is a significant reduction from the current average. For WWF Australia, green steel refers to a fossil-free production process, ideally using hydrogen produced through electrolysis powered by renewable energy. This shift also presents opportunities to enhance community engagement, biodiversity protection, and environmental standards. ? ? However, while hydrogen-based production is a promising approach, decarbonising steel is not a quick fix. Steelmaking facilities have long lifespans and high capital requirements, making rapid changes difficult. Additionally, the hematite ores – comprising 96% of our exports – contain impurities that make them unsuitable for advanced green steel techniques without significant technological progress.???
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Competitive edge?
As global demand shifts toward more sustainable products and consumers are willing to pay a premium for them, the pressure to adopt greener practices will intensify. Green steel is becoming a crucial component of this transition.??
For Australia, adopting green steel production methods presents a unique economic opportunity. By investing in renewable energy and green hydrogen technologies, Australia has the potential to emerge as a leader in the green steel market, boosting the competitiveness of Australian steel on the international stage. This advancement will undoubtedly drive innovation, create jobs, and stimulate economic growth, particularly in regions strongly dependent on mining and heavy industry.??
Moreover, the shift towards green steel can help mitigate the economic risks associated with continued dependence on fossil fuels. As carbon pricing and stricter environmental regulations become more prevalent globally, industries that do not decarbonise may face higher costs and reduced market access. By proactively embracing green steel practices, Australia can protect its economic interests and ensure long-term sustainability.?
What’s next??
The pursuit of green steel is both an environmental imperative and a strategic economic opportunity. As the world moves toward a low-carbon future, Australia must leverage its abundant renewable energy resources and technological expertise to decarbonise the steel industry. By doing so, we can lead the way in green steel production, setting a global benchmark for sustainable industrial practices and contributing to a better future for generations to come.? ?
Please reach out if you would like to discuss this topic further. You can also learn more about how we at GHD assist our clients in navigating their transition journey towards low-carbon steel production here: https://info.ghd.com/green_steel ?
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Business Owner - Highlight Sustainability | Volunteer Advocate
2 个月It was an informative night on the recent developments so far. Thanks for speaking Mike.
CEO and Managing Director at Centre Of Decommissioning Australia (CODA) ? Director at Ulfire Pty ? Project Virtual Teams expert
2 个月Its nice to see your recognition that this will be a long road and not an overnight change. With so much investment in place in existing facilities it will be a decadal process to change over. I would like to see less of a "hydrogen is the only solution" approach across the value chain or as you put it "ideally using hydrogen" and a more nuanced view of available energies and technologies that could help with the decarbonisation of the steel industry. One other lesson learned many years ago in the steel industry is to colocate as much of the processing as possible, so convert the ore to finished steel product (rod/bar/plate etc) in the same plant. It saves massive amounts of energy and allows for many synergies across the process flowsheet. There are several pieces of relatively low hanging fruit in there too such as growing Australia's EAF capacity now to do more steel to steel processing on shore
Focused, Strategic & Creative, passionate about proactive strategies to meet climate change, expert in commercialising digital innovations and deep tech research into more than 50 industrial sectors
2 个月Well… in my opinion what we need is to drill down past the headlines just like we have to do to build new companies. So yes we need renewable energy but how much per hour/ per day. Does it have to be UPS all day, or is the processing done at time intervals. How can the temperature required be achieved? This would help to identify the amount of renewables and the structure of the LDES set up and MWh. So do this with each of the parts and then set some real goals. Green steel is the final goal but what if the first step is doing something that reduces emissions by 10% and then another 10 while still maintaining high quality production. It’s not easy but it is possible and in the end if our final analysis is that it won’t in fact work financially find another path…spend the money on saving our forests from bushfires or building large scale soil sequestration. But one way or the other we must move from aspiration to action.