Green steel - something you really need to understand

This week's Sunday Brunch is on Green steel.

Green steel - do you care ? You might think - I don't work in the industry, and I don't invest in or lend to it (and probably never will), and its very technical, so no, not really. Its a "nice to know about" sector, but it's not that important. If you are deeply into the challenges involved in decarbonising our society, or you work in an industry that uses steel, you might care. But you may think, its a tough challenge to get involved with.

We think you are wrong - so stick with me with for just a few minutes. Not only is it an important sector from a GHG emissions perspective, it could also be the trail blazer for a number of other important transitions. Why not read on ...

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So back to green steel. The last few years have seen a dramatic change in the outlook for green steel, especially in Europe. Less than five years ago the consensus on green steel was that “investments in zero-carbon alternatives still come at prohibitive commercial risk”. Now, nearly all European steelmakers have announced plans to replace their old, high carbon emitting blast furnaces with direct reduction iron and electric arc furnaces. And we have realistic plans for production at scale by the end of this decade.?

Why should you (& your government/company) care. The first obvious answer to this question is ...the steel industry is responsible for about 6-7% of man made GHG emissions. This is as large as all passenger cars in the world. Lets pause for a moment - it's as big as the passenger car market.

Its worth thinking about how much attention switching to electric vehicles (EV's) gets. We all know about Tesla, and many of us will know about the moves being undertaken by the European automotive OEM's, such as VW, to shift production away from fossil fuel cars to EV's.

But thats not all. Progress on green steel also suggests ways that similar progress might be possible in other hard to abate sectors such as cement and chemicals. This is particularly true for those activities where fossil fuels are not used as an energy source (ie creating heat) but instead are feed-stocks or a part of the chemical process.

And of course, green steel will be a big driver of the demand for green hydrogen.

However, as with nearly all sustainability transitions, this shift will bring challenges. After all, these are not called hard to abate sectors for nothing. An obvious one is cost, but there are also some technical and practical challenges to overcome.

Plus, the steel making process, like many heavy industries, is incredibly complex. Its not just a case of throwing some iron ore, coking coal, and limestone into a furnace. Companies have invested a lot in accumulated knowledge and infrastructure.?Changing processes from what they know to something new is a material "step into the dark". Learning how to create green steel in a cost effective way will involve hundreds if not thousands of small improvements - fine tuning production processes, inputs and operating practices.?

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