Which technologies will enable a cleaner steel industry?

Decarbonizing the steel industry is a crucial challenge to overcome if the world is going to meet its climate goals. Steel production contributes around 11% of global carbon dioxide (CO2) emissions, making it one of the heaviest polluting industries and a heavy-emitting sector of focus for the First Movers Coalition, an initiative seeking to aggregate demand for near-zero emissions products and services across some of the world’s most polluting industries.

The coalition’s mission is to drive investment and accelerate the scaling of the breakthrough technologies required to make these products by demonstrating a credible demand signal for highly decarbonized products.

But how can these innovative technologies be surfaced and scaled? The First Movers Coalition’s near zero steel challenge was a recently concluded global initiative by the World Economic Forum and Greenhouse, with support from partners Boston Consulting Group, Deloitte, ResponsibleSteel and RMI. It aimed at identifying which companies will supply final steel products at First Movers’ near-zero emissions thresholds by 2030, which companies seek to buy these steel products and which companies are providing the enabling technologies for highly decarbonized steel production.

The 70 submissions to this latter challenge of enabling technologies showcase solutions across several sub-categories that steel producers require to produce near-zero emissions steel. An expert evaluating panel whittled the 70 submissions to 17 top innovators based on relevance, feasibility, scalability, technology readiness and impact, with each technology sub-category having a top-ranked entry.

Hydrogen is a crucial enabler for near-zero emissions production processes across steel and other hard-to-abate industries and demand for the product is soaring. It can be produced from various resources such as natural gas, nuclear power, biomass and renewable power such as solar and wind.

Although no greenhouse gases are emitted when hydrogen is used as an energy source, its production differentiates between a “cleaner” fuel and a fuel with near-zero emissions.

Various colours describe the different types of hydrogen: green hydrogen is often created by pairing electrolysis using renewable energy, while grey and blue hydrogen are typically produced through steam methane reforming or coal gasification. Blue hydrogen is made similarly to grey hydrogen but with carbon captured from the natural gas used.

Molten Industries, a California-based company, was the steel challenge’s top-ranked green hydrogen-based submission. They focus on producing carbon-neutral hydrogen for net-zero steel using methane pyrolysis, a process in which thermal energy is applied to methane to break the chemical bond between carbon and hydrogen. As a result, graphite, a solid carbon product that can be used in lithium-ion batteries or electric arc furnace electrodes with no CO2 emissions and hydrogen gas, is produced.

The steelmaking technology that uses hydrogen is typically a direct reduction of iron ore, called hydrogen-based ironmaking or H2-DRI. In traditional blast furnace-basic oxygen furnaces, iron ore is reduced using carbon-based fuels such as coke (coal-based), heating furnaces up to 1,600 degrees Celsius. However, in direct reduction, hydrogen can also serve as a reducing agent: it reacts with iron ore to remove oxygen, yielding metallic iron, with H2-DRI processes operating below the melting point of iron of 1,200 degrees Celsius.

The highest-scoring direct reduction entry came from French company GravitHy, whose solution is powered entirely by low-carbon hydrogen. Using an integrated H2-DRI process, GravitHy can produce hot briquetted iron, a premium form of direct reduced iron for steelmaking. This hot briquetted iron can be stored and shipped long distances for use in electric arc furnaces, melters or blast furnaces to produce decarbonized steel.

A significant constraint to the commercialization of low-carbon hydrogen is the levelized costs associated with its production process. This means there are currently a handful of pilot-scale projects producing hydrogen-based steel, such as two Swedish projects: HYBRIT (a partnership between SSAB, Vattenfall, and LKAB) and H2 Green Steel, which is due to begin producing in 2025.

Scaling the supply of green hydrogen would involve reducing costs associated with electrode technologies through innovation and surfacing technologies to store hydrogen more efficiently.

Electrolysis is when an electric current is passed through an electrolyte (a solution containing ions) to drive a non-spontaneous chemical reaction. In many applications, this means splitting water into hydrogen and oxygen. Electrolysis technologies efficiently produce iron, aluminium, green hydrogen and many other materials.

Boston Metal’s Molten Oxide Electrolysis was a high-scoring electrolysis solution that creates high-purity molten iron from low-grade iron ore using only electricity. It eliminates scope one emissions attributed to steel production, reduces end customers’ scope three emissions and can be applied to any iron ore grade.

Xi’an LONGI Hydrogen Energy Technology Company also provided a high-scoring electrolyzer technology submission focusing on its new alkaline electrolyzer that continuously lowers energy consumption and improves the cost-efficiency of green hydrogen production.

Although the widespread adoption of electrolysis still faces challenges related to cost, efficiency and infrastructure development, the increasing number of green hydrogen projects means electrolysis technology is likely to continue growing in popularity.

Breakthrough furnace technologies seek to innovate the various systems, technologies and methods connected to the construction, design and operation of furnaces. Several feasible technologies already exist that could advance the decarbonization of the steel industry, such as electric arc furnaces, which are already replacing traditional, carbon-intensive blast furnace-basic oxygen furnaces in many countries.

Finnish company Coolbrook provided the highest-ranked furnace technology. Their RotoDynamic Technology is designed to generate high-temperature process heat up to 1,700 degrees Celsius. It is powered by electrification, removing the need to burn fossil fuels to create high temperatures. It can potentially remove 600 megatonnes of iron and steel-related global CO2 emissions annually.

While innovative, breakthrough technologies may drastically cut steel production emissions, carbon capture, utilization and storage (CCUS) technology allows residual emissions and emissions from traditional blast furnace processes to be captured, particularly while deeply decarbonizing solutions remain unavailable at scale due to high-cost premiums. CCUS is also a key decarbonization lever in other sectors, such as cement and aluminium production.

Australian company KC8’s “UNO MK3” solution received the highest score in carbon capture, utilization and storage challenge entries. This carbon capture solution is retrofittable to large-scale emissions sources, typically has lower CAPEX and OPEX costs than amine-based carbon capture and can centralize the regeneration unit for wide-area processing such as steel mill applications.

No one solution is a silver bullet to solve the steel decarbonization question. The variety of the 70 solutions submitted to the First Movers Coalition steel enabling technologies challenge demonstrates the plethora of innovative technologies being developed to reduce steel’s carbon footprint.

To advance decarbonization of the sector at the pace required to meet 2050 net-zero goals, increased investment in these technologies is needed to scale them, reduce their cost and implement them in steel plants worldwide. The responsibility is shared across the value chain: steel producers are required to use these technologies and end users pay a green premium while green steel remains more expensive than traditionally-produced steel.

The best steel challenge entries are also due to be added to the First Movers Coalition’s First Suppliers Hub database of near-zero emissions final product and value chain suppliers, which aims to foster connections between demand and supply players across the heavy-emitting sectors.