Posted on 20 Oct 2021
The foundations are emerging of stakeholder collaborations spanning the value chain to achieve low-carbon steelmaking, but a solution is still required to the “first mover disadvantage”, says the Net-Zero Steel Initiative (NZSI).
This disadvantage is created by wholesale steel markets, where prices are typically set by the marginal – and more emissive – producer. Multilateral solutions will be critical to unlocking the first wave of near-zero emissions steelmaking. “An immediate priority is a new, high-ambition multilateral forum between net-zero aligned governments and steelmakers to explore and find solutions to this issue,” NZSI says in a report seen by Kallanish.
More efficient use of steel could materially lower future demand, but large volumes of low-CO2 primary steel will still be needed out to 2050 and beyond. Not all steel demand can be met by recycling scrap, the group observes.
Long investment cycles mean that investments in new or existing steel plants from 2030 onwards should be compatible with a net-zero 2050 objective to avoid stranding these assets. For this to be feasible, several commercial-scale plants using near-zero-emissions technologies need to be built this decade to prove them at scale, NZSI points out.
Production technologies using 100% green hydrogen could be responsible for 40-55% of primary steel production in 2050, utilising 35-55 million tonnes/year of zero-emissions hydrogen. Hydrogen steelmaking could become competitive with carbon capture, utilisation, and storage (CCUS) technologies when prices for zero-carbon hydrogen hit $2.20-2.90/kg, which NZSI anticipates happening in the 2020s.
“To compete with unabated steelmaking processes, hydrogen prices would need to reach $0.65/kg in the absence of carbon pricing or other support, which is not expected to happen by 2050,” it adds.
Retrofitting existing blast furnace-basic oxygen furnace technology with CCUS may not be a competitive long-term strategy, as green hydrogen-direct reduced iron route steelmaking will become increasingly competitive.
New roles for the blast furnace may yet emerge in a net-zero economy. “Should a bio-based replacement for coke be developed or closed-loop ‘circular’ carbon value chains be established, the blast furnace may prove to be a cost-efficient source of zero-emissions feedstock for the chemicals industry and/or a valuable source of negative carbon emissions,” NZSI concludes.
Source:Kallanish
