Posted on 20 Dec 2021
In a series of recent reports, China Baowu Steel Group (Baowu), the world's largest steel producer, has set out a roadmap for how it intends to reach carbon neutrality across its vast operations by 2050, a far more ambitious goal than the central government is working to achieve.
Shanghai-headquartered Baowu has been leading the drive towards carbon reduction in China's steel industry, emphasizing its commitment for achieving carbon peak and carbon neutrality but until now, its bold pronouncements have been rather light on detail.
But in a series of reports published on its official Wechat account over the past few weeks, Baowu has given tentative details about how it intends to restructure its business to meet carbon neutrality, the first major Chinese steel enterprise to do so. Indeed, an overall plan for the Chinese steel industry as a whole is yet to be announced.
Baowu's move is significant for another reason. China's President Xi Jinping announced in September 2020 that China will aim to hit peak emissions before 2030 and for carbon neutrality by 2060. Baowu's targets are more ambitious, namely to reach carbon peak 2023 and carbon neutrality by 2050, a decade earlier than the national target, as Mysteel Global reported.
Achieving such a goal will be a mammoth undertaking, given Baowu's size and geographic spread. The steel giant produced 115 million tonnes of crude steel in 2020 via its 17 production bases nationwide that stretch from North China's Shanxi to South China's Guangdong and from Northwest China's Xinjiang to East China's Zhejiang.
Baowu's steel production is mainly BF-based, while electric arc furnaces (EAFs) supply only 6.5% of its output, it disclosed in the reports. EAF steel production is widely viewed as a much environmentally-friendly steelmaking method than the BF route, as the carbon emissions from the former are only 400-800 kg/t for per tonne of steel produced while making one tonne of steel using a BF generates 1.8-2.2 tonnes of emissions, Mysteel Global notes.
"At Baowu, we could not rely simply on one or two methods to realize the (green) transformation of the entire Group, as resources and environmental conditions vary a lot among the production bases in different regions," Chen Derong, Baowu's chairman, was cited as saying in the report.
Baowu's steelworks in Shanghai
Source: Baowu's Wechat account
To achieve net-zero emissions by 2050, Baowu intends to pursue six parallel strategies, namely maximize energy efficiency, recycle metallurgical resources, aim for near net-shape manufacturing, adopt hydrogen-rich, carbon recycling BFs and hydrogen-based shaft furnaces, and pursue carbon capture and utilization, according to the reports.
Baowu has been exploring hydrogen-rich, carbon recycling BF steelmaking technology at its Xinjiang steelworks for several years. "The technology is the key focus of our carbon reduction work at the moment," the company stressed, as this will determine the continuation of BF-based steelmaking, the technology which currently produces nearly 94% of Baowu's steel and dominates the Group's asset values.
The direct reduction iron (DRI) process in a hydrogen-based shaft furnace, on the other hand, is a steelmaking method that could achieve "close to net-zero" emissions, according to Baowu, a belief that contributed to the mill's decision to abandon plans to erect two more blast furnaces at its greenfield Zhanjiang steelworks in Guangdong and instead, construct a hydrogen-based shaft furnace. The shaft furnace will be linked to a high-powered EAF and continuous caster in a compact strip caster, capable of producing 2 million tonnes/year of thin slab, the report said.
Taking this route will require the use of higher-grade iron ore - above 65% Fe grade, the report emphasized. Lower grade iron ore feeds would generate a considerably larger volume of slag, which is "unbearable for any normal EAF", it said.
Regarding metallurgical resources recycling in its plan, Baowu aims to raise the proportion of steel scrap in its converters to 50% from the maximum of 30% at the steel shops in its steelworks now.
Source:Mysteel Global
