How the steel business is being transformed by green steel

 

 Steel is used extensively. Since around 200 years ago, it has been the metal that is most frequently utilised, and it plays a significant role in practically all of the infrastructures that support our modern industrial society. Its value chain supports almost $3 trillion in economic activity and tens of millions of employment. Unfortunately, with an approximate 8% contribution to atmospheric greenhouse gas emissions, its production process is second only to electricity generation. Like so many other mature organisations today, the actors in the steel industry are being forced to prioritise enhancing sustainability as a result of social, environmental, and regulatory concerns.

As companies consider how to achieve the long-term goal of producing steel with net-zero emissions throughout the entire value chain, failing to develop a decarbonization strategy and begin meeting greenhouse gas reduction targets now could negatively affect the industry's reputation and future value.



Investments in new technologies are anticipated to generate large returns.

The finished, refined product is produced using the existing standard blast furnace techniques, which also involve consuming a substantial amount of coking coal. Despite the fact that the most economical way for producing virgin steel is still in use, there is a considerable public, political, and commercial interest in promoting the creation of steel products that are significantly more environmentally friendly. The industry has launched numerous pilot plants to test out novel manufacturing techniques and cutting-edge technology as a result of these difficulties, and has given priority to the creation of decarbonization programmes.

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Innovation across the entire steel production value chain

Since their iron ore exports supply the raw materials for the steelmakers' blast furnaces, large iron ore mining companies have also developed an interest in green steel. In fact, blast furnace emissions would count as scope 3 emissions for extractors who have made decarbonization commitments to their shareholders and stakeholder groups. Fortescue Metals aims to begin producing green hydrogen for use in steel production commercially as early as 2023 in order to start achieving its 2030 carbon neutrality objective for Scope 1 and 2 emissions. This would occur ten years early than expected.



The ambition of iron ore miners to process close to their operations and export low-emission, hot briquetted iron is an intriguing new dynamic in the steel value chain. In the past, companies produced 70% of the steel using ore that was imported from other countries. If countries like Australia and Brazil, for instance, processed their iron ore into higher-value "Green HBI" and exported it directly to end-user markets, the market dynamics and the value chain for steelmaking would undergo a significant change. The possible decoupling in this value chain would then officially start at this point.