Pathways to clean steel

Power Points

Decarbonizing steel is critical to bending the emissions curve, and corporations have a very important role.

By Sarah Golden

June 8, 2023

Image via Shutterstock/kaband

Steel is the backbone of modern infrastructure and one of the world's most widely used materials. It is also one of the largest culprits of the climate crisis, responsible for about 8 percent of total global emissions.

Yet despite its significance, there is still relatively little action from corporations to address this carbon bomb.

The good news: Technological pathways are emerging to decarbonize steel. All that's needed is investment and dogged commitment from public and private partners to create meaningful demand signals.

The majority of steel is made in blast furnaces. The process requires two inputs: iron ore and coal. They lead to an output of molten iron and carbon dioxide (as well as other impurities that may be in the ore, including sulfur, phosphorus and silicon).

This process produces an impressive amount of emissions — for every ton of crude steel, close to 2 tons of CO2 is created. What's more, the global appetite for steel is on the rise. Demand in 2023 is expected to increase 2.3 percent year over year, up to 1.82 billion tons, according to the World Steel Association.

Strategies to reduce these emissions could be broadly divided into five buckets:

Of these pathways, I pick electrification. Of the five options, only green hydrogen and electrification have the potential to remove emissions from the equation entirely, blazing a logical path to truly clean steel. And between hydrogen and electrification, the latter is more direct use of clean energy (instead of using electricity to make hydrogen to make steel, you could skip a step and use electricity to make steel). What's more, I worry about the many competing interests in clean hydrogen.

I spoke to Adam Rauwerdink, vice president of business development at Boston Metal, who elegantly summed up this sentiment:

"It really doesn't make sense to use the limited commodity that's green hydrogen for steel production, if you can skip the middleman and just use the electricity directly. I certainly believe in green hydrogen, just not for steel. Use it elsewhere."

The single most important thing corporations can do to accelerate the adoption of clean steel is sign procurement deals. These will help signal demand for clean steel and speed along the complicated process of incorporating new materials.

As of today, I am aware of three procurement commitments for low carbon steel:

There are coalitions aiming to signal demand for cleaner steel — such as SteelZero, Responsible Steel and the First Movers Coalition — but when it comes to corporations putting pen to paper for specific procurements, the list is embarrassingly skinny.

Are there clean steel procurement deals I’ve missed? Are you a company that wants to procure clean materials, but you’re hitting challenges? I want to hear from you: [email protected].

[Want more great analysis of the clean energy transition? Sign up for the Energy Weekly newsletter.]

View the discussion thread.