Sweden’s H2 Green Steel lands $189m investment

Matt, I am a big advocate of recycling and propose the vision of an almost infinite re-utilisation of steel, which is supported by the low-carbon advantages of the secondary steel route.  Recycled steel could save 86% of greenhouse gas (GHG) emissions, 85% of energy, 76% of water pollution, and 40% of water consumption by using the electric arc furnace (EAF) route of steel making, compared to the route of primary extraction and blast furnaces (BF). A main difference between EAF and BF is the latter needing energy-intensive processes of iron ore extraction and coke both as a reductant and as a source of thermal energy, while EAF uses scrap and electricity benefitting from renewable energy / green hydrogen supply. In line with the UK Climate Change Committee recommendation of setting targets for ore-based steel-making to reach near-zero emissions by 2035, the newly established UKRI Centre on Circular Metals (CircMet) has the mission to make the UK the first country in the world to realise a fully circular use of metals.

Although there remain barriers to overcome

Key barriers are in the domain of economics, business, and technology:

Pricing better. Prices for iron ore, steel, and scrap need an environmental overhaul. International prices have doubled over the last twelve months according to IMF analysis. However, volatility has been the dominant feature over decades. Future price expectations are highly uncertain. Scrap prices typically follow the commodity prices, but production costs (especially in the case of EAF) are highly dependent on electricity prices, which in the UK are significantly higher than for many of our European competitors. 

Supply chain innovation. Scrap producers, the steel industry, and downstream users need a better alignment. Making high quality recycled steel requires better standards for sorting and monitoring along value chains. 

Demand stimulation. the need to establish green buyer alliances which could establish lead markets for new low-carbon steel. Public procurement of low-carbon steel to be used in public works and infrastructure can also create certainty that there is a market for producers, encouraging them to invest. 

Technological challenges. Increased traceability of steel products and better sorting and monitoring processes for scrap steel can ensure high quality secondary steel that can meet carbon targets while ensuring high quality products.

Julian, today, most crude steel is produced by reducing iron or using coal. The industry’s blast furnaces are highly energy intensive and rely on fossil carbon as a fuel and reduction agent. For each tonne of steel produced in the conventional blast furnace-basic oxygen furnace route, between 1.5 and 3 tonnes of fossil carbon are released into the atmosphere.

Essentially, green steel is the manufacturing of steel without the use of fossil fuels.

So-called “green hydrogen” is one solution that could help reduce the steel industry’s carbon footprint.

“When burned, hydrogen emits only water. And if that hydrogen is produced via electrolysis using just water and renewable electricity, then it is completely free of CO₂ emissions.

Electric arc furnaces are another option. These furnaces are gradually replacing traditional ones, but they are not always powered by renewable sources, and therefore the steel they produce may not always be green.