Ferro-chrome decarbonization: Taking care of details is key - Outokumpu

As the world moves toward a shared goal of net-zero emissions, Claire Patel-Campbell talks to Outokumpu’s head of group sustainability, excellence and reliability about the place of the energy-intensive and high emissions ferro-chrome industry in a greener economy

Energy has been at the top of the agenda for ferro-chrome producers - perhaps more than ever over the past couple of years - with electricity prices spiking at the end of 2021 and into 2022 following the global squeeze on supplies.

This was exacerbated in the latter part of 2022 with the onset of the energy crisis in Europe, pushing costs up for ferro-alloys and steel producers alike, and eventually pushing prices for ferro-chrome down, as demand from end users declined.

There were also various ferro-chrome furnace closures as a result of rising energy costs, including at Finland-headquartered Outokumpu, a producer of both stainless steel and ferro-chrome, although it has since reopened its shuttered furnace.

The producer position

In the production of stainless steel, which is a major user of alloys, most carbon emissions are Scope 3, or indirect, emissions - generated from purchased goods and services among other things - so it makes sense to take care of the details.

And that is the attitude taken by Outokumpu, according to the company’s head of group sustainability, excellence and reliability Juha Erkkilä.

“Generally speaking, in stainless steel production, more than 70% of emissions are so-called Scope 3, with most of it coming from the alloying elements - whether that’s nickel, silicon, chrome, lime or whatever, outside your own emissions portfolio,” Erkkilä told Fastmarkets.

“If you look at Outokumpu’s emissions portfolio as a whole, the use of coke in our ferro-chrome production causes roughly half of the direct CO2 emissions.”

To paint a bigger picture, he said that last year about 94% of the raw materials that Outokumpu put into its meltshop was recycled steel. But the small percentage that remained was responsible for a substantial portion of all its emissions.

“If you want to reach climate targets, you need to have all these aspects covered,” Erkkilä said.

If you want to reach climate targets, you need to have all these aspects covered

For those stainless steel producers that purchase ferro-chrome from external sources, there is, of course, a choice about where the alloy is purchased, but ultimately, that choice is beyond the control of the stainless producer.

“We’re a stainless steel producer and we’re also producing our own ferro-chrome. That’s important because of the whole discussion around decarbonization and the race toward supplying stainless steel - or steel in general, for that matter - with as low a carbon footprint as possible,” Erkkilä said.

“For stainless steel, chrome plays a crucial role because that’s what makes it stainless. You need to get it from somewhere and it’s of the highest importance that you have a low carbon footprint in ferro-chrome production,” he said.

As an integrated producer of both ferro-chrome and stainless steel, Outokumpu is not unique. But it is making use of its position to move toward lessening its carbon emissions and overall energy consumption across its value chains.

“Traditionally, if you purchase ferro-chrome from someone else, you get it in a solid state and you have to put a lot of energy into it to melt it down again. But we can also use ferro-chrome in a molten stage in our own operations. That gives us a huge advantage,” Erkkilä said.

With the use of fossil coke in ferro-chrome production responsible for about half of the company’s direct carbon dioxide emissions, the need to decarbonize production of the alloy becomes all too apparent, he added.

“It’s a key element in our decarbonization journey that we’re decarbonizing ferro-chrome production.”

Current processes and projects

As it stands, Outokumpu is taking advantage of the technology available to it, including its ferro-chrome operations, with a view to making sure it is as efficient and low-waste as possible.

“The other part is that we’re using the best-available technology with closed submerged-arc furnaces. As a by-product of those processes, we create high-quality carbon monoxide gas that can be used as a fuel in other processes within the integrated steel works and other on-site processes, such as our pre-heating furnaces or our sintering plant,” Erkkilä said.

“We can use all the gas that the production process itself generates, so there’s nothing going to waste. That’s not the case in open or semi-open ferro-chrome production.”

Beyond this, a major area of focus within ferro-chrome production at Outokumpu is the shift from traditional fossil coke as a reductant toward using bio-based alternatives.

“The change towards bio-reductants is the most meaningful one [for us],” Erkkilä said. “For other ferro-chrome producers, that’s not necessarily the case. In many instances, energy alone has the biggest CO2 impact at the moment, but once the energy footprint becomes lower, then the impact of reductants becomes the largest source of CO2 emissions.

“We’ve been doing intensive research and development work around bio-reductants. Our philosophy has been that we would take forest industry sidestreams - that is, sawdust and bark - and other streams that are mostly being incinerated,” Erkkilä added.

He said the aim was to take that low-value stream and turn it into bio-coke, which has a very high carbon content. And then further agglomerate it into something that could replace traditional coke.

“The change from fossil coke to bio-reductants would mean the carbon monoxide created at the ferro-chrome furnaces would also be a biogas,” Erkkilä said.

According to Outokumpu’s latest annual financial report, the company is applying for €25 million ($27 million) in investment support for a bio-coke and bio-methane plant at its operations in Tornio, Finland, with a view to potentially cutting carbon dioxide emissions by more than 200,000 tonnes per year.

“We’ve also identified opportunities to produce bio-methane along with bio-coke production – we now have an ongoing investment study where we have environmental impact assessments and the permission side is being worked on,” Erkkilä said.

“We’ve applied for some possible funding for that project with the aim of building our first facility. It would be a large-scale facility that would produce bio-coke and bio-methane, located in Tornio [in Finland, where ferro-chrome is produced.]”

With the investment the company is now planning, the aim is to have a decision within this year, after which it would take two years to build the facility, meaning that, by 2025, it could be up and running.

The bio-methane would fit directly into the company’s steel production, Erkkilä said, and would serve as a potential replacement for liquid natural gas, currently used in various processes across the company.

Outokumpu is also working on digitizing its processes, which began at its Tornio operations about two years ago.

“It proved very successful on the stainless side, where we developed methods to improve how different processes are run,” Erkkilä said.

“For example, [we have used digital tools to look at] how long to keep an arc in an electric-arc furnace and how to curb different phases in the reheating furnaces to ensure they are running in the most efficient way. Now we’ve taken these digital tools to ferro-chrome,” he added.

This has produced benefits in terms of raw materials efficiency, with what the company uses, in what quantities and under what conditions. And also how much energy is needed to put in to run the process, he said.

“The basis that we’re working on is very good, but it can still be improved. It could be, for instance, optimizing the preheating temperatures in a way that best supports the raw materials mix that’s coming through, or the utilization of carbon monoxide so that we minimize the amount that would go to waste,” he added.

The company is also doing constant research and development, Erkkilä told Fastmarkets, and has trials running at its furnaces using different recipes for ferro-chrome production.

“It’s ongoing already and has been for a couple of years at various stages of our processes,” he added.

Outokumpu also operates the Kemi chrome ore mine, 20km north of its operations at Tornio, and has said that operation will be carbon neutral by 2025.

“That’s the ‘Northern Star’ to guide us on our journey towards carbon neutrality - we start where our production starts and that’s at the mine. That leads to a lower carbon footprint for our ferro-chrome, not only for our own use but also for what we sell.

“For the mine, it’s about shifting to low-carbon electricity entirely, electrifying some of the machinery, changing to bio-based fuels in some of the remaining machinery, and investing in new equipment allowing for carbon neutrality.”

Across its operations, including ferro-chrome, Outokumpu is focusing on improving its overall energy efficiency, and with that in mind, it announced at the end of last year that it would would invest specifically in this area during 2023 and 2024.

In November last year, the company made the decision to prioritize investments to improve energy efficiency, and later confirmed it would grow capital expenditure related to this by €40 million for 2023 and 2024.

By the end of 2024, its goal is to improve energy efficiency across the company by 8% compared with the level during the period from January to September 2022. According to Outokumpu, this would represent an energy saving of about 600,000 MWh - equivalent to the annual electricity consumption of 15,000 households.

“We’re in the process of coming up with projects that will further reduce our energy usage, whether it’s electricity or gas,” Erkkilä said.

The importance of low-carbon electricity

For many ferro-chrome producers globally, energy - and where it comes from - is the biggest contributor to emissions.

Access to low carbon electricity - whether from renewable sources such as wind or solar or from non-fossil fuel sources such as nuclear - is therefore becoming an increasingly important consideration across the value chain.

Some debate remains over the viability of nuclear energy in the long term, including questions over what to do with spent reactors, and it cannot really be classed as renewable given its reliance on mined materials, but access to nuclear energy has nonetheless been valuable to Outokumpu.

Lifecycle emissions from nuclear energy are much lower than fossil fuels, for example, and only a tiny amount of fuel is required to produce the same amount of electricity as coal-fired or gas power stations.

“We have good access to nuclear power and that’s at the core of our energy mix. The biggest chunk of our energy comes from nuclear,” Erkkilä said.

The company has also invested in renewable energy and signed a 10-year power supply agreement for renewable wind power with Swiss electricity producer Alpiq in February 2022, with deliveries beginning in January 2023.

“In our case, we already have excellent access to low-carbon electricity [and] that’s a huge portion of our energy mix. If you talk about Outokumpu globally, we are already at 86% zero-carbon electricity,” Erkkilä said.

“But if energy is produced with coal, it’s natural that CO2 emissions linked to the energy will be substantially higher,” he added.


There have, of course, been challenges along the way, not least the onset of the energy crisis in Europe, caused by Russia’s invasion of Ukraine and the extreme increases in energy prices that followed.

“I think the energy crisis has been one of the biggest challenges [and we had] to shut down one of our ferro-chrome furnaces from September until the beginning of this year,” Erkkilä said.

“As a result, we’ve been doing energy optimization on our ferro-chrome furnaces, which means we’re producing when the energy price is most beneficial. We announced in January that we would reopen the furnace that was closed earlier than anticipated, but we’re still doing energy optimization [because] prices are still fluctuating.”

The company’s industrial processes are most efficient when they are running on a constant basis, Erkkilä said, so the increase in stops and starts may impair efficiency.

There have also been challenges in Outokumpu’s efforts to move away from fossil coke, given the different characteristics of bio-coke.

“I wouldn’t say specifically that the end product would be different, but [it is true] that it’s most likely that the 100% replacement [of fossil coke] in ferro-chrome production might be very difficult to achieve. There are process-related restrictions to it,” Erkkilä said.

“Bio-coke has substantially different characteristics to fossil coke. There are benefits to it - the sulfur content is substantially lower, which means lower sulfur oxide emissions. But there are also some restrictions to do with mechanical characteristics or thermo-chemical properties.”

Even with these restrictions, however, Outokumpu continues to believe that a substantial percentage of fossil coke can be replaced.

“What that exact share will be is something we’re still looking into, but we have quite a good understanding at least,” Erkkilä said.

And even with the challenges the industry faces, the shift towards decarbonization and a greener economy is inexorable, meaning changes must happen.

“If you look at the importance of ferro-chrome, the big picture is that the steel industry and industries that use steel as a raw material are moving toward zero carbon,” Erkkilä said.

He added that this was especially true in stainless steel, “where the alloying elements make up the biggest proportion of emissions and [I think] that’s something that has been neglected when talking about carbon footprints.”

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