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Be it investing in clean energy power sources to cut emissions or retrofitting legacy plants with carbon capture, utilization and storage technology, both electric-arc furnace (EAF) and blast-furnace (BF) reliant producers are investing aggressively in green technologies.
This drive comes while downstream customers, including the automotive industry, exert pressure on steel producers to reduce carbon emissions.
Integrated producer Cleveland-Cliffs said on Friday October 13 it had joined the Midwest Alliance for Clean Hydrogen (MachH2), a multistate alliance of public and private entities which has been awarded up to $1 billion in funding from the US Department of Energy (DOE) under the Bipartisan Infrastructure Law to develop a regional clean-hydrogen hub in the Midwest.
“MachH2 is expected to generate numerous sources of clean hydrogen production across the US Midwest, including in Northwest Indiana near Cleveland-Cliffs’ two largest steel plants, Indiana Harbor and Burns Harbor,” the Cleveland, Ohio-based steelmaker said in a press release, noting that the company is currently constructing a pipeline to bring hydrogen from the fence to Indiana Harbor BF No.7, the company’s largest BF.
Global steel producer ArcelorMittal is also a member of MachH2.
Developing clean hydrogen is regarded as a substantial step in the decarbonization of BF-based steel production, and Cliffs had previously said the high cost of its implementation remains a barrier to widespread adoption.
Cliffs had completed a hydrogen injection trial at its Middletown Works BF in May this year; the hydrogen gas working as an iron-reducing agent in the BF.
Nucor Corp said on September 27 it is partnering with Helion Energy and investing $35 million to develop a 500-megawatt fusion power plant, which will offer baseload zero carbon electricity directly to a Nucor steelmaking plant. This project has a target date of 2030.
The Charlotte, North Carolina-headquartered steelmaker followed this news by launching on October 2 a “Made for Good” campaign to highlight its decarbonization credentials.
In August Nucor said it had entered into a power purchase agreement for 250 megawatts of renewable energy from Sebree Solar for a solar project in Henderson County, Kentucky.
This news came just a week after rival steelmaker Steel Dynamics Inc (SDI) said on July 31 it had signed a renewable product purchase agreement with a subsidiary of NextEra to create a new wind farm project in Scurry County, Texas. Once operational, the wind farm project will produce approximately 1.1 million megawatt hours of electricity annually.
Nucor also announced in November 2022 it had joined the United Nations 24/7 Carbon-Free Energy Global Compact to enhance its commitment to a zero-carbon electrical grid, working with its electricity suppliers to access “24/7” clean energy at its steel mills.
This followed Nucor’s news in April 2022 that it was investing $15 million in nuclear energy technology.
Carbon capture, utilization, and sequestration works well to decarbonize heavy industries, including the steel industry, according to Chris Davis, senior vice president of Milestone Carbon, a company that offers solutions for the permanent geological sequestration of carbon dioxide (CO2) for significant industrial emitters.
Steel companies can either build new, efficient mills and electrify the grid by themselves, or producers can build sequestration sites and retrofit older plants, Davis told Fastmarkets.
Legacy steelmaker US Steel said on September 20 it is collaborating with the National Energy Technology Laboratory – a government research laboratory for the DOE – to test an advanced membrane technology to capture CO2 emissions at its Edgar Thomson Plant located in Braddock, Pennsylvania.
It was US Steel’s second foray into carbon capture technology this year, after it signed in March a memorandum of understanding with CarbonFree Chemicals Holdings to capture CO2 emissions at the company’s Gary Works manufacturing plant in Indiana.
Additionally, the Pittsburgh-based steelmaker said in June 2022 the DOE had granted the University of Illinois $3.46 million to support a carbon capture study at US Steel’s Gary Works in Indiana.
On June 1 this year, Nucor said it had entered an agreement with ExxonMobil to capture, transport and store carbon from the company’s direct-reduced iron (DRI) facility in Convent, Louisiana.
Commenting on the flurry of developments in steel decarbonization efforts, an industry source noted it was necessary for different producers to adopt varied approaches given the distinction of the US producing more than 70% of its steel via EAFs, and the remaining produced in BF-powered mills.
“The best way to decarbonize the steel industry is to electrify by charging electric-arc furnaces with scrap and high quality metallics (HQM),” the industry source told Fastmarkets.
“Nucor and SDI are 100% electric already and emit around 0.5t of CO2 per tonne of steel they produce. They will try to reduce this by purchasing renewable electricity, e.g., hydro, nuclear fission, nuclear fusion, wind and solar,” the source said.
Nucor and SDI may also try to reduce CO2 emitted during the production of HQM; the source noted. “Emissions from the production of DRI and pig iron could be reduced via the use of carbon capture and sequestration,” the source said.
“I think Nucor and SDI will continue to lead the way in profitability and low carbon emissions and will be able to afford to invest in new technologies to drive emissions lower if required by regulations,” the source told Fastmarkets.
The cost of decarbonizing is higher for legacy steelmaker US Steel, the source said, noting that US Steel has been “reducing emissions by closing blast furnaces and building EAFs.”
“I would expect them to continue doing this, but this is capital cost intensive. Their CO2 emissions will be around 1.5t per tonne of steel,” the source said.
“Cleveland-Cliffs does not have many electric arc furnaces; they mainly use the blast furnace and basic oxygen furnace (BOF) route for steelmaking,” the source said. “This emits around 2.0t of CO2 per tonne of steel.”
“Cliffs has built a DRI plant in Toledo, [Ohio,] which feeds DRI to their blast furnaces. This will reduce their CO2 emissions by 10-20%, but the BF/BOF route cannot reach the low levels of CO2 emitted via EAFs,” the source said.
Integrated producers US Steel and Cliffs “could reduce CO2 emissions from their BFs by another 20-30% via the increased use of DRI, replacing PCI (pulverized coal injection) coal with biochar, and by increasing the use of scrap in the BOFs (via preheat and melting),” the source said.
“However, the BF/BOF route will always emit more CO2 than the EAF and therefore, they will be at risk if carbon taxes are imposed, and they cannot afford to install the EAFs required to replace all their blast furnaces,” the source told Fastmarkets.
The major US steel producers all publicly committed to specific carbon-reduction goals in 2021, and since then have made various investments to that end.
US Steel had declared its intention of achieving net-zero carbon emissions by 2050, and its integrated rival Cleveland Cliffs had also announced in 2021 its goal to reduce its greenhouse gas (GHG) emissions by 25% by 2030.
SDI had set a goal in 2021 to become carbon-neutral in its EAF steel mill operations by 2050.
Nucor had said in 2021 aims to lower its GHG emissions intensity of its steel mills to 77% less than the current global average and committed to reach net-zero emissions beyond 2030.
These pledges were made against the backdrop of the US – under President Joe Biden – committing to a target of net-zero carbon emissions by 2050, as well as targeting to achieve a 50-52% reduction from 2005 levels in economy-wide net greenhouse gas pollution in 2030.
There is a huge economic impetus for domestic producers to differentiate their steel products as cleaner than those produced in other countries; the Inflation Reduction Act (IRA) and the CHIPS and Science Act (CHIPS Act) will support the steel industry’s decarbonization drive, as well as generate incremental demand for steel products, sources have said previously.
For example, US Steel said in July this year it had achieved environmental product declarations on hot-rolled coil, cold-rolled coil, and corrosion-resistant (galvanized steel) products made at its Big River Steel Works EAF facility, which is seen as a step toward measuring returns on the company’s investment in decarbonization efforts.
Cleveland-Cliffs also said in July it is charging a $40 per net ton surcharge – called the “Cliffs H surcharge” – on steel products produced using hot-briquetted iron (HBI), a low-carbon iron feedstock used in BFs, BOFs and EAFs.
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