7.4.1 Iron and steel

Steel is by far the world’s most important metal, with a global production of 1129 Mt in 2005. In 2004, the most important steel producers were China (26%), EU-25 (19%), Japan (11%), USA (10%) and Russia (6%) (IISI, 2005). Three routes are used to make steel. In the primary route (about 60%), used in almost 50 countries, iron ore is reduced to iron in blast furnaces using mostly coke or coal, then processed into steel. In the second route (about 35%), scrap steel is melted in electric-arc furnaces to produce crude steel that is further processed. This process uses only 30 to 40% of the energy of the primary route, with CO₂ emissions reduction being a function of the source of electricity (De Beer et al., 1998). The remaining steel production (about 5%), uses natural gas to produce direct reduced iron (DRI). DRI cannot be used in primary steel plants, and is mainly used as an alternative iron input in electric arc furnaces, which can result in a reduction of up to 50% in CO₂ emissions compared with primary steel making (IEA, 2006a). Use of DRI is expected to increase in the future (Hidalgo et al., 2005).

Global steel industry CO₂ emissions are estimated to be 1500 to 1600 MtCO₂ (410 to 440 MtC), including emissions from coke manufacture and indirect emissions due to power consumption, or about 6 to 7% of global anthropogenic emissions (Kim and Worrell, 2002a). The total is higher for some countries, for example steel production accounts for over 10% of China’s energy use and about 10% of its anthropogenic CO₂ emissions (Price et al., 2002). Emissions per tonne of steel vary widely between countries: 1.25 tCO₂ (0.35 tC) in Brazil, 1.6 tCO₂ (0.44 tC) in Korea and Mexico, 2.0 tCO₂ (0.54 tC) in the USA, and 3.1 to 3.8 tCO₂ (0.84 to 1.04 tC) in China and India (Kim and Worrell, 2002a). The differences are based on the production routes used, product mix, production energy efficiency, fuel mix, carbon intensity of the fuel mix, and electricity carbon intensity.

Energy Efficiency. Iron and steel production is a combination of batch processes. Steel industry efforts to improve energy efficiency include enhancing continuous production processes to reduce heat loss, increasing recovery of waste energy and process gases, and efficient design of electric arc furnaces, for example scrap preheating, high-capacity furnaces, foamy slagging and fuel and oxygen injection. Continuous casting, introduced in the 1970s and 1980s, saves both energy and material, and now accounts for 88% of global steel production (IISI, 2005). Figure 7.1 shows the technical potential^[6] for CO₂ emission reductions by region in 2030 for full diffusion of eight cost-effective and/or well developed energy savings technologies under the SRES B2 scenario, using a methodology developed by Tanaka et al. (2005, 2006).

Figure 7.1: CO₂ reduction potential of eight energy saving technologies in 2030

CDQ = Coke Dry Quenching, HS = Hot Stove, TRT = Top Pressure Recovery Turbine, SC = Sinter Cooling, CC = Continuous Casting, SP = Sinter Plant, BOFG = Basic Oxygen Furnace Gas, ME = Main Exhaust, WH = Waste Heat

Note: B2 Scenario, CO₂ emission reduction based on energy saving assuming 100% diffusion in 2030 less current diffusion rates.

Source: Tanaka, 2006.

The potential for energy efficiency improvement varies based on the production route used, product mix, energy and carbon intensities of fuel and electricity, and the boundaries chosen for the evaluation. Tanaka et al. (2006) also used a Monte Carlo approach to estimate the uncertainty in their projections of technical potential for three steel making technologies. Kim and Worrell (2002a) estimated economic potential by taking industry structure into account. They benchmarked the energy efficiency of steel production to the best practice performance in five countries with over 50% of world steel production, finding potential CO₂ emission reductions due to energy efficiency improvement varying from 15% (Japan) to 40% (China, India and the USA). While China has made significant improvements in energy efficiency, reducing energy consumption per tonne of steel from 29.3 GJ in 1990 to 23.0 GJ in 2000^[7] (Price et al., 2002), there is still considerable potential for energy efficiency improvement and CO₂ emission mitigation (Kim and Worrell, 2002a). Planned improvements include greater use of continuous casting and near-net shape casting, injection of pulverized coal, increased heat and energy recovery and improved furnace technology (Zhou et al., 2003). A study in 2000 estimated the 2010 global technical potential for energy efficiency improvement with existing technologies at 24% (De Beer et al., 2000a) and that an additional 5% could be achieved by 2020 using advanced technologies such as smelt reduction and near net shape casting.

ULCOS (Ultra-Low CO₂ Steel making), a consortium of 48 European companies and organizations, has as its goal the development of steel making technology that reduces CO₂ emission by at least 50%. The technologies being evaluated, including CCS, biomass and hydrogen reduction, show a potential for controlling emissions to 0.5 to 1.5 tCO₂/t (0.14 to 0.41 tC/t) steel (Birat, 2005). Economics may limit the achievable emission reduction potential. A study of the US steel industry found a 2010 technical potential for energy-efficiency improvement of 24% (Worrell et al., 2001a), but economic potential, using a 30% hurdle rate, was only 18%, even accounting for the full benefits of the energy efficiency measures (Worrell et al., 2003). A similar study of the European steel industry found an economic potential of less than 13% (De Beer et al., 2001). These studies focused mainly on retrofit options. However, potential savings could be realized by a combination of capital stock turnover and retrofit of existing equipment. A recent analysis of the efficiency improvement of electric arc furnaces in the US steel industry found that the average efficiency improvement between 1990 and 2002 was 1.3%/yr, of which 0.7% was due to capital stock turnover and 0.5% due to retrofit of existing furnaces (Worrell and Biermans, 2005). Future efficiency developments will aim at further process Data is pluralintegration. The most important are near net shape casting (Martin et al., 2000), with current applications at numerous plants around the world; and smelt reduction, which integrates ore agglomeration, coke making and iron production in a single process, offering an energy-efficient alternative at small to medium scales (De Beer et al., 1998).

Fuel Switching. Coal (in the form of coke) is the main fuel in the iron and steel industry because it provides both the reducing agent and the flow characteristics required by blast furnaces in the production of iron. Steel-making processes produce large volumes of byproducts (e.g., coke oven and blast furnace gas) that are used as fuel. Hence, a change in coke use will affect the energy balance of an integrated iron and steel plant.

Technology enabling the use of oil, natural gas and pulverized coal to replace coke in iron-making has long been available. Use of this technology has been dictated by the relative costs of the fuels and the process limitations in iron-making furnaces. Use of oil and natural gas could reduce CO₂ emissions. More recently, the steel industry has developed technologies that use wastes, such as plastics, as alternative fuel and raw materials (Ziebek and Stanek, 2001). Pretreated plastic wastes have been recycled in coke ovens and blast furnaces (Okuwaki, 2004), reducing CO₂ emissions by reducing emissions from incineration and the demand for fossil fuels. In Brazil, charcoal is used as an alternative to coke in blast furnaces. While recent data are not available, use of charcoal declined in the late 1990s, as merchant coke became cheaper (Kim and Worrell, 2002a). The use of hydrogen to reduce iron ore is a longer-term technology discussed in Section 7.12. CCS is another longer-term technology that might be applicable to steel making (see section 7.3.7).