The global steel market may rapidly divide into one customer base that is primarily purchasing green steel and another, legacy segment procuring so-called “grey” steel, according to panellists at Thursday’s Kallanish Flat Steel 2023 conference in Istanbul.
“We are going to see a two-tier steel market,” said Thomas Hörnfeldt, vice president for sustainability and public affairs at Swedish green steel pioneer SSAB. “We can see that there is, among the customer groups, a clear interest in green steel.”
Luca Faralli, vice president of sales at Danieli, agreed a bifurcated market is inevitable. While “decarbonisation is the master, for our children and our grandchildren,” Faralli noted, the movement towards green steel will happen at a different pace in different regions of the world. The two-tiered path will be temporary in the sense that the entire global market will coalesce around carbon-free steel production eventually.
Hasan Akbulut, technical affairs director at Turkish steel association TCUD, highlighted four “myths” of decarbonisation in steelmaking: Green steel is too expensive and customers will not pay for it. Low-carbon technology is not yet a reality. There is not enough suitable iron ore. Metallurgical coal is critical, and therefore carbon capture will be a necessity.
Akbulut identified real hurdles to industry-wide decarbonisation, however. One is that there are at least 22 blast furnaces under construction, with more than 100 additional projects planned, primarily in China, India, Indonesia and Vietnam. Plus, there is not enough government funding available for the industry to transform itself and access enough clean energy from the electric utilities.
“Saying is simple, but paying is not going to be so simple,” Akbulut emphasised. He added EAFs’ share of steelmaking in Turkey will be 85% in 2050 versus 75% today.
Faralli outlined approximately five pathways for blast-furnace and electric-arc-furnace-based steelmakers to reduce carbon output. Danieli has developed, for example, a “Digimelter” system to improve efficiency and reduce carbon footprint.
With a particular focus on EAF solutions, Danieli is also developing equipment to optimise scrap processing. Ferrous scrap usage is projected to grow to 1.05 billion tonnes in 2033, from 655 million t today. Faralli recognised the challenge for steelmakers to source that much volume but also emphasised that technology is available to handle impurities including unwanted copper content.
“So, a new approach to the scrap market must be implemented,” he urged. “We have to pre-select the scrap and pre-process it.”
Malvika Shetty, a pricing analyst with Kallanish Index Services who tracks clean-energy projects globally, said a green steel objective is a primary driver of some of the hydrogen development and other green energy investments. Shetty acknowledged the regional differences, often borne of practical factors. Australia, for example, gravitates toward solar and wind projects because of its tendency to enjoy sunny weather and consistent wind. In North America, natural gas is more in focus.
SSAB is heavily involved in a hydrogen storage pilot along with its zero-carbon steelmaking initiative. Hörnfeldt said the storage aspect holds great promise in the Scandinavian countries “for a cold, dark winter night when there is no wind and no sun”.
SSAB started its fossil-free steel pilot project in 2020 and has already produced almost 1,000 tonnes. The company forecasts as much as 1.3mt of production by 2026. There is demonstrable demand from the construction, automotive and industrial equipment segments.
The global steel industry is responsible for an estimated 7-8% of carbon emissions. Danieli’s technology thus far is, at least, helping the industry envision its ability to achieve the zero-carbon goal by 2050. “The target can be reached,” Faralli said. “It is not at hand, but with some work, we can be there.”
Dom Yanchunas USA
