Steelmakers are actively utilising all available options for decarbonisation, whilst balancing trade-offs in approaches and resource challenges, Kallanish heard from participants during a recent OECD webinar.
The organisation’s research shows there is disconnect between company ambition and implementation for decarbonisation, OECD head of steel decarbonisation Michele Rimini said during the “channelling market forces towards steel decarbonisation” webinar held by OECD at COP 29 last week.
But steelmaker panellists said they were seeking to balance the trade-offs they were facing between approaches.
Piljin Moon, carbon neutral strategy team lead at Posco, noted: “The major trade-off between the breakthrough technology and incremental steps in decarbonisation lies in the balance between risk and reward.”
“Although the breakthrough technology offers significant long-term gain and deeper CO2 reduction, it comes with higher risk and cost, [and] uncertainty in business feasibility. On the other hand, incremental steps are less risky, and more immediately applicable, but they may not achieve the substantial reduction for long-term climate goal,” he said.
“Since the development of the breakthrough technology doesn’t happen overnight, the company should adopt a dual approach, that means steelmakers should implement carbon strategy while simultaneously investing in initiative technology development,” he added.
Moon noted his company’s efforts to reduce CO2 emissions at its current facilities, whilst also constructing a new EAF and developing the hydrogen steelmaking process to replace coal.
Hiroyuki Tezuka, executive manager of Climate Change Policy Group at JFE Steel Corporation, echoed this sentiment, noting its similarities with Posco.
JFE is seeking to utilise hydrogen in the reduction process, and improve its blast furnaces for incremental CO2 reduction, whilst also utilising a new generation EAF to increase use of scrap.
“We cannot throw away any options, we [don’t have that] luxury,” Tezuka added.
Each decarbonisation option also has its own challenges amid limited availability of scrap, affordable and abundant hydrogen, and high-grade iron ore.
“Use of more scrap in company A means reduced scrap availability for company B,” Tezuka said.
“Another issue is the availability of high-grade iron ore, accounting for only around 10% of global iron ore supply capacity. Once everyone chases after this hydrogen DRI route, high-grade iron ore will be very scarce and a precious … material,” he added.
Tezuka also noted how his firm’s recent joint venture with United Arab Emirates-based Emirates Steel to build a hydrogen-ready DRI plant would allow it access to materials and value chains such as natural gas and hydrogen. These parts of the value chain are not currently available in Japan at affordable prices. This would allow it to keep its steelmaking and finishing facilities operating in Japan.
Both steelmakers noted the high costs of producing green steel, which would need to be passed onto customers.
“Decarbonisation requires a balanced approach … CO2 reduction doesn’t come for free,” Moon said.
Tezuka mulled how steelmakers could create a market for green steel and convince customers to pay more for their usual quality grades of steel made using a “very complex production process”.
Putting a value on transitional green steel would help steelmakers recover their initial emission reduction investments.
Carrie Bone UK
