[vc_row][vc_column][vc_column_text]The International Energy Agency (IEA) has designed a technology roadmap for the sustainable development of the steel industry in the recently announced “Energy Technology Outlook”. According to the report, steel is essential to the modern economy, and global steel demand is expected to continue to grow in the coming decades. But to meet downstream demand, the steel industry still faces huge challenges. This is because the steel industry needs to find a path to sustainable development while maintaining its competitiveness.
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Interdependence of steel and energy
Steel is deeply rooted in today’s society. The construction of houses, schools, hospitals, bridges, cars and trains all require steel. Steel is also an indispensable material for the energy transition. Solar panels, wind turbines, dams and electric cars all rely on steel to varying degrees. Since the 1970s, due to economic growth, urbanization, infrastructure construction, etc., global steel demand has more than tripled and will continue to grow.
Among heavy industries, the steel industry ranks first in terms of carbon dioxide emissions and second in terms of energy consumption. The iron and steel industry directly emits 2.6Gt of carbon dioxide each year, accounting for 7% of the total emissions from the global energy system, exceeding the emissions of road freight. The steel industry is currently the largest coal-consuming industry, and coal provides about 75% of energy demand. Coal is used to generate heat and make coke, and coke plays an important role in the chemical reaction of reducing iron ore.
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Growing demand brings challenges to carbon emissions reduction
By 2050, global steel demand is expected to increase by more than one-third. The new crown pneumonia epidemic has had a huge impact on the global supply chain. It is estimated that global crude steel production in 2020 will drop by 5% compared to 2019. China is bucking the trend. Based on the strong output level in the first half of this year, steel production is expected to increase in 2020. After the short-term global economic recession, the steel industry returned to the strong growth track predicted by the International Energy Agency’s baseline. Although the proportion of less energy-intensive secondary production will be higher, if targeted measures are not taken to reduce steel demand as much as possible, and the current production system is not drastically reformed, carbon dioxide emissions are expected to be Will continue to rise, so before 2050, annual carbon dioxide emissions will reach 2.7Gt.
Steel is one of the most recycled materials currently in use. About 70% of the world’s steel raw materials come from iron ore, and the rest comes from recycled steel scrap. The energy required to produce steel from scrap steel is about one-eighth of iron ore production, mainly in the form of electricity, rather than using coke to reduce iron ore. The biggest advantage of the production method using scrap steel as raw materials is the high recycling rate (the global average is about 80%-90%). However, scrap steel cannot fully meet the raw material demand of the steel industry because the current crude steel output is much higher than the scrap steel output. This means that in order to achieve climate goals, we cannot rely solely on recycling to reduce carbon dioxide emissions from the steel industry.
Steel is one of the most recycled materials currently in use. About 70% of the world’s steel raw materials come from iron ore, and the rest comes from recycled steel scrap. The energy required to produce steel from scrap steel is about one-eighth of iron ore production, mainly in the form of electricity, rather than using coke to reduce iron ore. The biggest advantage of the production method using scrap steel as raw materials is the high recycling rate (the global average is about 80%-90%). However, scrap steel cannot fully meet the raw material demand of the steel industry because the current crude steel output is much higher than the scrap steel output. This means that in order to achieve climate goals, we cannot rely solely on recycling to reduce carbon dioxide emissions from the steel industry.
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Improve material utilization efficiency
In order to achieve global energy and climate goals, the steel industry’s emissions must be reduced by at least 50% by 2050, and zero emissions will continue to be pursued thereafter. The Sustainable Development Plan issued by the International Energy Agency has proposed an ambitious path for the energy system to achieve net zero emissions by 2070. Although more efficient use of raw materials can help reduce the overall demand level corresponding to the baseline forecast, compared to the current 1.4 tons of carbon dioxide emissions per ton of steel, the average direct carbon dioxide emission intensity of steel production must be reduced by 60% by 2050. Can be reduced to 0.6 tons of carbon dioxide emissions per ton of steel.
Compared with the baseline forecast, the implementation of a series of measures to improve the efficiency of material use in the supply chain will reduce global steel demand by about one-fifth in 2050. The saved steel demand is mainly brought about by extending the life of buildings. The “Sustainable Development Plan” believes that the material efficiency strategy accounts for 40% of the cumulative CO2 emission reduction.
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Improve the energy efficiency of existing equipment
The energy intensity of the most advanced blast furnace is close to the actual minimum energy requirement. For inefficient equipment, the gap between current energy performance and best practices may be much larger, but since energy accounts for a large proportion of production costs, the industry encourages the replacement of the most efficient equipment. According to the “Sustainable Development Plan”, improving operational efficiency, including strengthening process control and predictive maintenance strategies, and adopting the best feasible technology, can reduce cumulative carbon dioxide emissions by about 20%.
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R&D and application of innovative technologies
The new steelmaking process is crucial. Hydrogen, carbon capture, utilization and storage (CCUS), bioenergy and direct electrification are all effective ways to achieve substantial emissions reductions in steelmaking, and many new processes are currently being explored. Energy prices, technology costs, raw material supply and regional policy prospects are all factors that affect the technology mix in the “Sustainable Development Plan”. Some countries obtain low-cost renewable energy power (20-30 US dollars per MWh), which provides a competitive advantage for the hydrogen-based direct reduced iron (DRI) process route. By 2050, this process route will be close to the global roughness. 15% of steel output. In areas where the local policy environment is favorable and cheap fossil fuels are abundant, innovative smelting reduction, natural gas-based DRI and various innovative blast furnace concepts will be equipped with CCUS facilities. The “Sustainable Development Plan” believes that hydrogen and CCUS together account for about a quarter of the cumulative emission reductions.
New technologies must be deployed extremely fast, and new infrastructure must also be activated. Although China and other emerging economies have begun to shift to electric furnace production, and at the same time, the supply of scrap steel is also increasing, and it may be a smooth transition to mass electric furnace production. However, with this transition, it is necessary to quickly introduce technologies that are still in the early stage of development. . The “Sustainable Development Plan” believes that after the market launches new technologies, it is necessary to deploy a hydrogen-based DRI plant every month worldwide. By 2050, electricity demand will increase by 720 TWh, equivalent to 60% of current electricity consumption. Before 2050, plants equipped with CCUS will need to capture about 0.4 Gt of carbon dioxide globally, which is equivalent to deploying a large CCUS facility every 2-3 weeks from 2030 (capture 1 million tons of carbon dioxide per year).
Without the innovation of net zero emission steelmaking technology, it is impossible to achieve substantial emissions reduction. The “Sustainable Development Plan” predicts that 30% of the cumulative emission reductions by 2050 will come from steelmaking technologies currently in the demonstration or prototype stage. The “Sustainable Development Plan” believes that if we do not continue to work hard to promote the development of these technologies through innovation, it is impossible to quickly deploy CCUS and low-carbon hydrogen facilities. Some rapid innovation cases explored the technical implications of advancing the date of achieving net zero emissions from the energy system to 2050. In the case of rapid innovation, by 2050, nearly three-quarters of the annual emission reductions will come from technologies that have not yet been commercialized, which is equivalent to about 40% of the sustainable development vision.
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Government promotes accelerated transformation
The sustainable transformation of the iron and steel industry will not be realized on its own. It requires the government to play a central role and introduce multiple policy combinations to promote it. Including setting long-term and uninterrupted targets for reducing carbon dioxide emissions, managing existing assets and short-term investments, creating a steel market that achieves net zero emissions, supporting demonstration plants for net zero emissions steelmaking technology, improving material efficiency, improving international cooperation and ensuring Fair global competition, development of net-zero emission technology infrastructure, tracking progress and improving data collection methods.
The technology roadmap is extended to 2050, but the government and policy makers should understand that 2030 is a key window for accelerating transformation, and concrete and measurable goals in three priority areas need to be set from now on. One is technical performance and material efficiency. In terms of deploying innovative technologies and promoting infrastructure development, in order to reduce the burden, we must immediately seize the opportunity to use the best available technologies and measures to use energy and materials more effectively. The second is existing assets and new infrastructure. A plan must be introduced to deal with existing assets, stipulating that only one investment cycle can reduce the intensity of carbon dioxide emissions. At the same time, a new hydrogen and carbon dioxide transportation and storage infrastructure will be established to pave the way for the deployment of innovative technologies. The third is to actively carry out research and development and pilot trials. The pilot and demonstration projects of innovative net-zero emission technologies in the next ten years must be consistent with the goals after 2030. In this regard, the new crown pneumonia epidemic has caused an economic crisis, which brings challenges and opportunities. These key technological innovations are a prerequisite for achieving carbon neutrality.[/vc_column_text][/vc_column][/vc_row]
