Discover more from Steve’s Newsletter
The Life of Steel
A look at steel production and what's in store going forward
Steel is one of the most widely used materials on the planet and therefore plays a major role when it comes to reducing greenhouse gas emissions and targeting Net Zero by 2050. But reducing our reliance on steel is unlikely to be the answer because we need steel and there simply isn’t a substitute. Instead, the industry is looking to decarbonise production.
I take a quick look back on how steel has been produced for the last 140 years or so, and what looks set to change in the next few decades.
Iron and Bessemer
The real step change for use of steel in construction occurred when Sir Henry Bessemer developed a quick and cheap way of turning iron into steel. The Bessemer Process involved blowing oxygen through the molten iron to produce a reaction with the carbon. This was by no means perfect, but with other process improvements discovered by others and collectively adopted, a new world of steel production had arrived. Through the latter half of the 19th Century, the steel industry took off - a much needed production boost for rail more than buildings initially.
Prior to Bessemer, there was Blister Steel which was very slow to produce and only really used in speciality applications. Wrought iron and cast iron were also predecessors, but their slow manufacture and brittle nature limited the scale of use.
Open Hearth, Electric Arc and Basic Oxygen Furnaces
By 1900 an improvement to the Bessemer process had been developed - Open Hearth. This was more efficient, gave greater control on the specification and the furnaces could hold larger quantities, up to 50-100 tonnes.
In the early 1900s a very different production method was being adopted, and still represents around a third of all steel production. Electric Arc Furnaces passed a current through feed material (scrap metal and ferrous ore treated via a DRI reduction process) generating high temperatures and the oxidation required for steel production. Lower capital requirements to build a facility, more energy efficient and an ability to easily turn operations on and off all led to the growth of this method.
So why didn’t Electric Arc take over fully? It was because Basic Oxygen was another improvement on the Open Hearth method, and resulted in furnaces holding up to 350 tonnes - a scale of production able to compete with EAF. Today, Basic Oxygen Furnaces have replaced Open Hearth, and represent two thirds of all steel production. EAF found itself limited to regions with a very low natural gas prices (the reductant in the DRI process) while BOF flourished using carbon heavy coke as the fuel.
EAF - Electric Arc Furnace, or DRI-EAF (Direct Reduced Iron - Electric Arc Furnace)
BOF - Basic Oxygen Furnace, or BF-BOF (Blast Furnace - Basic Oxygen Furnace)
The Future of Steel
Given the increasing awareness and desire to reduce carbon emissions, the steel industry is eyeing a move towards natural-gas based EAF, with follow-on improvements to the already established technology.
Let’s recap the existing features/benefits of DRI-EAF and look for future improvement:
Electricity is used to generate the heat. With electrification happening across the board these days, it is easy to see how this energy source could be provided in a green way, or potentially fully renewable.
The process can use scrap as an input. With greater focus on the Circular Economy and an increasing demand for ‘recycled steel’, EAF is well positioned to deliver.
The reductant in the DRI part of the process is natural gas, but this could switch to hydrogen. Not only would this be a change to a clean energy source, but the production of hydrogen could be produced via electrolysis of water using renewable electricity. In the meantime, while infrastructure is developed for mass volume green hydrogen production, it is possible to create blue hydrogen from natural gas and utilise CCS.
Combining all three of these improvements is the roadmap to zero carbon emissions steel. ArcelorMittal are creating the world’s first full scale zero carbon emissions steel plant in Sestao, Spain and expect it to be online in 2025. It will use DRI from a new green hydrogen facility in Gijon, Spain. This simple diagram shows the principal:
Improvements to the fossil fuel hungry BOF steel producers will also occur. Developments in the coke fuel (possibly changing to coke oven gas), carbon capture and Storage (CCS) and perhaps circular carbon will all move the dial in the right direction.
It is important to consider the different drivers and incentives affecting how, where and the speed of these possible changes. Different regions around the world are working to different timelines, and have varying ages of BOF facilities (which can have a life of 50yrs) meaning they might not be so keen for a move to EAF just yet.
And then there is the issue of input materials. There simply is not enough of the two inputs into EAF (scrap metal and DRI) to meet global production demand, which means that BOF is certainly not going to disappear for a while yet.
In Europe and UK I certainly see demand growing for green or zero carbon steel. I believe the manufacturers are hearing this and reacting to bring new products onto the marketplace. But this has to happen together - demand signals must be sent in order for companies such as Arcelor Mittal to invest heavily into their future facilities. Responsible Steel and Steel Zero are both brilliant ways of bringing these opposite ends of the industry together and setting out new standards of production.