Green steel manufacturing: a start to a greener future

Published on January 9, 2025 by Harshika Jain

Introduction

Steel has been one of the most important components in the construction of modern buildings. However, steel production leads to high emissions of greenhouse gases. Studies have found that the amount of carbon dioxide from steel manufacturing is almost double the amount of steel created. One of the first steps to reducing greenhouse gas emissions is reducing industrial pollution, according to the International Energy Agency. It suggests that steel emissions be halved in the next 25 years and reduced further if net-zero targets are to be achieved.

Why traditional production methods are not sustainable

Traditional steel-production methods such as basic oxygen furnace (BOF) and blast furnace (BF) produce high amounts of greenhouse gases. While these methods are employed by more than half of the steel-producing companies, they are catastrophic for the environment, making it critical that sustainable steel-producing techniques be deployed to ensure the safety of the environment.

How green steel is manufactured: major technologies

• Direct reduction of iron ore (DRI): This process converts iron ore without producing carbon dioxide. MIDREX is one such technique; it is customisable to production requirements and reduces carbon emissions.

• Electrification: With the latest technology, any process in steelmaking can be converted to electricity-based production. Using more sustainable technologies for producing electricity enhances sustainability of the industry.

• Carbon capture, utilisation and storage (CCUS): This technology eliminates carbon dioxide produced during the process of steel manufacturing. The carbon dioxide produced could be used for manufacturing other products such as biofuel and plastics.

• Use of ammonia as a reducing agent: Steel-producing companies mix ammonia with iron ore to produce nitrogen and water. This makes the process much safer for the environment.

• Recycling: Scrap steel can be recycled to be used again, reducing energy consumption and water wastage. Recycling is also imperative for environmental sustainability.

Global efforts towards green steel production

• Governments are providing soft loans and interest-rate discounts for producing green steel.

• The European Commission has approved grants to incentivise steel production by using sustainable techniques.

• Carbon taxing or carbon pricing has also been introduced; carbon taxes are imposed on entities that produce greenhouse gases beyond the prescribed limits. This helps combat pollution and incentivises companies to launch greener initiatives.

Roadblocks in green steel manufacturing

• Setup costs: Initial setup costs for manufacturing green steel are higher than those for producing traditional steel. Adopting the latest technology also requires training labour and the availability of raw materials. Small companies may find it difficult to make such investments.

• Changing technology: Technology becomes obsolete rapidly, making it difficult for companies to decide which technology to invest in.

• Supply chain: Steps towards sustainability require not only changes in production, but also changes in the supply chain. However, making changes to the entire supply chain requires time and is a complex process.

• Greenwashing: Many companies claim their steel is green, although the technology used has only a small proportion of green initiatives and most of the techniques still harm the environment. Hence, standards and regulations need to be complied with to ensure that the steel produced is genuinely “green”.

Outlook

The future of green steel manufacturing looks promising, with a number of initiatives and collaborations underway to accelerate the transition. Governments, industry leaders and research institutions are exploring technologies for producing steel sustainably. For instance, the European Union’s Green Deal and the US’s Infrastructure Investment and Jobs Act include provisions to support sustainable steel production.

Moreover, since consumers are increasingly becoming aware of ESG initiatives, greener production techniques are gaining popularity. As awareness of the need to combat climate change grows, stakeholders across the value chain are increasingly prioritising sustainability.

Conclusion

Green steel manufacturing represents a critical step towards a sustainable future. By embracing innovative technologies and sustainable practices, the steel industry could significantly reduce its environmental impact while maintaining its vital role in global development. The journey towards green steel is challenging, but the potential benefits for the environment, economy and society make it a worthwhile endeavour. As the world continues to strive for a low-carbon future, green steel would undoubtedly play a pivotal role in achieving these goals.

How Acuity Knowledge Partners can help

We provide consulting services through our Consulting and Corporates division. Our team of experts helps manufacturers navigate new and existing markets in terms of manufacturing green steel and identify regions with high demand for such products.

Sources:

• https://spectra.mhi.com/the-three-phases-to-green-steel-production

• https://rmi.org/wp-content/uploads/2019/09/green-steel-insight-brief.pdf

• https://worldsteel.org/wp-content/uploads/Carbon-capture-use-and-storage-2023.pdf

• https://www.dierk-raabe.com/green-steel-making-with-ammonia/

• https://ec.europa.eu/commission/presscorner/detail/en/ip_23_3928

• https://www.ssab.com/en/fossil-free-steel/insights/green-steel

• https://www.energy-transitions.org/publications/net-zero-steel-sector-india/

• https://www.ssab.com/en/brands-and-products/docol/automotive-steel-resources/automotive-insights/comparing-green-steel-technologies

• https://blog.se.com/industry/mining-metals-minerals

• https://blog.fp-lims.com/en/green-steel

• https://static1.squarespace.com/static/+Steelmaking_.pdf

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