Steel’s Outsized Carbon Emissions Will Shrink Rapidly In Coming Decades Even As Demand Rises

But it begs the question: what will the carbon curve look like? The massive growth in demand from 1990 to 2020 as China brought 850 million people out of poverty and rural areas into middle-class citizens living in advanced, modern cities came with similar growth in carbon emissions. With demand still increasing, albeit more slowly through 2060, will carbon emissions continue to grow?

The answer is no, of course. First off, all energy required for making steel will become electricity. We won’t be repowering blast and open-heart furnaces, as we will be making what new iron we require using direct reduction technologies. The HYBRIT project has already succeeded in making steel from iron ore mined in zero emissions mines using green electricity and green hydrogen. End-to-end, the process is zero process emissions, although of course there is still embodied carbon in the vehicles and steel and cement used to manufacture and construct the facilities. Midrex’ DRI makes lower carbon steel using hydrogen to displace some natural-gas sourced syngas and can become much lower carbon still by using green electricity for process heat, green hydrogen, and biomethane.

But with more and more zero emissions steel building the steel infrastructure and trucks of the future, embodied carbon will plummet as well. As a reminder, full lifecycle emissions for wind generation for wind and solar are embodied carbon in the cement and steel, and distribution emissions as they cross oceans and components are trucked to sites. With renewable generation being constructed from zero-emissions steel and concrete in the future and moved to sites by electric vehicles, the scant grams of CO2e per kWh will plummet to zero in the coming decades.

All energy will be electric, and all electrical generation will have increasingly low embodied carbon, a virtuous circle.

And so, my first scenario of global steel carbon emissions. I project a reasonable increase in DRI and EAF in 2030 over today’s ratios and a smaller reduction in blast and open heart furnaces, so their lower emissions with current technologies should see a reduction in emissions in 2030. With more scrapping and more direct reduction using lower carbon technologies such as Midrex’ DRI and HYBRIT every decade, and the likely creation of those facilities closer to iron ore mines, high-emissions furnaces will go out of business over the coming decades, unable to decarbonize.

Of course, a big question remains. How much green hydrogen is required for the Midrex and HYBRIT low-carbon solutions? People might remember that I have a heterodox projection of declining hydrogen demand through 2100. In that, I projected using the patented Mike Makes Stuff Up (MMSU) method that we might see 40 million tons of new hydrogen demand in the latter half of the century. It was an intuitive guess, but that’s all it was or was claimed to be. I included it because it was the only area I saw a strong reason for growth of demand, and as such required at least a placeholder. (If you think MMSU is a joke, it really isn’t. I use it in client interactions transparently as part of a Bayesian process to avoid blank page-itis.)

Assuming HYBRIT levels of hydrogen, every ton of new steel will require 51 kg of green hydrogen. As we are mostly going to be scrapping steel to meet the increased levels of demand, as the first projection shows, we don’t need to provide hydrogen for 2,300 million tons of steel every year, but only for the DRI portion, 600 million tons. That means we end up with a requirement for about 30 million tons of green hydrogen for steel, up from so close to zero today that it’s not worth talking about. But I had that back end loaded in my projection and I think more hydrogen in steel making processes will occur more rapidly than I had before, so hydrogen demand leaving desulphurization of sour crudes like Alberta’s and Venezuela’s will be matched somewhat.

And so, an updated hydrogen demand projection that in 2100 drops from about 95 million tons annually to about 85 million tons. I’ve also updated one other thing. Paul Martin pointed out that he didn’t agree with my hypothesis that there would be lower fertilizer demand for hydrogen by 2030, and after consideration, that was too aggressive. The fertilizer demand curve takes a bit longer to work out in the end. As a result, that contributes to current hydrogen demand persisting a bit longer before significant decline.

Of course, lower hydrogen demand means less green electricity consumed in making it in the end. At 50 MWh or so per ton, the 10 million tons reduction means 500 TWh we won’t have to produce from wind, water, and solar in our fully decarbonized future. But future electricity requirements and steel demand is a different assessment, with another interesting twist. After all, wind and solar farms use a lot of steel.

There are promising iron and steel processes in laboratories that don’t use hydrogen at all. Boston Metals is working on commercialization of molten oxide electrolysis, which uses electricity in a cell at temperatures of 1,600° C to pump out pure liquid iron. Fortescue just announced that they have processed 150 kg of iron ore into iron with a novel process at much lower temperatures, about 100° C, but there are zero publications or third party assessments of the claims, so it’s merely interesting at this point. Both are probably a decade from commercial availability, but support my premise of green steel.

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