Sustainable Steel

Steel producers focus on reducing emissions via new technology


With roughly two-thirds of Americans inclined to have companies publicly report their progress on environmental issues, it’s clear that more eco-friendly manufacturing processes will become the norm, including in the production of steel.

And because “money talks,” investors who care about environmental, social and governance (ESG) responsibility are helping to truly implement change, which has steel production plants rethinking their approach to converting iron ore and scrap metal into usable steel products.

In 2006, the United Nation’s Principles for Responsible Investment first mentioned what has become known as “ESG.” Since then, ESG investment has grown in popularity with people that want to support companies that have positive environmental, social and governance principles. As an example of the amount of money involved, consider that in 2020, pension investors alone held $17.1 trillion in assets that were chosen based on ESG principles. But what does this mean for manufacturing?

Environmental impacts

Focusing on the “E” of ESG, many companies are committed to reducing their greenhouse gas emissions. While climate change has become highly politicized, the evidence among scientists is clear: Reducing carbon emissions is tantamount to stopping the progression of global warming. To that end, steel producers are taking the initiative and choosing more environmentally friendly approaches to smelting steel, which has traditionally been done through a blast furnace using coal, which introduces large amounts of CO2 into the atmosphere. It’s estimated that global steel production introduces about 9 percent of total COsub>2 emissions.

This graphic from Steel Dynamics shows the basic process involved in an electric arc furnace.

One such company is Steel Dynamics Inc., which is among the largest domestic steel producers and metals recyclers in the United States. In 2021, it was named one of the 100 Best ESG Companies by Investor’s Business Daily. Company leadership says they take “pride in our intentionally sustainable approach,” which includes utilizing electric arc furnace (EAF) technology, which limits its carbon emissions.

But Steel Dynamics isn’t alone in the United States for implementing EAF technology. In 2020, U.S. Steel announced the implementation of a technologically advanced EAF facility in Alabama near Birmingham, with an annual steelmaking capacity of 1.6 million tons. The introduction of EAF technology is part of the company’s “Best of Both” campaign, which focuses on strategies that are, “best for the planet, best for our customers and best for consumers.”

Electric over coal

The EAF approach is the energy-efficient alternative to the traditional coal-dependent blast furnace. The EAF smelting process occurs in a furnace where an electric arc between electrodes, fed by oxygen blown into the furnace, allows steel producers to extract molten iron from scrap metal. Swiss Steel Group addressed this technology in a white paper where the company introduced its “Green Steel” initiative, which is focused on ecologically produced low carbon steel.

“Steel as a material contains a very high percentage of what is known as ‘embodied energy’ that is part of almost every product and many, many services and thus their CO2 footprint,” the paper says. “Embodied energy is the gorilla in the room – the monster that no one wants to see.”

According to Swiss Steel Group, “If decarbonization isn’t possible for steel, it isn’t possible anywhere. Without measures being taken in the steel industry, decarbonization of global commodity flows is not possible and climate change cannot be stopped.”

Swiss Steel Group has made the decision to pursue the EAF method exclusively in its eight steel mills located in Europe.

“Their emissions are thus far below the industry average,” the paper says. “This route is well-established and proven, especially given the fact that steel is the material most frequently recycled worldwide.”

Are there challenges with taking the EAF route? Yes. According to Swiss Steel Group, the scrap metal volume is not always the same, and neither is the quality.

Swiss Steel Group is committed to producing steel in a way that is environmentally friendly and has researched various techniques, including those that do not involve coal.

“A decisive and very complex part of the electric arc furnace route is thus scrap logistics,” the paper says. “Compared to the blast furnace route where a single contract with a mining company can ensure the supply of raw material for years on end, the electric arc furnace route requires an elaborate collection and sorting system in cooperation with local companies and scrap dealers who have to deliver scrap in increasingly better quality with ever more elaborate and more expensive methods.”

Despite the challenges, the carbon footprint related to sourcing scrap metal is much lower than sourcing materials used in traditional coal-fed blast furnaces. Rather than having coal and other materials shipped from around the globe, Swiss Steel Group sources its scrap for its EAFs within a 60-mile radius of the processing facilities.

Hydrogen help

The EAF method relies on scrap metal to produce a finished product, but steel producers know there isn’t enough recycled scrap available to meet the world demand for steel. So for those who are focused on producing steel in an eco-friendly fashion while using raw iron ore instead of scrap, the attention has turned to hydrogen.

The use of hydrogen, which is the simplest and lightest element on the periodic table, has shown promise in decarbonizing steel production. As a fuel source, hydrogen could potentially replace natural gas (methane) and coal. And while natural gas emits about half the CO2 as coal in steel production, neither can achieve the clean burn rate like hydrogen, which simply produces steam rather than harmful byproducts.

U.S. Steel has implemented electric arc furnace technology in one of its steel production facilities, drastically reducing emissions that are common in blast furnaces where coal is used.

The problem is that generating “green” hydrogen is a costly process. It involves splitting water molecules by electrolysis, which requires an abundance of electricity. For hydrogen to be produced in a green manner, it would rely on renewable energy sources, such as solar, wind and atomic energy.

That’s not holding back Europeans who are in the process of establishing hydrogen-based steel production plants. Construction is currently underway in Sweden on a steel production plant that will reduce emissions by about 95 percent compared to coal-based production. The plant will use water from a nearby river that passes through an “electrolyzer” that will split the hydrogen from the water molecules. Steel production is slated to begin sometime in 2025. Similar projects are underway in France and Spain.

Hydrogen production technologies aren’t occurring solely in Europe, though. In June 2021, U.S. Steel announced execution of a non-exclusive memorandum of understanding with Equinor U.S. Holdings Inc. that the companies will study the potential for hydrogen development in the tri-state region of Ohio, Pennsylvania and West Virginia. There is also a focus on carbon capture and storage technology, which would seek to prohibit emissions from escaping into the atmosphere.

Swiss Steel Group also addressed the possibility of using hydrogen as a fuel source in its white paper. The company concurs the hydrogen method is a positive, environmentally friendly process, but notes that the production of hydrogen is expensive and perhaps not in enough abundance to meet the world supply for steel production. For example, the paper states that the energy available to produce green hydrogen in Europe is only 200 megawatts, which isn’t near enough to keep up with demand. Breakdowns of nuclear power plants and the restriction of power supply by various producers to control costs from plummeting also add to the complexity of the issue.

Swiss Steel Group surmises that there is a need to “establish an active presence in the political and public spheres,” and that “general conditions and economic stimuli” are needed to make gasses available in the necessary quantities.

“It is also an invitation to business partners, researchers, authorities and external organizations to decarbonize the economy together,” the paper says. As mentioned, “if decarbonization doesn’t work in the steel industry, it won’t work anywhere.”

Steel Dynamics Inc.

Swiss Steel Group

U.S. Steel

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