According to an industry research released on Tuesday, as crude steel production expands through the Blast Furnace (BF) and Basic Oxygen Furnace (BOF) methods, India and Southeast Asia will worsen their emission profile.
According to an analysis by Wood Mackenzie, a Verisk company, when output triples and carbon emissions double from current levels, the aggregate emission intensity in these locations will improve (Nasdaq:VRSK). Decarbonisation actions in these regions would strengthen in the second half of the projection horizon, according to a research released in Singapore.
India has set a goal of producing 300 million tonnes by 2030-31, when domestic demand is likely to exceed 200 million tonnes. Steel mills in India produced 118 million tonnes of crude steel in 2021.
According to a new study, global steel industry carbon emissions are expected to drop by 30% by 2050, compared to levels in 2021. It is tough to decarbonize the steel industry. Increased green steel goals, on the other hand, are changing the supply environment, with stakeholders urging steelmakers to abandon the traditional (very polluting) blast furnace strategy in favour of low-emission alternatives.
China is expected to lead the world in absolute emissions reductions. According to Wood Mackenzie, China’s emissions are likely to halve between 2021 and 2050, with a substantial portion of the reduction coming from a predicted drop in steel output.
Because emerging countries are hesitant to accept and contribute to emissions reductions, developed economies like Japan, South Korea, Taiwan, the EU, the United Kingdom, and the United States will have to do more to decrease emissions. While maintaining or expanding steel production, these economies will lower emissions by nearly half of what they are presently.
“Policy modifications and increased attention on scrap use are driving up the global proportion of electric arc furnaces (EAF) in steelmaking,” Wood Mackenzie research director Malan Wu said in the report.
“From now until 2050, the output of basic oxygen furnaces (BOFs) will go down by 0.5% per year, while the output of electric arc furnaces (EAFs) could go up by 2.3% per year.” By 2050, EAF will be used to make 48% of all steel, up from 30% last year. This will put it on par with the traditional BOF method.
“The steel industry’s carbon emissions might be 30% lower by mid-century than they are now, thanks to green hydrogen-based direct reduction iron (DRI), scrap use, and the implementation of carbon capture, utilisation, and storage (CCUS).”
The scrap-EAF pathway is the least polluting of the various technologies. Because of this, steelmakers are interested in scrap. Scrap mixing in the blast furnace pathway may increase as quality improves and converters are upgraded. The commercialization of the hydrogen-based technique will also assist DRI.
The steel sector is expected to use hydrogen by 2027, with the European Union leading the way. By 2050, the production of hydrogen-based steel will account for 10% of total steel production, or 232 million tonnes (Mt).
By the middle of the century, Wood Mackenzie predicts that 40% of DRI will be hydrogen-based.
Carbon offset programmes like CCUS will make an even bigger difference. The steel industry, according to Wood Mackenzie, will be able to capture, store, and potentially utilize 178 Mt of residual emissions. This will account for 5% of the projected 30 percent decrease in carbon emissions by 2050.
“Blast furnace gas emissions are intricate,” Wu continued, “and extracting carbon from them is tough.” Technical innovation and bulk efficiencies, we think, will allow a maximum capture rate of about 20-25 percent in developed countries like the US and the EU.
“Increased reliance on smelting reduction technologies such as Hisarna and Corex, which produce top-gas with significantly higher carbon content, can help to increase capture rates. This will make it much easier to separate carbon from other pollutants. Many technologies have yet to prove their commercial viability, even after being deployed in Asia and Europe.”
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