60% reduction in fossil fuel use if steel scrap is used properly, report claims

Green steel and concepts such as the circular economy will play a "vital role" in decarbonisation and reaching net-zero, but much of the equipment requires an upgrade, a new report from Sandbag claims.

The report states that overhauls to existing steel technologies will be necessary over the coming decade, with a 74% benchmark being laid out that could feasibly allow the EU to exceed its renewable targets for the sector.

As much as a 41% emissions reduction could be seen by modernising equipment to allow for greater use of steel scrap alone, with further slashes coming from using different processes.

Read more: 'World's first' trucks using green steel to hit roads this year

Typically, steel made in the EU is comprised of around 20% scrap, which can significantly reduce the environmental impact of manufacturing, but existing technologies do not allow for the use of more in the mix. Most steel in the bloc is made using the so-called BF-BOF method that uses Coke as both a reductant and a source of thermal energy.

Updating to electric arc furnaces (EAFs) could allow steel to be made using 100%, which could offer use for steel scrap that is often exported away from the bloc. 100 million tonnes of steel scrap is recycled every year, with 56% of the bloc's total steel being made using recycled steel.

The EU already claims to have slashed emissions in the steel sector by around 26% since 1980, driven by increased energy efficiency and recycling.

With scrap, the emissions have already been spent due to it already having been made from raw materials once, which can provide steelmakers with valuable information on how many emissions they can save.

This can provide an alternative using existing scrap that could supplement traditional green steek, which is made using green hydrogen.

Sandbag claims that EAFs could run virtually emission-free if they're fed green electricity, although the switch to arc furnaces would mean a roughly 45 TWh increase in electricity needs annually to power them alone. With the addition of hydrogen to make green steel, this could rise to as much as 213 TWh.

Read more: World's first fossil-free steel produced by Sweden's HYBRIT

It also suggests the economics of running for fewer hours on cheaper renewable power versus continuous on-grid power are "not always favourable", and would require significant investments in solar and wind energy. 

However, optimising the use of scrap alone could also see a 60% reduction in fossil fuels, the report states. It could also provide a buffer to allow for hydrogen technology to properly develop in the coming years for the final push to net-zero.

Optimisation could be brought through several processes, including better segregation of categories, which could happen as arc furnace steelmaking expands. The firm also suggests that poor quality scrap could also see use, and should not hinder the switch.

Additional renewable energy savings could also come through the steel's reuse in the construction sector, or through "direct recycling", which involves reusing the steel without melting it down.

To help, Sandbag posits an immediate overhaul to the way steel scrap is processed in a bid to increase scrap yields and utilisation. 

Read more: Steeling the future: Using hydrogen to make green steel

"Decisions in product design must be made urgently to ensure the sustainability of scrap recycling. Designing products for easier recycling at end of life and easier removal of contaminants will ensure a better, higher-quality scrap supply", it says.

It also suggests that carbon trading systems are inherently harmful for the switch to green steel, likely as the offsets allow for steelmakers to continue polluting, provided they pay.

Should these changes happen rapidly, much of the overhauls to the sector could take place "within this decade", which would provide a significant headstart to the bloc's plans for net-zero by 2050.

"The challenge is not about innovative technology but rather access to zero-carbon electricity and better practices in the scrap market. EU funding such as expected from the Climate Investment Fund (now the Innovation Fund) might be more suitable to address these EU-wide challenges than sponsor individual conversion projects", the report states.

For hydrogen steel to be a low-carbon solution, the hydrogen produced must be zero carbon. This should be reflected in policies such as the Renewable Energy Directive (for its industry target), especially as part of the Delegated Acts on renewable fuels from non-biological origin (RFNBO).

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