CISA: Steel industry embarks on green transformation

As the main force for China's economy and society to achieve comprehensive 'green' transformation, the steel industry should actively take the road to carbon neutrality, says He Wenbo, executive chairman of the China Iron & Steel Association.

"The transformation of the steel industry is essentially a green transformation," He told delegates attending the 19th China Steel Industry Chain Market Summit in Beijing over November 25-26, adding that innovation is the only way for the whole industry to advance.

Over the past few years, China has ramped up efforts to promote steel industry transition to a new green and low-carbon future, with both the central government and steelmakers striving to meet the "2C" goals mandated for the steel industry - namely to reach peak carbon emissions by 2030 and to achieve carbon neutrality by 2060, as Mysteel Global has reported.

For example, many Chinese steel mills are working hard to develop the rich/full hydrogen gas-based technologies, aiming to go a step further in reducing carbon emissions from steel production.

Baosteel Zhanjiang lron & Steel Co., a subsidiary of China's largest steelmaker Baowu, is building a hydrogen gas-based direct reduced iron facility in South China's Guangdong province, for example. Scheduled to start heat load tests by the end of this year, the project aims to reduce carbon dioxide emissions by more than 500,000 tonnes/year compared with a blast furnace of the same capacity, as reported.

In fact, should the global steel industry worldwide produce 'green' steel from zero-emissions hydrogen, the global carbon emissions could fall by 54% by 2050, according to a new report by UK-based ESG Clarity, a provider of news and research for the global financial community.

As one of the largest contributors to carbon emissions, the steel industry accounted for 7% of total emissions worldwide in 2019, the report noted, and left unchecked, emissions are forecast to rise by 44% by 2050.

On the other hand, global steel demand in 2022 was estimated at 1.8 billion tonnes and is forecast to grow to 2.5-2.8 billion tonnes by 2050 as economies develop and mature, with the drivers of the increase being concentrated in emerging markets, the release estimated.

As such, the primary lever for the steel industry to decarbonise is unlikely to come from lower demand, ESG Clarity argued. Rather, the industry will have to adopt new production processes, including producing steel from zero-emissions hydrogen. "This is of global relevance as without the decarbonisation of the steel industry, countries will fail to achieve their net-zero commitments," it said.

The challenge for investors and the industry is cost, the release pointed out, explaining that an estimated investment of $2.8 trillion will be required for producing green steel from zero-emissions hydrogen. There are also several obstacles to overcome before the technology can be widely adopted, it added, including supply of hydrogen and high-grade iron ore, and access to renewable energy.

Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and SteelMint.