How is the Steel Industry Becoming Carbon Neutral?
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The steel industry produces more carbon emissions than any other heavy industry, contributing around 8% of global emissions. Roughly 75% of steel is still manufactured in coal-fired furnaces. In light of this, there is a growing shift towards achieving carbon neutrality in the steel industry. New technologies, such as electric or hydrogen-powered furnaces, are driving this shift.
The production of ‘green’ steel is achievable, but currently, it is a costly process. The industry produces one of the most widely used metals in the world, found in various aspects of our day to day lives, from ships, vehicles and planes, to household items, buildings, and more.
Let’s delve deeper into how the steel industry is using cleaner technologies to meet the world’s demand for this material in a more sustainable way.
There are a few main greenhouse gases that drive global warming. Alongside carbon, methane and nitrous oxide are other powerful contributors. Carbon neutrality refers specifically to carbon emissions. Steel production facilities that are carbon neutral have balanced the amount of carbon dioxide (CO2) they produce with the amount that they remove from the atmosphere.
The removal of CO2 from the atmosphere can be achieved through two main strategies.
The first strategy is a reduction in carbon emissions. For instance, steel production companies that switch from coal-fired blast furnaces to those powered by hydrogen or renewable electricity can effectively reduce the amount of CO2 they release into the atmosphere.
The second approach to how to become carbon neutral is carbon offsetting. This involves the support of projects which remove CO2 from the atmosphere to compensate for emissions. The projects can include tree-planting initiatives, renewable energy programs, or carbon capture and storage schemes.
Carbon Neutral vs Net Zero: What’s the Difference?
Aim
Balances CO2 emission production with CO2 removal from the atmosphere
Emissions scope
Carbon dioxide only
Efficacy
Easier to achieve in the short to medium term
Methods of reducing greenhouse gases
Reduction in CO2 emissions and offsets of unavoidable CO2 emissions
Pracical examples
Tree planting initiatives to offset carbon emissions produced by steel production
Key goals
Mitigation of climate change through a reduction in atmospheric CO2 levels
Aim
Balances all greenhouse gas emissions with the removal of these gases from the atmosphere
Emissions scope
All greenhouse gases
Efficacy
More ambitious and more challenging to achieve
Methods of reducing greenhouse gases
Reducing greenhouse gases emissions and potential offsets of unavoidable emissions
Practical examples
Transition to renewable energy sources, programs to enhance energy efficiency in steel producton chains, and potential initiatives to offset remaining GHG emissions
Key goals
Mitigation of a climate change throrugh a reduction of all contributing greenhouse gases, including but not limited to CO2
The Engineering and Physical Science Research Council (EPSRC) is the primary funding body for physical science and engineering research in the United Kingdom. The organisation’s portfolio includes clean energy, manufacturing, digital technology, chemistry, and advanced materials. The EPSRC invests in high-level skills and research to improve knowledge, develop transformative tools and technologies, and secure more sustainable economic and environmental practices.
The organisation has played a key role in funding a £35 million research network that has been set up to collaborate with Swansea, Sheffield, and Warwick universities on a seven-year programme. EPSRC plans to invest £60 million between 2022 and 2025. Its goal is to fund the development of innovative approaches to emerging necessities at local, national, and global scales.
Carbon neutrality holds a number of environmental, economic, and social benefits for the steel industry. Achieving carbon neutral operations will allow the industry to decrease its CO2 emissions and directly mitigate the effects of climate change. It will also improve air quality and aid efficient use of resources and resource conservation while minimising environmental impacts.
Going carbon neutral could give steel production firms a market advantage among environmentally conscious investors and consumers. It will support compliance with increasingly strict environmental regulations and help producers to avoid non-compliance penalties. Moreover, carbon neutrality can drive future advancements and innovations in low-carbon steel production techniques. This, in turn, could potentially reduce the costs of steel production and maximise efficiency.
Carbon neutrality even offers social benefits in the context of steel production. Fewer CO2 emissions means cleaner air and lower environmental impacts. This can enhance employee health and the wellbeing of communities located near steel production plants. Producers who commit to carbon neutral practices can effectively improve their corporate images by demonstrating a high degree of environmental responsibility. Additionally, transitioning towards ‘green’ steel production helps to build a more sustainable and liveable future for generations to come.
Recent data indicates that the global steel industry may lose around 14% of its collective value if it cannot decrease its environmental impacts. Decarbonisation may allow these producers to remain competitive in their sector and retain their licenses to operate.
Measures such as installing electric or hydrogen-based steel production equipment can greatly advance companies’ efforts to achieve carbon neutrality. However, these measures may require existing equipment to be altered, retrofitted, or replaced. The optimal methods for each business will vary according to site, location, technical feasibility, market demands, costs of operation, and varying local regulations.
Additionally, research shows that scaled hydrogen production will require billions of dollars’ worth of investment into renewable power technologies. Organisations like ArcelorMittal, the largest steel producer in Europe, expect to pay up to $40 billion to decarbonise their operations.
The global steel industry is an essential part of our modern economies. However, a transition towards sustainable, low-carbon steel production is vital to mitigate the effects of climate change.
Transitioning also offers potential benefits for steel producers, including market advantages and improved regulatory compliance. It could drive improved consumer perceptions, and potentially lower steel production expenses as well.
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