EAFs imperfect solution to 'green' steel future

  • Market: Hydrogen, Metals
  • 23/09/21

While most new steel capacity additions in the US are aimed at cutting greenhouse gas emissions, the most popular technologies being deployed by such projects still rely on a CO2-heavy process, which fail to meet net-zero targets.

US steelmakers are actively promoting the need to reduce CO2 and greenhouse gas emissions in their operations as a move to meet internal and external targets and to get ahead of potential regulations. Steelmakers have put particular emphasis on lower cost, more efficient production models driven by more ferrous scrap and iron consumption through growing electric arc furnace (EAF) capacity. EAFs account for over two-thirds of current US steel production capacity and will only take a greater share over the next few years, with a number of expected expansions.

Between 2022 and 2024 in the US at least 10.75mn short tons (st)/yr of steelmaking capacity is expected to come online, all EAF-based. This includes Nucor and US steel saying this week they will each build a 3mn st/yr flat rolled EAF mill. US Steel has also curtailed operations at its Mon Valley and Granite City basic oxygen furnace (BOF) plants, despite near-record high margins.

While EAFs emissions footprint compares favorably to BOF plants, capacity expansions based on existing production techniques do not necessarily improve overall emissions, and in some ways while merely shift the burden on others.

EAF emissions challenges

EAF steelmakers require as much as 10-30pc of their melts to be iron metallics, according to the International Iron Metallics Association and market sources. Flat-rolled operations, like those proposed by Nucor and US Steel for their expansion projects, tend towards the high end of that share, meaning those mills would consume roughly 1.09mn-1.63mn metric tons (t)/yr.

But not all metallics are alike, meaning their emissions can vary greatly. For each ton of pig iron produced plants emit 1.855t of CO2, according to World Steel Association data, while natural gas powered direct reduced iron production is at 0.78t CO2/t steel. Based on the similar process, emissions from pig iron production mirrors those from fully integrated facilities.

And because of the US's reliance on imports of metallics, such production is a significant source of indirect emissions built into existing EAF operating models, which vary depending on where US consumers buy their pig iron. Brazilian producers typically consume charcoal in their blast furnaces, for example, while Black Sea producers consume coking coal. Although producing pig iron with charcoal emits less CO2, it requires a large space to grow biomass, such as eucalyptus trees as a raw material.

In either case, any imported iron metallics must be shipped by long distances to the US via dry bulkers, which also adds to indirect emissions.

EAFs also require much more electricity to produce steel than BOFs. Electricity accounts for roughly half of the energy input costs for EAFs compared to 7pc for BOF operations, according to a 2019 report from World Steel. That raises questions on indirect emissions based on how utilities are generating electricity locally for the grid; fossil fuels generated 60pc of US electricity in 2020, according to Energy Information Administration data. Some steel producers have mitigated these indirect emissions with local solar and wind capacity.

This electricity goes on to power graphite electrodes in the furnace, which themselves emit an additional 0.65t CO2/t of electrode, according to World Steel data.

EAF still trumps BOF

Despite all of this, when replacing capacity previously occupied by BOF operations, EAFs remain a greener option overall. Scrap can make up to 90pc of total melts in EAFs compared to roughly 30pc for BOFs, depending on the availability of raw materials and chemistry requirements of the finished product. Remelting scrap back into crude steel emits few greenhouse gases, according to a 2012 report from the US Environmental Protection Agency.

EAFs generate 52pc less or an average of 1.02t of CO2/t of steel when compared to BOFs, according to a 2015 study done by the Ural Federal University, but for those operations to contribute significantly to reducing emissions they must replace BOFs, not simply operate in addition to them.

Going 'greener'

Some steel producers have proposed alternative production models, most of which focus on hydrogen-based steel production. Although its not clear exactly how much CO2 it would emit, SSAB is aiming for "fossil-free" steel powered by hydrogen, compared to 1.75t CO2/t for its BOFs and 0.68t CO2/t for its EAFs currently.

Such technologies are not expected to be implemented on a large scale for the foreseeable future though. "Evolution of emerging and breakthrough technologies to viable commercial scale, while there's lots of [research and development] underway, the technology is still decades off," said North Star Bluescope chief executive climate change Gretta Stephens on 20 September.


Sharelinkedin-sharetwitter-sharefacebook-shareemail-share

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News
28/03/24

Taiwan scrap imports fall 13pc on year in February

Taiwan scrap imports fall 13pc on year in February

Singapore, 28 March (Argus) — Taiwan's ferrous scrap imports fell on the year in February, reflecting rising prices, subdued activity during the holiday period and high stocks. Ferrous scrap imports totalled 218,887t, down by 21.3pc on the month and 13.2pc on the year, customs data showed. Trade sources attributed the decline to rising seaborne scrap prices in November and December. Trade sources said lower bookings were expected given the lunar new year holiday in Taiwan on 8-14 February, with mills likely to have been prudent in their procurement since November as delivery of containerised scrap usually takes 8-10 weeks from the signing of an agreement. The US remained Taiwan's top ferrous scrap supplier in February, providing 81,249t, although this was down by 32.6pc on January and 25.1pc on the year. Ferrous scrap imports from Japan fell by 10.3pc on the month and 15pc on the year to 55,510t in February. Imports from Dominican Republic rose by 7.1pc on the month and 16.9pc year on year to 17,563t. Scrap supply from Australia fell by 47.8pc year on year to 9,921t. Trade sources said underwhelming fundamentals in Asia meant Australian sellers focused on south Asia, where they could achieve stronger margins. Looking ahead, a slowing construction sector could mean lower scrap imports. "The shortage of manpower and rising building material costs have impacted the initiation pace of new construction projects," the Taiwan Institute of Economic Research said on 25 March. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Read more
News

Japan’s SMM eyes Li-ion battery recycling plant by 2026


28/03/24
News
28/03/24

Japan’s SMM eyes Li-ion battery recycling plant by 2026

Tokyo, 28 March (Argus) — Japanese battery cathode producer Sumitomo Metal Mining (SMM) plans to set up a lithium-ion (Li-ion) battery recycling plant in western Japan's Ehime prefecture by June 2026. The recycling plant is expected to have a processing capacity of around 6,000-7,000 t/yr of black mass, equivalent to batteries for around 60,000 electric vehicles, a company representative told Argus on 28 March. Black mass is the shredded remains of cathode materials such as nickel, cobalt and lithium. The company will start construction sometime during March-April 2025, but the timing for commercial operations was undisclosed. SMM has also entered into a partnership with nine domestic recycling partners to build a supply chain for collecting used Li-ion batteries, the company representative added. SMM produced cathodes using nickel and cobalt from recycled Li-ion batteries in June 2023. Domestic battery producer Prime Earth EV Energy proved the quality of SMM's used cathodes in performance testing. The recycled ratio of nickel and cobalt used in the test was more than 6pc and 16pc respectively. This exceeds the standard rates that EU battery regulations tentatively set as minimum recycling requirements for each material, a SMM representative previously told Argus . The EU regulation is expected to take effect from 2031 after approvals by member countries. By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Centaurus' Jaguar Ni mine in Brazil eyes 2027 output


28/03/24
News
28/03/24

Centaurus' Jaguar Ni mine in Brazil eyes 2027 output

Singapore, 28 March (Argus) — Australian mining company Centaurus Metals said that its Jaguar nickel sulphide project in Brazil is undergoing a feasibility study and aims to start production in mid-2027. Jaguar, bought from Brazilian mining firm Vale in 2020 , is estimated to hold 109mn t of 0.87pc grade nickel for an estimated 948,900t of contained nickel. The nickel product will be largely targeted at the Atlantic market, with expectations that demand will strengthen in the region. "Demand for nickel we believe is not going away. And if you look at what's going to happen in the US and European markets in particular, nickel will probably be a bigger part of the battery composition than anywhere else," Centaurus' managing director Darren Gordon said at the Tribeca Futures Commodities conference held in Singapore on 26 March. "There's a huge amount of nickel that still needs to come into the market." Many Australian mining firms have struggled with a slump in global nickel prices earlier in the year because of a supply glut caused by increased volumes from Indonesia, coupled with a slowdown in demand. Several Australian mines have halted operations , while other processing facilities were placed on care and maintenance programmes . But Centaurus is hopeful that Jaguar will be able to compete on a cost and environmental basis with Indonesian supplies. "Nickel is going to continue be supplied out of Indonesia in very large ways so we are going to compete on costs. And we think that when we deliver the feasibility study, we will be able to demonstrate that we can compete on costs. But overlay on that, we have this very low carbon footprint associated with our project," Gordon added. Centaurus said Jaguar is one of the lowest carbon footprint nickel project globally, following a review done by a metals and mining ESG research company. Once operational, greenhouse gas emissions from the project are forecast to be 7.27t of carbon dioxide/t of nickel equivalent, which is assessed to be lower than 94pc of other global nickel production. By Sheih Li Wong Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Automakers divert away from blocked Baltimore port


27/03/24
News
27/03/24

Automakers divert away from blocked Baltimore port

Pittsburgh, 27 March (Argus) — Automakers are adjusting their supply routes following yesterday's collapse of the Francis Scott Key Bridge at the Port of Baltimore, the busiest US port for auto shipments. The Port of Baltimore handled 847,158 autos and light trucks last year, more than any other US port, according to the Maryland state data, with imports accounting for about 75pc of the volume, the Alliance for Automotive Innovation said. With vessel traffic in and out of the port suspended indefinitely automakers said they will reroute deliveries though other east coast ports. This includes General Motors, which said it still expects minimal impact on its operations. Ford said it has already secured shipping alternatives where workarounds are necessary, but did not share details. For Mercedes-Benz, Baltimore is among its busiest ports for imports. The company said it has flexibility to adjust its supply routes and noted ports in Charleston, South Carolina, and Brunswick, Georgia, as other top import locations. The port closure has no effect on Mercedes vehicle exports or parts supply at its Tuscaloosa, Alabama plant, the company said. Volkswagen Group, which includes the Audi and Porsche brands, said it received about 100,000 vehicles last year through Baltimore to ship to US dealers in the Mid-Atlantic and northeast, but its operations will not be limited since its facility is located on the seaboard side of the bridge, at Sparrows Point. Volkswagen said it may see some trucking delays from highway rerouting, however. Toyota relies on the Port of Baltimore primarily for vehicle exports, but said it is not the company's main North American port. Stellantis, maker of numerous brands including Chrysler and Jeep, said it has begun discussions with transportation providers to ensure an uninterrupted flow of vehicles. The US imported 723,435 cars and light trucks in January, up from 634,228 a year earlier, according to customs data. Mexico supplied just over one-third or 2.97mn of the total number of US vehicle imports in 2023, followed by Japan and Canada, with 17.3pc and 16.3pc, respectively. By James Marshall Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Red Sea tensions could halt EU India HRC quota overfill


27/03/24
News
27/03/24

Red Sea tensions could halt EU India HRC quota overfill

London, 27 March (Argus) — Elevated shipping times caused by tensions in the Red Sea could prevent India's hot-rolled coil (HRC) safeguard quota in the EU from overfilling on 1 April, as participants had expected. India shipped just over 520,000t of HRC to the EU in December and January, according to customs data, all of which appears to have been cleared into the first-quarter quota. Including unused tonnage rolled over from the previous quarter, this quota totalled 574,550t, with just 46,934t currently unused, meaning that 527,000t is utilised. This suggests that material shipped from India in February will predominantly comprise the April-June quota of 294,662t. Vessel tracking data show that India shipped 404,582t of flat-rolled products to the EU in February, although the data do not give detail by product. Indian material could theoretically use one-third of the other countries' quota in April-June too, under the safeguard regulation. That quota will fill quickly again, as has been the case in recent quarters. Longer shipment times mean that most Indian material shipped in the second half of February — 215,170t of flat-rolled — will arrive after 1 April, and either be cleared or held over until the next quarter: after day one, any material cleared above the quota amount pays a straight 25pc duty, so it is likely that some will be held over from April-June and clear into the July quota. Vessels going round the Cape of Good Hope rather than sailing through the Red Sea will take an average of 45.5 days to arrive at EU ports from India in April, according to data from Kpler. Vessels arriving by the Red Sea in January were taking around half this time, or even less. This means that around 189,000t of February shipments could be cleared into the April-June quotas on 1 April, plus tonnage held over from the current period, totalling 46,934t for HRC. Assuming that all the material shipped in the first half of February is HRC, the quota would not overfill on day one, even with the material held over from this quarter factored in. But it is expected to fill later in the month. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more