EAFs imperfect solution to 'green' steel future

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.

By Zach Schumacher