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Renewables‐based decarbonization and relocation of iron and steel making: A case study

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  • Dolf Gielen
  • Deger Saygin
  • Emanuele Taibi
  • Jean‐Pierre Birat

Abstract

The article assesses the future role of hydrogen‐based iron and steel making and its potential impact on global material flows, based on a combination of technology assessment, material flow analysis, and microeconomic analysis. Renewable hydrogen‐based iron production can become the least‐cost supply option at a carbon dioxide (CO2) price of around United States dollars (USD) 67 per tonne. Availability of low‐cost renewable electricity is a precondition. Australia is the world's largest producer of iron ore and at the same time a country with significant low‐cost renewable electricity potential. A shift to direct reduced iron (DRI) exports could reduce global CO2 emissions substantially and at the same time increase value added in Australia, while maintaining steel production in countries that are currently processing ore into iron and steel, such as China, South Korea, and Japan. The approach could be expanded to other parts of the world and other energy‐intensive industry sectors. Such relocation analysis in a climate context can become a new industrial ecology research area. Iron and steel industry CO2 emissions can be reduced by nearly a third, around 0.7 gigatonnes (Gt) CO2 per year. To achieve these emission reductions, investment of USD 0.9 trillion, or 0.7% of the total energy sector investment needs, would be required, global DRI production would have to increase seven‐fold from today's level, and the hydrogen energy used would equal 1% of global primary energy supply. Such a shift could develop from 2025 onward at scale, if the right policies are put in place.

Suggested Citation

  • Dolf Gielen & Deger Saygin & Emanuele Taibi & Jean‐Pierre Birat, 2020. "Renewables‐based decarbonization and relocation of iron and steel making: A case study," Journal of Industrial Ecology, Yale University, vol. 24(5), pages 1113-1125, October.
    • Handle: RePEc:bla:inecol:v:24:y:2020:i:5:p:1113-1125
    DOI: 10.1111/jiec.12997
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    1. Pim Vercoulen & Soocheol Lee & Xu Han & Wendan Zhang & Yongsung Cho & Jun Pang, 2023. "Carbon-Neutral Steel Production and Its Impact on the Economies of China, Japan, and Korea: A Simulation with E3ME-FTT:Steel," Energies, MDPI, vol. 16(11), pages 1-24, June.
    2. Khusniddin Alikulov & Zarif Aminov & La Hoang Anh & Tran Dang Xuan & Wookyung Kim, 2024. "Comparative Technical and Economic Analyses of Hydrogen-Based Steel and Power Sectors," Energies, MDPI, vol. 17(5), pages 1-30, March.
    3. Nick Blume & Maik Becker & Thomas Turek & Christine Minke, 2022. "Life cycle assessment of an industrial‐scale vanadium flow battery," Journal of Industrial Ecology, Yale University, vol. 26(5), pages 1796-1808, October.
    4. Siavashi, Majid & Hosseini, Farzad & Talesh Bahrami, Hamid Reza, 2021. "A new design with preheating and layered porous ceramic for hydrogen production through methane steam reforming process," Energy, Elsevier, vol. 231(C).
    5. Alexandra Devlin & Jannik Kossen & Haulwen Goldie-Jones & Aidong Yang, 2023. "Global green hydrogen-based steel opportunities surrounding high quality renewable energy and iron ore deposits," Nature Communications, Nature, vol. 14(1), pages 1-14, December.
    6. Toktarova, Alla & Walter, Viktor & Göransson, Lisa & Johnsson, Filip, 2022. "Interaction between electrified steel production and the north European electricity system," Applied Energy, Elsevier, vol. 310(C).
    7. Andersson, Fredrik N. G., 2021. "A Scenario Analysis of the Potential Effects of Decarbonization on the Profitability of the Energy-Intensive and Natural-Resource-Based Industries," Working Papers 2021:18, Lund University, Department of Economics.
    8. Peter Klimek & Maximilian Hess & Markus Gerschberger & Stefan Thurner, 2024. "Circular transformation of the European steel industry renders scrap metal a strategic resource," Papers 2406.12098, arXiv.org.
    9. Venkataraman, Mahesh & Csereklyei, Zsuzsanna & Aisbett, Emma & Rahbari, Alireza & Jotzo, Frank & Lord, Michael & Pye, John, 2022. "Zero-carbon steel production: The opportunities and role for Australia," Energy Policy, Elsevier, vol. 163(C).
    10. Philipp C. Verpoort & Lukas Gast & Anke Hofmann & Falko Ueckerdt, 2024. "Impact of global heterogeneity of renewable energy supply on heavy industrial production and green value chains," Nature Energy, Nature, vol. 9(4), pages 491-503, April.
    11. Lopez, Gabriel & Galimova, Tansu & Fasihi, Mahdi & Bogdanov, Dmitrii & Breyer, Christian, 2023. "Towards defossilised steel: Supply chain options for a green European steel industry," Energy, Elsevier, vol. 273(C).
    12. Ren, Lei & Zhou, Sheng & Peng, Tianduo & Ou, Xunmin, 2021. "A review of CO2 emissions reduction technologies and low-carbon development in the iron and steel industry focusing on China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 143(C).
    13. Peter Klimek & Maximilian Hess & Markus Gerschberger & Stefan Thurner, 2024. "Circular Transformation of the European Steel Industry Renders Scrap Metal a Strategic Resource," ASCII Working Papers 003, Supply Chain Intelligence Institute Austria.
    14. Xiang, Pianpian & Jiang, Kejun & Wang, Jiachen & He, Chenmin & Chen, Sha & Jiang, Weiyi, 2024. "Evaluation of LCOH of conventional technology, energy storage coupled solar PV electrolysis, and HTGR in China," Applied Energy, Elsevier, vol. 353(PA).

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