The Role of Green Electricity in European Steel Industry Decarbonization

The article analyses the prospects of European steel industry decarbonization as part of the general accord to achieve climate neutrality and the role of decarbonized electricity in this process. The decarbonization of the EU economy started with energy sector but the focus of the EU climate policy gradually shifted to other carbon-intensive hard-to-abate industries, with steel industry as a major polluter due to Blast Furnace – Oxygen Converter cycle coal burning. The article shows that the positive experience of power sector decarbonization through coal substitution by biomass and carbon-capture retrofits are only partially applicable and do not deliver desired results. A much better solution is new low-carbon technologies of smelting reduction and direct reduction of iron, modified to achieve significant drop in CO2 emissions. Analyzing the development and implementation of low-carbon iron production technologies in EU countries the author shows that their natural limit rests with its dependence on secure green power supply. That means that the development of European green steel production is linked to availability of sufficient amounts of decarbonized electricity, and therefore, is dependent on the progress in EU energy sector decarbonization and its outcome. The chosen model of the energy system is also of high importance, because it will determine the ability of the countries to attract new production sites, and ultimately whether European green steel will be competitive on local and global markets.