IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v14y2021i21p7395-d673295.html
   My bibliography  Save this article

An Economic Model to Assess Profitable Scenarios of EAF-Based Steelmaking Plants under Uncertain Conditions

Author

Listed:
  • Francesco Facchini

    (Department of Mechanics, Mathematics and Management, Polytechnic University of Bari, 70125 Bari, Italy)

  • Giorgio Mossa

    (Department of Mechanics, Mathematics and Management, Polytechnic University of Bari, 70125 Bari, Italy)

  • Giovanni Mummolo

    (Ionian Department in Juridical and Economic Systems of the Mediterranean: Society, Environment, Cultures, University of Bari, 74100 Bari, Italy)

  • Micaela Vitti

    (Department of Mechanics, Mathematics and Management, Polytechnic University of Bari, 70125 Bari, Italy)

Abstract

The steelmaking processes are considered extremely energy-intensive and carbon-dependent processes. In 2018, it was estimated that the emissions from global steel production represented 7–9% of direct emissions generated by fossil fuels. It was estimated that a specific emissions value of 1.8 tCO 2 per ton of steel was produced due to the carbon-dependent nature of the traditional blast furnace and basic oxygen furnace (BF-BOF) route. Therefore, it is necessary to find an alternative solution to the BF-BOF route for steel production to counteract this negative trend, resulting in being sustainable from an environmental and economic point of view. To this concern, the objective of this work consists of developing a total cost function to assess the economic convenience of steelmaking processes considering the variability of specific market conditions (i.e., iron ore price, scraps price, energy cost, etc.). To this purpose, a direct reduction (DR) process fueled with natural gas (NG) to feed an electric arc furnace (EAF) using recycled steel scrap was considered. The approach introduced is totally new; it enables practitioners, managers, and experts to conduct a preliminary economic assessment of innovative steelmaking solutions under market uncertainty. A numerical simulation has been conducted to evaluate the profitability of the investment considering the economic and environmental costs. It emerged that the investment is profitable in any case from an economic perspective. On the contrary, considering the environmental costs, the profitability of the investment is not guaranteed under certain circumstances.

Suggested Citation

  • Francesco Facchini & Giorgio Mossa & Giovanni Mummolo & Micaela Vitti, 2021. "An Economic Model to Assess Profitable Scenarios of EAF-Based Steelmaking Plants under Uncertain Conditions," Energies, MDPI, vol. 14(21), pages 1-17, November.
    • Handle: RePEc:gam:jeners:v:14:y:2021:i:21:p:7395-:d:673295
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/14/21/7395/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/14/21/7395/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Abhinav Bhaskar & Mohsen Assadi & Homam Nikpey Somehsaraei, 2020. "Decarbonization of the Iron and Steel Industry with Direct Reduction of Iron Ore with Green Hydrogen," Energies, MDPI, vol. 13(3), pages 1-23, February.
    2. Chen, Qianqian & Gu, Yu & Tang, Zhiyong & Wei, Wei & Sun, Yuhan, 2018. "Assessment of low-carbon iron and steel production with CO2 recycling and utilization technologies: A case study in China," Applied Energy, Elsevier, vol. 220(C), pages 192-207.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Grzegorz Komarzyniec, 2022. "Cooperation of an Electric Arc Device with a Power Supply System Equipped with a Superconducting Element," Energies, MDPI, vol. 15(7), pages 1-18, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ren, Lei & Zhou, Sheng & Ou, Xunmin, 2023. "The carbon reduction potential of hydrogen in the low carbon transition of the iron and steel industry: The case of China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 171(C).
    2. Qiu, Ziyang & Sun, Jingchao & Du, Tao & Na, Hongming & Zhang, Lei & Yuan, Yuxing & Wang, Yisong, 2024. "Impact of hydrogen metallurgy on the current iron and steel industry: A comprehensive material-exergy-emission flow analysis," Applied Energy, Elsevier, vol. 356(C).
    3. Chen Ya & Zhang Xintian & Liu Haoxiang, 2021. "Investigating the Impact of Capacity Utilization on Carbon Dioxide Emission: Evidence from China’s Iron and Steel Industry," Journal of Systems Science and Information, De Gruyter, vol. 9(6), pages 681-703, December.
    4. Maruf, Md. Nasimul Islam, 2021. "Open model-based analysis of a 100% renewable and sector-coupled energy system–The case of Germany in 2050," Applied Energy, Elsevier, vol. 288(C).
    5. Qiang Yue & Xicui Chai & Yujie Zhang & Qi Wang & Heming Wang & Feng Zhao & Wei Ji & Yuqi Lu, 2023. "Analysis of iron and steel production paths on the energy demand and carbon emission in China’s iron and steel industry," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(5), pages 4065-4085, May.
    6. Wu, Xiao & Xi, Han & Qiu, Ruohan & Lee, Kwang Y., 2023. "Low carbon optimal planning of the steel mill gas utilization system," Applied Energy, Elsevier, vol. 343(C).
    7. Yuancheng Lin & Honghua Yang & Linwei Ma & Zheng Li & Weidou Ni, 2021. "Low-Carbon Development for the Iron and Steel Industry in China and the World: Status Quo, Future Vision, and Key Actions," Sustainability, MDPI, vol. 13(22), pages 1-28, November.
    8. An, Runying & Yu, Biying & Li, Ru & Wei, Yi-Ming, 2018. "Potential of energy savings and CO2 emission reduction in China’s iron and steel industry," Applied Energy, Elsevier, vol. 226(C), pages 862-880.
    9. Song, Weiming & Zhou, Jianan & Li, Yujie & Yang, Jian & Cheng, Rijin, 2021. "New technology for producing high-quality combustible gas by high-temperature reaction of dust-removal coke powder in mixed atmosphere," Energy, Elsevier, vol. 233(C).
    10. Michel Noussan & Pier Paolo Raimondi & Rossana Scita & Manfred Hafner, 2020. "The Role of Green and Blue Hydrogen in the Energy Transition—A Technological and Geopolitical Perspective," Sustainability, MDPI, vol. 13(1), pages 1-26, December.
    11. Salvatore Digiesi & Giovanni Mummolo & Micaela Vitti, 2022. "Minimum Emissions Configuration of a Green Energy–Steel System: An Analytical Model," Energies, MDPI, vol. 15(9), pages 1-21, May.
    12. Shi, Qiaoling & Shan, Yuli & Zhong, Chao & Cao, Ye & Xue, Rui, 2022. "How would GVCs participation affect carbon intensity in the “Belt and Road Initiative” countries?," Energy Economics, Elsevier, vol. 111(C).
    13. Changwan Gu & Jingjing Xie & Xiaoyu Li & Xu Gao, 2023. "Levelized Cost Analysis for Blast Furnace CO 2 Capture, Utilization, and Storage Retrofit in China’s Blast Furnace–Basic Oxygen Furnace Steel Plants," Energies, MDPI, vol. 16(23), pages 1-20, November.
    14. Xie, Heping & Gao, Xiaolin & Liu, Tao & Chen, Bin & Wu, Yifan & Jiang, Wenchuan, 2020. "Electricity generation by a novel CO2 mineralization cell based on organic proton-coupled electron transfer," Applied Energy, Elsevier, vol. 261(C).
    15. Jiang, Jingjing & Ye, Bin & Liu, Junguo, 2019. "Peak of CO2 emissions in various sectors and provinces of China: Recent progress and avenues for further research," Renewable and Sustainable Energy Reviews, Elsevier, vol. 112(C), pages 813-833.
    16. Tobias Mueller & Steven Gronau, 2023. "Fostering Macroeconomic Research on Hydrogen-Powered Aviation: A Systematic Literature Review on General Equilibrium Models," Energies, MDPI, vol. 16(3), pages 1-33, February.
    17. Bin Xu, 2022. "How to Efficiently Reduce the Carbon Intensity of the Heavy Industry in China? Using Quantile Regression Approach," IJERPH, MDPI, vol. 19(19), pages 1-24, October.
    18. Jiang, Wei & Chen, Yunfei, 2022. "The time-frequency connectedness among carbon, traditional/new energy and material markets of China in pre- and post-COVID-19 outbreak periods," Energy, Elsevier, vol. 246(C).
    19. Roberto Sañudo & Rohit Raj Goswami & Stefano Ricci & Marina Miranda, 2022. "Efficient Reuse of Railway Track Waste Materials," Sustainability, MDPI, vol. 14(18), pages 1-25, September.
    20. Jenny Ibarguen & Rosaura Castrillón, 2024. "ISO 50002 and ITS Contribution to the Decarbonization of SMES: Case Study," International Journal of Energy Economics and Policy, Econjournals, vol. 14(1), pages 224-244, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:14:y:2021:i:21:p:7395-:d:673295. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.