The aggregate emission intensity in these regions will improve
as production triples and carbon emissions will in turn double from current
levels, said a report by Wood Mackenzie, a Verisk business (Nasdaq:VRSK).
India and Southeast Asia will
worsen their emission profile as their crude steel production rises through the
Blast Furnace (BF) and Basic Oxygen Furnace (BOF) route, an industry report
said on Tuesday.
The
aggregate emission intensity in these regions will improve as production
triples and carbon emissions will in turn double from current levels, said a
report by Wood Mackenzie, a Verisk business (Nasdaq:VRSK). Decarbonisation
initiatives in these regions will intensify in the second half of the forecast
horizon, said the report released in Singapore.
India
has set a target of producing 300 million tonnes by 2030-31 when domestic
consumption is expected to be more than 200 million tonnes. Indian mills
produced 118 million tonnes of crude steel in 2021. Overall, Global steel
industry's carbon emissions is expected to fall 30 per cent by 2050 compared to
2021 levels, according to a new report.
Steel
is a challenging sector to decarbonise. However, evolving green steel goals are
altering the supply landscape and steelmakers are under pressure from
stakeholders to reduce their reliance on conventional (highly polluting) blast
furnace route and adopt low-emission alternatives.
China
is expected to take the lead in reducing absolute emissions. Wood Mackenzie
estimates Chinese emissions to halve between 2021 and 2050, and a major
proportion of emissions reduction will come from the projected fall in steel
output.
Mature economies such as Japan, South Korea, Taiwan, EU, UK, and US will need
to do more to curb emissions as developing nations will be slow adopters and
small contributors to emissions cuts. These economies will abate emissions by
nearly 50 per cent from current levels while maintaining or increasing their
steel output.
Wood
Mackenzie research director Malan Wu said in the report, The global share of
electric arc furnace (EAF) in steelmaking is rising with policy shifts and
increasing focus on scrap use.
Basic
oxygen furnace (BOF) output will decline 0.5 per cent annually until 2050,
whereas EAF output could increase 2.3 per cent yearly in the same period. By
2050, EAF will account for 48 per cent of the technology share used in
steelmaking, up from 30 per cent last year, making it almost on par with the
traditional BOF method.
Together
with green hydrogen-based direct reduced iron (DRI), scrap use and adoption of
carbon capture, utilisation and storage (CCUS), steel industry's carbon
emissions can decline 30 per cent from current levels by mid-century.
The
scrap-EAF route is the least polluting among available technologies. This makes
scrap a sought-after metallic by steelmakers. Scrap blending will potentially
increase in the blast furnace route with quality enhancements and converter
retrofits.
DRI
will also receive a boost, primarily due to commercial adoption of the
hydrogen-based route. The steel industry is expected to commence hydrogen use
as early as 2027, with EU taking the lead. Hydrogen-based steel production will
eventually account for 10 per cent of the total steel output or 232 million
tonnes (Mt) by 2050.
Wood
Mackenzie projects that 40 per cent of DRI produced by mid-century will be
hydrogen-based. Carbon offset measures such as CCUS will lend further support.
Wood Mackenzie believes that the steel industry will be able to capture, store
and potentially utilise around 178 Mt of the residual emissions.
This
will make up 5 per cent emission savings of the 30 per cent carbon emissions
decline by 2050. Carbon offset measures such as CCUS will lend further support.
Wood Mackenzie believes that the steel industry will be able to capture, store
and potentially utilise around 178 Mt of the residual emissions.
Wu
said, Blast furnace gas emissions are complex, and it is challenging to
separate carbon from them. We assume that technological advancement and bulk
efficiencies will allow a maximum capture rate of about 20-25 per cent in
advanced economies such as the US and EU.
Capture
rates can be improved by increasing the reliance on smelting reduction
technologies such as HIsarna and Corex that produce top-gas with much higher
carbon concentrations. This will make it easier to separate carbon from other
impurities.
However, these technologies have yet to prove their
commercial viability, even after being deployed in Asia and Europe. Capture
rates can be improved by increasing the reliance on smelting reduction
technologies such as HIsarna and Corex that produce top-gas with much higher
carbon concentrations. This will make it easier to separate carbon from other
impurities.