CO2-Reduction Green Steel: This is how tool and mould making becomes climate-neutral
Selecting a tool steel supplier is a key decision for the tool maker, the tool user and the end customer. It is not only crucial to select the correct steel grade for a specific tool and mould but it is more and more important keep the overall CO2 emissions for steel products and the supply chains of final customers in mind.
The European steel industry has more than 500 production sites operating across 23 EU Member States, the European Commission reports. The EU was the second biggest steel producer in the world, accounting for around 150 million tonnes of production, after China, whose production currently represents around 53 percent of global production (1 billion tonnes). This huge production volume also contributes heavily to CO2 emissions. The EU steel industry has already reduced emissions by 26 percent since 1990, driven by energy efficiency improvements and higher recycling rates. Achieving climate-neutrality by 2050, however, requires radical changes to the way steel is produced. This is also crucial for tool and mould makers who want to offer their customers CO2-neutral products.
To achieve Europe’s targets, the steel industry must reduce its emissions by 30 percent by 2030. This requires a large-scale transformation to climate-friendly technologies. Roland Berger’s new study, “Green deal for steel. What will it take and who will pay?”, considers with which technology and at what cost the CO2 reduction target can be achieved.
According to Roland Berger calculations, to meet the climate targets by 2030, the industry would have to produce about one third of its present primary steel making output, or 29 million metric tons, in a more climate-friendly way, instead of using the existing coal-fired blast furnaces. Technologies based on hydrogen and — on a transitional basis — natural gas offer the greatest potential here. For example, according to the analysis, if a hydrogen-based direct reduction technology were used in the production chain, this would result in additional costs for the industry totaling € 17 billion in 2030. Of this, € 3.5 billion would result from the new technology itself — operational expenditures and equipment depreciation — and € 13.5 billion from the very high costs of CO2 emissions for the remaining 66 million metric tons, approximately, of steel produced by conventional methods.
Tata Steel: “Transition to Direct Reduced Iron Technology possible before 2030”
Commenting on the study, Tata Steel said that their own “ambition to make steel using hydrogen by 2030 is feasible.” After the first step, which involves switching to gas, the step to hydrogen could be made. An important condition was that all local and national government parties must cooperate. The Roland Berger study showed that it was possible to transition to Direct Reduced Iron technology (DRI) before 2030, the group states in a press release. This technology is used to produce iron from natural gas or hydrogen in combination with electric furnaces. Setting up a DRI installation means that the current process of iron melting using blast furnaces, in combination with coke gas plants, will cease. Once the new installations are in operation, several plants on the site may close, thereby further reducing other emissions.
Climate neutral week at Uddeholm plant
Efforts to advance the production of Green Steel are made across the board by all major players. Only in December 2021, Uddeholm (Part of Voestalpine) started a “Climate neutral week”. The producer of tool steel and other steel products ran a week-long trial of producing climate neutral tool steel to show that it was possible. During the Climate Neutral week LNG (Liquefied Natural Gas) was replaced with fossil-free LBG (Liquefied Bio Gas). Also all internal transportation will run on fossil-free electricity or 100 percent share of HVO100. These measures lead to a significant reduction of up to 90 percent of CO2 emissions. The remaining 10 percent consist of carbon in scrap metal and graphite electrodes. As of today there are no fossil-free replacements, the company pointed out. The steel manufacturer compensates for these 10 percent with Gold Standard certificates in accordance with the UN sustainability goals.
“We have developed an ambitious phased plan for decarbonizing steel production in the form of greentec steel, and this will allow us to play our part in achieving the climate goals,” says Herbert Eibensteiner, Chairman of the Management Board of Voestalpine. The greentec steel campaign brand has been designed as the umbrella under which this comprehensive decarbonization strategy to meet the EU’s climate goals will be communicated.
Specifically, the group is planning to gradually shift from the coal-based blast furnace route to steel production using green electricity. In addition to scrap, liquid pig iron, and sponge iron (HBI) produced in a direct reduction plant, are the most important pre-materials in this process. Direct reduction is a key bridging technology for decarbonizing steel production. It reduces iron ore to iron with natural gas, rather than coal and coke, resulting in fewer CO2 emissions. Using this hybrid technology would allow the CO2 emitted during steel production at Linz and Donawitz to be significantly reduced, by around 30 percent. It is also the prerequisite for achieving the hydrogen-based transformation by 2050.
International projects and partnerships for Green Steel
Other companies pool their efforts in joint projects such as H2 Syngas. Saarstahl and Dillinger have joined this project with Paul Wurth, a Luxembourg engineering company belonging to the SMS group to use their own process gases and significant quantities of hydrogen in the blast furnace process. With this technology, the steel companies are further reducing their carbon emissions and taking the next important step toward carbon-neutral steel production. H2 Syngas is a part of the cross-border hydrogen project in the Saar region.
As part of the joint H2 Syngas project, the steel companies intend to continue working with Paul Wurth to develop the technology of using own process gases for a blast furnace of Rogesa Roheisengesellschaft Saar, a subsidiary of Dillinger and Saarstahl. The new so called dry reforming process developed by Paul Wurth enables the gas produced in the coke oven to be converted into a hot reduction gas, or “syngas”. This gas is enriched with hydrogen and then used as a reducing agent for the reduction of iron ores. Injecting the hot reducing gas into the blast furnace leads to a significant reduction in coke consumption and thus to a reduction in carbon emissions. “The use of process gases for metallurgical purposes makes it possible to cut carbon emissions by up to twelve percent,” explains Dr. Karl-Ulrich Köhler, Chairman of the Board of Management of Dillinger and Saarstahl. “By using hydrogen, we can further improve and actually nearly double the potential reduction of carbon. The creation of an adequate energy infrastructure is a precondition for this.”
Another example is the partnership between German steel producer GMH Gruppe (based in Georgsmarienhütte), metal trading company Heine + Beisswenger Stiftung and tool manufacturer Sandvik Coromant. This marks the first-ever partnership in the German steel economy entered into by medium-sized companies with the aim to reduce the carbon footprint of products. To the value chain of the partnership, GMH Gruppe will contribute CO2-neutral steel bars (to be produced with 100 percent green power in the future) and the transport of the material by LPG-powered trucks. As a trading company, Heine + Beisswenger will make use of renewable energies, including for green logistics to the customer. Tool manufacturer Sandvik Coromant will provide final machining services in the context of a Green Factory concept. This approach will significantly improve the CO2 balance of the supplied products. In December, H+B already transported the first steel freight with a Mercedes-Benz eActros from Daimler Truck.
The partners to the agreement plan to have the CO2 balances audited and certified by external bodies. By accounting the savings of CO2 and their explicit waiver of CO2 compensation certificates, the three companies are creating a basis for the future classification as Green Steel products. The project prepares the ground for immediate action to support the necessary transformation of the German steel making and trading industries.
Schaeffler signs off-take agreement with H2 greensteel for supply of Green Steel
Competition for the still rare supply of Green Steel is already in full swing: To source Green Steel, the automotive and industrial supplier Schaeffler has entered into an agreement with Swedish start-up company H2 greensteel. The company wants to purchase 100,000 tons of the virtually CO2-free steel, which is produced using hydrogen, on an annual basis with effect from 2025. This makes Schaeffler the first tier 1 supplier worldwide to become a customer of the innovative start-up company. The agreement is set for the long-term and includes the delivery of strip steel.
The steel produced in Sweden requires non fossil fuels and reduces Schaeffler’s annual CO2 emissions c. p. by up to 200,000 tons. “Steel purchasing is strategically important to Schaeffler,” states Andreas Schick, Chief Operating Officer at Schaeffler. “We process a significant amount of steel and view this as a crucial driver in supporting the decarbonisation. Already today Schaeffler is relying increasingly on low CO2 steel production processes among its suppliers. An essential element is also the use of the circular economy, which we want to implement consistently.”
Harnessing Green Hydrogen and renewable electricity
As one of Germany’s biggest CO2 emitters, Thyssenkrupp’s steel business can make a big difference in terms of climate protection. After all, there is also great potential for savings here. “Hydrogen is the key to turning the big lever we have in reducing CO2 emissions in the steel industry,” explains Dr. Arnd Köfler, Executive Board Member for Production at Thyssenkrupp Steel. By using climate-neutral hydrogen, the company could avoid 20 million tons of CO a year in steel in the long term.
Thyssenkrupp’s steel and hydrogen experts have teamed up with the Essen-based energy company Steag. Together they are working on a feasibility study to supply the Duisburg steel mill with green hydrogen by building a water electrolysis plant at the Steag site in Duisburg-Walsum. By 2050 Thyssenkrupp Steel plans to gradually convert steel production in Duisburg to direct reduction with hydrogen.
With their Green Steel products, DEW is also supporting its customers in verifiably reducing the CO2 footprint of their entire value chain. The manufacturer uses the electric arc furnace for the production of their carbon steels. For green crude steel production they use only electricity from renewable sources. “As soon as hydrogen is available in sufficient quantities, we will offer CO2-neutral steels through the additional use of hydrogen/electricity instead of natural gas for our hot stamping and heat treatment stages,” the company sates on its website. The company reduced CO2 emissions from its steel production from 429 kg/t crude steel (global average crude steel 1680 kg/t) to 107 kg/t through the use of green electricity.
Apart from that DEW requires its suppliers to provide evidence of material origin, CO2 emissions and compliance with ethical standards. They give preference to logistics companies that use ecologically optimised networked modes of transport and also provide evidence of the ecological benefits. The customer receives proof of the climate protection contribution in accordance with the Greenhouse Gas Protocol.
With Arcelor Mittal another major player in the European steel industry announced that its Sestao plant in Spain will become the world’s first full-scale zero carbon-emissions steel plant. The development is the result of a memorandum of understanding signed with the Government of Spain that will see an investment of € 1 billion in the construction of a green hydrogen direct reduced iron (DRI) plant at its plant in Gijón, as well as a new hybrid electric arc furnace (EAF).
By 2025, the Sestao plant will produce 1.6 million tonnes of zero carbon-emissions steel. Central to this development will be the construction of a 2.3 million-tonne green hydrogen DRI unit in Gijón. Around 1 million tonnes of DRI will be transported to Sestao to be used a feedstock for its two EAFs.
In addition, Arcelor Mittal is developing a new project at its Hamburg site in Germany aimed at the industrial scale production and use of Direct Reduced Iron (DRI) made with 100 percent hydrogen as the reductant, with an annual production of 100,000 tonnes of steel.
The process of reducing iron ore with hydrogen will first be tested using grey hydrogen generated from gas separation. The company aims to achieve the separation of H2 with a purity of more than 97 percent from the waste gas of the existing plant, using a process known as “pressure swing absorption”. This will allow them to develop technological solutions at industrial scale to reduce iron ore with only Hydrogen and in absence of carbon. In the future, the plant should also be able to run on green hydrogen when it is available in sufficient quantities at affordable prices, with the clean energy for hydrogen production potentially coming from wind farms off the coast of Northern Germany.
Obviously, Green Hydrogen is the key enabler for the production of climate neutral steel. With Green Energy and the expansion of a European hydrogen network, steel mills could fast become role models for climate friendly production. This also allows tool and mould makers to source green products and help their customers achieve their CO2-reduction goals.