In the last article, we saw how the energy demand in heavy trucks might lean more towards fully electrifying the industry. However, the demand for energy in heavy industries differs from the transport sector. In the former, the need to provide process heat is crucial to produce the final products required for the energy transition targets. This presents a challenge for the Electrify everything argument. In some cases, the heat produced via electricity is not as efficient as when the same electricity is used to produce Hydrogen.
Steel Industry
The steel industry accounts for 7% of the world’s CO2 emissions. For every ton of steel produced (from iron ore) nearly 2 tonnes of CO2 is released into the atmosphere. Therefore, decarbonizing the steel industry will definitely be the world’s agenda going forward.
One should always note that it is not possible to eliminate carbon from the steel industry since carbon is the hardening element in steelmaking, therefore it is part of the chemical composition.
Steel can be produced either from refined Iron Ore or by recycling old steel scraps. In fact, 40% of the world’s steel production comes from recycled steel.
Methods of Refining Iron Ore
There are multiple ways to refine iron ore and produce iron pellets that could be then transformed into steel.
Blast Furnace Route
Two-thirds of the new steel on the market came from the Blast Furnace path, while the Direct Reduced Iron method accounted for one-third of the market.
Blast Furnaces are what comes to mind when you think of Iron refining. Big tubular metal tanks with red hot metals and extreme heat pouring out of them. Blast furnaces use metallurgical coke and air to produce heat, remove the iron ore’s impurities, and produce Iron Pellets.
The pellets are then transferred to a Basic Oxygen Furnace, which uses even more heat, to produce Steel. The BF + BOF route consumes approximately 20.8 GJ per ton of new steel.
When considering Hydrogen as a replacement for coal, it could only partially replace the coke used in the BF process, all while having to alter the chemical process that has been in use before the introduction of Hydrogen. This results in a technical and financial challenge, as altering the chemical process will require rigorous testing and a change in both methods and equipment all while needing more investments to decarbonize this route.
Direct Reduced Iron Route
In this path, the Iron is not blasted with heat like in the previous BF+BOF path. Instead, Iron Ore is heated to temperatures lower than in Blast Furnaces and the impurities are ‘Reduced’ by using a mix of Hydrogen and Carbon Monoxide gas to extract the impurities by chemically reacting with the impurities (namely Oxygen).
The Hydrogen & Carbon Monoxide are produced by Steam Reforming Natural Gas or through Coal Gasification. Iron pellets produced via the DRI route typically end up converted to steel using an Electric Arc Furnace.
Now, different companies have been testing the use of Hydrogen instead of Natural gas in the DRI process. For example, a pilot plant in Sweden has been built by SSAB in 2020 to test Hydrogen as a reducing agent prior to building a commercial volume demo plant by 2025.
As the name suggests, EAFs use electricity and carbon rods to produce heat and carborize iron. EAFs are typically used to recycle steel, but they could also be used to replace the Basic Oxygen Furnace & make steel out of refined Iron. A DRI + EAF route consumes between 12-15 GJ/ton of New Steel.
It is becoming clearer every day that if the steel industry is decarbonized, the DRI+EAF route will grow in popularity and might become the dominant process (unlike the current BF+BOF route).
There have been studies of other methods that eliminate the need for the high-temperature process of heat, thus eliminating the need for fuels altogether. The Metal Oxide Electrolysis method is the most prominent method closest to commercialisation.
The Metal Oxide Electrolysis Route
The MOE method is used to refine Iron Ore or even the low-grade version of iron ore (something the DRI method cannot do). This method is currently championed by a company called Boston Metals, which has recently built a pilot plant in the United States.
The MOE method needs to increase the temperature of the pig iron/iron ore to 1,600 degC prior to commencing the electrolysis part of the process. Here the preheated Iron Ore is added to a bunker filled with an electrolyte and a fixed Anode. The Anode is responsible for extracting the Oxygen from Iron Ore while the purified Molten Iron is attracted to the Cathode. After which the purified Iron leaves the chamber to be formed into Pellets that will then be fed into an Electric Arc Furnace. The MOE+EAF route has been estimated to use 14 GJ/ton of finished steel.
From the graph, we can see that Green Hydrogen will be required in the steel-making industry and electrifying the whole industry is not market-ready yet. The only way the steel industry could be fully electrified right now is when our demand for steel decreases considerably for it to make sense to only recycle the current stock of steel we have in use. One of the things the energy transition will need is more steel than our current demand.
What does this mean for Kuwait?
Our steel industries’ output was below 2 million tons/year. To put this into perspective, UAE’s 2021 output was 5 million tons/year. The fact that our output is not as high as our neighbours’ could play well into our case as this means that we do not need to invest in changing our current processes as much as we can direct that investment into building a Green Steel industry, whether we decide on using Hydrogen in the DRI+EAF route or electrifying the whole process, in case of the MOE+EAF route.
Either way, building a Green Steel industry in Kuwait with the intention of selling those products to Europe will increase the share of renewable energy projects in the country as there will be a higher demand for this type of energy. Furthermore, this will open the door to more foreign investments in new Green Steel & Renewable Energy capacities.