Business - 30/June/2022

Heavy industry plans to tread lightly

The heavy industry sector has made significant progress in increasing energy efficiency in recent years and further gains are possible with greater electrification, digitalisation and changes in production processes. Meanwhile, material efficiency measures reducing demand for products like steel and cement offer major potential for energy savings for customers

Reducing energy demand reduces costs for heavy industry


GO ELECTRIC Electrification of processes, where possible, will immediately reduce demand and create energy savings

NEW PROCESSES Finding alternative, low-demand processes can help cut emissions

KEY QUOTE If I need to produce 10,000 tonnes of copper a day, I should first look at how little energy I can use to do that


Canadian steelmakers Algoma and ArcelorMittal Dofasco (AMD) expect to shave nearly 1% off Canada’s CO2 emissions when investments earmarked for increasing the sustainability of their Ontario steel plants are completed at the end of this decade. Emissions from Canada contribute 1.52% to total global emissions. Both companies are developing more efficient, cleaner electric arc furnaces (EAFs) and phasing out coke ovens and blast furnaces, allowing them to reduce annual CO2 emissions by about three million tonnes each.

In conventional steel production, a coke-powered blast furnace processes iron ore, producing molten iron by removing oxygen. The molten iron is then fed into a basic oxygen furnace, frequently mixed with some scrap, where the desired carbon level is reached with the addition of powdered carbon and the mixture is alloyed with other metals.

Relying instead on scrap material, EAFs avoid the initial refining step in primary steel production of removing oxygen from iron ore, as a result requiring 80-90% less energy than blast furnaces. In a place like Ontario, where over 90% of power capacity comes from nuclear power, hydroelectric, wind and other renewable generation CO2 emissions cuts from EAFs compared to traditional processes can be impressive.

Steel is the largest industrial contributor globally to CO2 emissions, followed by cement and chemicals. Together these three heavy industries account for nearly 60% of energy consumption in industry and about 70% of its CO2 emissions.

Increasing energy efficiency is widely seen as a key measure in a toolbox to get heavy industry to net-zero emissions by 2050. Given the likelihood that green, but energy inefficient hydrogen will be needed in hard-to-abate industrial sectors, containing energy requirements becomes even more important.

“Energy efficiency increases productivity and saves costs, both at a company and a societal level,” says Fleming Voetmann of Danish engineering company FLSmidth. “If I need to produce 10,000 tonnes of copper a day, I should first look at how little energy I can use to do that.”



From 2011 to 2018, industrial energy efficiency globally improved at a rate of about 2.5% a year while studies by the United States Department of Energy and International Energy Agency (IEA) indicate further efficiency gains of roughly the same order could be possible in the next few decades, notes Jeffrey Rissman of think tank Energy Innovation.

Industrial energy efficiency can be achieved at different levels, Rissman suggests. First, there is the efficiency of individual equipment like boilers and motors; then facility-scale efficiency measures such as insulating pipes for heated and cooled fuels, optimising material flows, waste heat recovery and automation processes then can save both materials and energy. “The third scale is efficiency beyond the factory, involving things like the business supply chain and designing a product so it uses fewer process steps or lower energy process steps,” he says.



Going electric is one way to increase efficiency and lower the emissions of steel production. It has been a major factor behind the decarbonisation of the steel industry in the US, where about two-thirds of steel production is already traced to EAFs, a technology that is over a century old. Instead, globally about 70% of steel production involves blast furnaces while EAFs account for about 28%.

In its Net Zero by 2050 roadmap, the IEA envisages that an increase in steel scrap collection to enable more scrap-based steel manufacturing combined with further efficiency measures can deliver most of the needed CO2 emissions reduction in the sector in the near term. The IEA sees the global market share of EAFs rising to 37% by 2030, with the share of scrap in steel manufacturing increasing to 40% from a current level of 30%.

With the recycling rate for steel already estimated at about 80%, the industry is also looking to improve the efficiency and reduce the carbon footprint of primary steel production. The availability of recycled steel cannot keep up with demand, particularly in rapidly growing economies like China and India, in part due to the fact that some recycled steel may not be suitable for high-grade applications.

For primary steel production, the alternative to blast furnaces involves Direct Reduced Iron (DRI) furnaces combined with EAFs. DRI furnaces require lower temperatures and less energy than blast furnaces and reduce iron ore to a solid state so that it can then be melted in an EAF, where the addition of scrap steel is possible. DRI furnaces commonly use natural gas but this provides an opening for the use of green hydrogen.

Some companies are already going down this route. Hybrit, a Swedish joint venture between steelmaker SSAB, mining company LKAB and utility Vattenfall, hopes to demonstrate its technology that removes oxygen from iron ore using fossil-free hydrogen on an industrial scale as early as 2026. The Hybrit pilot plant in Luleå delivered the world’s first hydrogen-reduced sponge iron to Swedish automaker Volvo in August 2021.

In cement, efficiency efforts have largely been focused on fine-tuning the recipe for its production. Since the most energy-intensive component in cement manufacturing is clinker, a binding agent, reducing clinker content while continuing to guarantee safety is central to plans to boost efficiency. To get to net zero, the IEA sees the clinker-to-cement ratio declining from about 0.71 today to 0.61 in 2030 and 0.56 in 2050.

Changing the feedstock for cement from limestone to clay, which has no embedded CO2, brings benefits in terms of emissions, lower temperatures and reduced energy requirements for calcination, notes FLSmidth’s Voetmann. Just as is the case with steel, using recycled cement in production can also yield energy savings, he adds.


Growing demand The need for materials like steel, concrete and plastics will continue to grow, so developing low-carbon production techniques is essential



“In chemicals, you buy methane both for energy and the feedstock and what we generally see is that when energy prices go up, the energy productivity can go up quite quickly, which seems to indicate that there might be further room for efficiency in the sector,” says Rebecca Dell of the ClimateWorks Foundation. Chemical companies that have faced higher energy prices tend to be more productive, she notes.

Dell points to opportunities for radical improvement in energy efficiency through “process intensification measures”. One example involves the separation of chemicals. “You need a lot of energy to do a chemical reaction and often more energy to separate the chemicals you want from those you don’t want,” Dell explains. Chemicals are now separated through thermal distillation but researchers and companies are looking into how to switch to membrane-based separation powered by electricity.

Meanwhile, two consortiumsone composed of BASF, Linde and SABIC and a second of Borealis, BP, TotalEnergies, Versalis and Repsolare working on developing electrically heated steam crackers, that break large hydrocarbons into smaller molecules at a temperature of about 850C.

While large-scale investments may usher in more efficient technologies, Voetmann believes “relatively cheap and simple” digital solutions could lead to a reduction in energy consumption in many heavy industries ranging from a few percentage points to as much as about 10%. “Adaption has been painfully slow,” he says. “Even though it’s likely the cheapest equipment you can deploy it requires a different way of thinking.”

Beyond the single facility, energy efficiency can have benefits at a broader level, for instance, if waste heat from industry is recovered to be used in district heating systems. Efficiency gains may be maximised in industrial clusters like that of Kalundborg, Denmark, where energy and other resources are shared in a circular economy approach.




Demand for steel, cement and plastics has roughly doubled globally in the last two decades and efficiency gains have slowed but not stopped emissions growth.

Material efficiency, where the same set of products are produced with fewer materials has come to the forefront, particularly for cement and steel, says Chris Bataille of the Institute for Sustainable Development and International Relations (IDDRI), a think tank.

Cement is cheap and quantities that far exceed engineering standards are routinely used in construction projects. “With just a little bit of effort, we can cut cement needed for any given building by about 25%,” says Bataille. Steel beams used in construction also tend to be all the same size, whether they are placed at the top or the bottom of a building. “If you have multiple sizes of beams, you could use less steel,” he adds.

Steel demand could potentially be reduced by up to 40% with material efficiency measures such as designing for less steel use, lengthening the lifetime of buildings and reusing steel, calculates the Intergovernmental Panel on Climate Change. Building regulations and policies can encourage material efficiency. Sweden has begun to require that applications for permits to construct new buildings contain a study on embodied carbon in the project. “This is the first step to putting new requirements in place,” says Dell.

Meanwhile, those responsible for construction projects should also simply start asking if less structural material can be used, Dell suggests. The design brief for one building constructed for the 2012 London Olympicsthe Velodromestipulated that one of the criteria for judging the design was material efficiency. “Just by asking, they ended up getting 40% less structural material,” she says.




Growing demand for plastics represents an obstacle to efforts to reduce emissions in the chemicals industry. The Organisation for Economic Co-operation and Development (OECD) found that plastic waste has doubled over the last two decades amid a “relentless” increase in demand driven by rising populations and incomes.

Most of this waste is ending up in landfills, incinerated or leaked into the environment and only 9% is successfully recycled, the OECD said. Raising the recycling rate for plastics is essential to improving efficiency, given that virgin plastic energy requirements tower over those for recycled plastics, the IEA believes.



China is the world’s largest producer of both steel and cement, manufacturing over half of the total for both materials. “It is hard to overestimate the importance of energy efficiency and decarbonising industry in China,” says Energy Innovation’s Rissman.

With most of its cement kilns built in the last 10-15 years, the efficiency of China’s cement sector is already relatively high. The Chinese government has supported energy efficiency in cement, setting standards requirements and providing grants for waste heat recovery, says Dell.

In steel, on the other hand, a lot of small, inefficient blast furnaces were built in the late 1990s and early 2000s so are still within their operational lifetimes. The government has repeatedly emphasised the need to replace these furnaces with higher quality ones. “Retiring inefficient facilities is good but what this has meant is that China has continued to build a significant number of [more efficient] blast furnaces,” says Dell. “How we square this with both global and domestic climate goals in China is a real challenge.”

Given the generally long lifecycle of equipment in heavy industry, another challenge will be to ensure the investment window for rolling out new technologies to boost efficiency and meet decarbonisation targets is not missed, says FLSmidth’s Voetmann. “If we don’t get these new technologies out and accelerate their deployment, we can never deliver on the Paris Agreement,” he says. •


TEXT Heather O’Brian PHOTO Louis-Michel Desert, Bernhard Lux & Miha Rauch


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