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Given the accelerating problems of global warming, serious government help is essential to achieve at least partial electrification in the necessary timeframe
CEMENTING DECARBONISATION
Cement producers are switching to renewable energy to supply plants, but that will only put a small dent in decarbonisation efforts STEEL CAPTURE
Despite the high costs, the steel industry will need to rely on carbon capture and storage technologies KEY QUOTE
If the entire steel industry were to convert to hydrogen by 2050, the world would need about 1600-1650 GW of extra wind turbines The processes involved in manufacturing cement and steel, used in buildings, vehicles and infrastructure around the globe, are among the industrial activities that cause most climate change. Cement is responsible for 8% and steel 7% of the world’s carbon emissions. Both sectors are working on ways to reduce their reliance on fossil fuels driven by government policies and public pressure to re-establish the earth’s carbon balance, known as achieving net-zero, climate neutrality or being carbon neutral. The challenge the cement and steel industries face is enormous. To stay in business as well as go carbon light they must protect current investments in production facilities that have long operational lives. At the same time they must invest in making those facilities obsolete as fast as possible. Massive government subsidies to assist both sectors would appear to be unavoidable. Knowing what to support and what not to support is likely to depend on which technologies gain market backing and which do not. The industry is working on a range of options, including direct and indirect electrification of processes that no long ago were seen as impossible to electrify, both physically and economically. “Industrial plants have a service life of up to 70 years, which means that investments in purely conventional plants are already no longer compatible with the long-term goal of climate neutrality. In order to avoid stranded assets, decisions must be made in favour of climate-neutral innovation from now on,” says Frank Peter, at AgoraEnergiewende, a German green policy institute. The steel and cement industries will only achieve the required emission savings over the next decade by adopting climate-neutral key technologies. Without their participation the EU’s more ambitious climate target of at least 55% lower emissions by 2030 will be hard to reach, Agora Energiwende notes in a November 2020 report.
CEMENT TRIALS
In cement making, around 60% of carbon dioxide emissions are released during the process of limestone calcination. Since the carbon is produced as a by-product of a chemical reaction, it cannot be reduced by changing fuels or increasing manufacturing plant efficiency. Either new processes have to be found for greener cement or the carbon emitted has to be captured and put to another use or stored (CCUS). Pilot CCUS projects are underway at cement plants in the US and China, with others planned in Norway, Canada and India, reported the International Energy Agency (IEA) in 2020. Firstly, the cement industry must make sure the electricity it uses comes from a renewable energy source, the IEA points out. Swiss cement company LafargeHolcim announced in October 2020 the opening of a solar energy facility alongside its cement factory in Maryland, United States. At 10 MW the solar plant is expected to power around 25% of the factory’s annual electricity requirements, the company says. The target for 2030 is to reduce indirect emissions from the generation of electricity used to power its equipment to 13 kilograms of CO2 for each tonne of cement produced, a 65% reduction compared with 2018. LafargeHolcim already uses a 15 MW solar plant to supply 30% of the electricity used at its factory in Jordan, and in Argentina it buys 30% of its electricity through a wind power purchase agreement. Over the next five years, it hopes to install enough renewable energy generation to cover the electricity used by all its plants and contribute to powering surrounding communities. None of these efforts, however, puts the smallest dent in the carbon emissions from the operation of LafargeHolcim’s kilns. Cement kilns need to be kept at a constant temperature of 1300-1400 degrees Celsius, making supply from variable sources such as wind and solar unrealistic, explains Thomas Schulz, who heads FLSmidth, a large Danish engineering firm. “The damage to the plant’s firing system can be traumatic if the energy goes away—not only the quality of what you produce, but if the temperature is reduced, you can damage the shell and liner of the kiln,” he says. Yet, from the World Cement Association, Ian Riley sees no major role for electricity in the sector’s decarbonised future. Using electricity for kilns would require a huge investment to retrofit the equipment, he says. In any case, the cement industry is providing a useful secondary service by burning waste that is otherwise difficult to dispose of, such as paints and oils, he adds. “I’m not convinced electrification will make sense from an economic point of view, but also not from an environmental and circular economy perspective. If I think about things I would do to decarbonise the cement industry, electrification would be pretty much the last one,” he says, pointing to changes in the composition of clinker and efficiency gains. 
KILN ELECTRIFICATION
Nevertheless, research on kiln electrification is underway, though at an early stage, according to European industry body Cembureau’s 2050 roadmap. Using electrical heating, plasma or solar energy to calcinate the raw materials could result in fuel-related CO2 savings of up to 55% if renewable electricity is used, it states. Emissions can also be avoided by combusting green hydrogen, produced using renewable energy, and biomass fuels, instead of using fossil fuels to create the extreme temperatures needed in the clinker process. Combined, the adoption of these technologies could enable the cement industry to achieve near zero emissions. Remaining emissions from the calcination process would need to be captured. LafargeHolcim says it is piloting more than 20 CCUS projects in Europe and North America. In Sweden a joint effort by cement producer Cementa, a subsidiary of Germany’s HeidelbergCement, with energy company Vattenfall to electrify cement production is part of a project known as CEMZero. A feasibility study, completed in early 2019, showed that electrified cement production is technically possible and likely cost-competitive with other options to substantially reduce emissions. The partnership is constructing a pilot plant.
Energy efficiency gains at steel plants will not achieve sufficiently deep emissions reductions
STEEL EFFORTS
As a carbon sinner, steel is even worse than cement. Steel production ranks first among heavy industries for CO2 emissions and second for energy consumption, according to the IEA. It is the largest industrial consumer of coal, which provides around 75% of its energy demand. Coal is used to generate heat and to make coke, instrumental in the chemical reactions necessary to produce steel from iron ore. Steel is already heavily recycled and energy efficiency gains at plants will not achieve sufficiently deep emissions reductions, the IEA says. The main routes to decarbonising the sector are: attaching CCUS to blast furnace operation; replacing coal with green hydrogen to reduce iron ore into steel, known as direct reduced iron or DRI; and direct electrification, where an electric arc furnace can become hot enough to melt scrap steel for reuse. Electric arc furnaces have been in use for over 100 years to produce new steel from recycled scrap. As grid electricity is increasingly decarbonised, so is the operation of electrically driven furnaces. Their emissions can be further cut by replacing natural gas used to heat them with a lower carbon heat source, such as green hydrogen biofuel. The economics of meeting demand for steel by recycling more of it, however, depend heavily on the price of electricity, which is mainly a function of government policy and how the costs of not only generation but power system operation are allocated. In the UK, electricity costs are high—over 60% higher than in Germany—which is a major barrier to electrification, points out Frank Aaskov, energy and climate change policy manager at UK Steel. Using renewables electricity to make carbon-free hydrogen through electrolysis is an expensive process compared with the gasification of coal or steam-methane reforming from natural gas. Replacing the use of natural gas with green hydrogen still costs about four times more for a less efficient fuel use. Cost remains a significant barrier. “That impacts the possibility of being able to sell you steel so that’s a big barrier to hydrogen taking off at the moment,” says Aaskov. As demand for green hydrogen increases, however, economies of scale are projected to cut in and significantly reduce its production costs through cheaper electrolysers and cheaper renewable energy. Analysis from BloombergNEF, the new energy finance and research arm of news group Bloomberg, found that hydrogen produced from renewable electricity could be cost competitive with coal for steel making by 2050, if a carbon price of $50/tCO2 was applied to coking coal. Production of enough green hydrogen to make a significant dent in steel emissions, however, requires a vast increase in the development of renewable energy generation, which is also needed to decarbonise the grid. Energy analyst Chris Goodall estimated in November 2020 that if the entire steel industry were to convert to hydrogen by 2050, the world would need about 1600-1650 GW of extra wind turbines—more than two-and-a-half times the current installed capacity of wind power globally.
HYDROGEN CASE STUDIES
Despite these challenges, several steelmakers are forging ahead with research and development projects that use hydrogen. In October 2020, ArcelorMittal announced it would be offering its first 30,000 tonnes of “green steel” to customers before the year was out, scaling up to 600,000 tonnes by 2022. Hydrogen in both its blast furnace and DRI will help advance its strategy to cut emissions by 30% by 2030, it says. It is developing facilities to produce the hydrogen using electrolysers, which will undergo large-scale tests at its site in Bremen, Germany. Another plant in Dunkirk, France, is to install a large-scale DRI plant, combined with an electric arc furnace. The DRI plant will initially use natural gas but will be able to convert to green hydrogen in the blast furnace when enough of it becomes available. In Sweden, steelmaker SSAB, mining company LKAB and Vattenfall have a joint project, called Hybrit, to produce fossil-free steel using hydrogen DRI technology. A pilot plant in Luleå began operation in August 2020 and will test the production of hydrogen at the plant by electrolysing water with fossil-free electricity. The partnership is now working on scaling up the tests to an industrial scale demonstration plant, which it hopes will be operational by 2025. Meanwhile, in Germany, the country’s second largest steelmaker, Salzgitter, wants to replace the fossil fuels it uses with a gradually rising share of renewables hydrogen. It already uses an electrolyser at its plant for the steel finishing process, soon to be powered with electricity from newly built wind turbines on site. Initially DRI will use natural gas before shifting to wind power. Salzgitter also plans to use electric arc furnaces, but is waiting for both financial support for the initial investment and a change in market regulations to allow for the sale of low carbon steel, its technology boss, Volker Hille, told German news source Clean Energy Wire last year. The firm also applied for funding from the European Investment Fund in October 2020. Other projects are similarly dependent on public funding. ArcelorMittal is seeking money from the European Union’s Innovation Fund which is designed to support low-carbon investments. Sweden’s Hybrit project is being supported by the Swedish Energy Agency, which provided €57 million out of the total €200 million for the initial phase. In October 2020 the project secured a further €2 million to fund a feasibility study for its next stage. Aaskov says the UK steel industry needs a level playing field to boost the viability of decarbonisation. The EU has its Emissions Trading System and the UK is considering setting one up following its departure from the EU. “That’s unlikely to happen at a global level, so we need to look at compensation to make up for that, such as lowering the cost of industrial energy, direct capital support for industry, or in the longer term, product standards or a carbon border tax,” he says. Steel producing countries around the world are undoubtedly considering the same problem and weighing up a similar range of options in the absence of a globally agreed approach to putting the world on track for fast decarbonisation. If two countries both have steel and cement industries, but only one prices carbon or has climate change policies for its industry, then it will be outcompeted unless mitigating policies are introduced, says Aaskov.
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Catherine Early
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Ricardo Gomez Angel