Iron & steel

The steel sector is currently highly reliant on coal, which is primarily used to as a reducing agent to extract iron from iron ore and to provide the carbon content needed in steel.

While the energy intensity of steel has gradually fallen in the past decade, expanding production has generally raised total energy demand and CO2 emissions. Short-term CO2 emissions reductions could come largely from energy efficiency improvements and increased scrap collection, which would enable more scrap-based electric arc furnace production (considerably less energy-intensive than primary production).

Even with higher recycling rates, scrap availability will put an upper limit on the potential for recycled production. Adopting material efficiency strategies to reduces losses and optimise use across value chains can curb demand growth and thus help in reducing CO2 emissions from the steel manufacturing. Material efficiency strategies include increasing steel and product manufacturing yields, lightweighting vehicles, extending building lifetimes and directly reusing steel (without melting).

Longer-term emissions reductions would require a step change in the way primary steel is produced through the adoption of new direct reduced iron and smelt reduction technologies that facilitate the integration of low-carbon electricity (directly or through electrolytic hydrogen) and CCUS.

Last updated Jun 16, 2020