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Call for Evidence

Technological Innovations and Climate Change: Green Steel

The next subject to be examined in the Environmental Audit Committee’s work on Technological innovations and climate change will be Green steel.

Steel is a crucial material for building wind turbines, electric vehicles, and other future clean technologies, but the steelmaking process itself produces significant greenhouse gas emissions.[1]

The production of a tonne of steel generates almost two tonnes of CO2 emissions, according to steel industry figures, and accounts for as much as five percent of the world’s total greenhouse gas emissions.[2] Steelmaking is a problem area for climate change, since it is highly energy intensive to create and the majority of production worldwide is reliant on coking coal in the production process.

Carbon emissions from the steel sector can be reduced in three ways: through technological advances; more use of recycled steel; and reductions in demand for steel.[4]

Direct reduced iron (DRI) technology, an emerging technology, can be used with hydrogen to displace coal as the reduction agent in steelmaking and can provide a clean energy source.[5] 

Electric arc furnaces (EAF), which have been in use for some time, allow steel for some applications (for instance, the automotive industry) to be made from a 100% scrap metal feedstock. This greatly reduces the energy required to make steel, and the furnace can be supplied with green electricity.[6]

UK Steel’s director general has said that decarbonising steel production is an enormous challenge, both technically and commercially, and will be very difficult to do by 2035 since production methods are not yet available at commercial scale.[7]

The debate over a proposed mine for coking coal under the Irish Sea has brought the question of whether coal is still necessary to produce steel in the UK into focus. The Climate Change Committee (CCC) has recommended that, ‘to indicate ambition’, the Government set targets for ore-based steelmaking to reach near-zero emissions by 2035, through a combination of hydrogen DRI and EAF technology.[8] In its Industrial Decarbonisation Strategy, issued in March 2021, the Government indicates that, in collaboration with the Steel Council, it will consider the implications of this recommendation and the business environment necessary to support the transition.[9]

Other countries are beginning to make progress in clean steel production:

  • In June 2021, a steelmaking plant in Sweden successfully demonstrated the feasibility of using hydrogen rather than coking coal for production processes for the first time. Its ultimate goal is to eliminate CO2 emissions altogether from the steelmaking process by using only fossil fuel-free feedstock and fossil fuel-free energy in all parts of the value chain, with a view to being first to market with green industrial-level steel as early as 2026. The Swedish steelmaker SSAB has recently announced plans to invest over £3.5bn over the eight years to 2030 to "largely eliminate carbon dioxide emissions" from its entire Nordic manufacturing operations by the end of the decade.[11]
  • Germany’s largest steelmaker, Thyssenkrupp, said it plans to build a factory to produce carbon neutral steel by using green hydrogen generated by 2025. By 2030 it expects to make three million tonnes annually. The German Government has a proposed plan to support low-carbon steelmaking, including new criteria for awarding public contracts, a minimum quota of low-carbon or carbon-neutral steel in finished products, and a new “green steel” label.[13]

 

The UK is yet to pilot clean steel technologies, nor has it set a policy framework. The CCC’s 2021 progress report stated that the £250 million Clean Steel Fund, intended to support the UK steel sector “to move to a decarbonisation pathway compatible with net zero”, on which the Government consulted in 2019, appeared to have made no progress.[14]

In July 2021 the Business, Energy and Industrial Strategy Committee found that there was an imminent need to replace the blast furnaces in the UK’s steelmaking plants, requiring “key decisions” and a certainty absent from the Industrial Decarbonisation Strategy.[15] That Committee recommended that the Government commit to a pilot of hydrogen-based steel production in the UK, funded from partnership with interested steel businesses or backed from the Clean Steel Fund.[16]

In response the Government indicated that it was working with the sector to better understand the industry’s plans for decarbonisation investment, and stressed that decarbonisation decisions for each UK site were primarily commercial ones. Ministers declined to commit to a hydrogen-based steel production pilot and instead indicated that the industry would be able to bid for support for industrial decarbonisation projects under the Net Zero Strategy.[17]

 

Call for evidence

The Committee is inviting written submissions on:

  • The technologies there are to produce “green steel”; how close they are to commercialisation; and the benefits and risks of each
  • The relationship between low-carbon steelmaking technologies and the development of other decarbonising technologies
  • The timescales needed to achieve fossil fuel feedstock replacement and fossil fuel-free energy throughout the supply chain for steel products
  • The targets the Government should set for low-carbon steelmaking in the UK
  • The policy support for low-carbon steelmaking in the UK provided in the Industrial Decarbonisation Strategy and the Net Zero Strategy
  • How effective the Clean Steel Fund is expected to be in helping to deliver decarbonised fuel capacity in the UK
  • Any additional policy support required to encourage the transition to low-carbon steelmaking
  • The desirability or otherwise of establishing a low-carbon steelmaking pilot at a UK site
  • The consequences to the UK steel sector from a failure to invest in alternative technologies in a globally competitive market

Written evidence should be submitted through the Committee’s web portal by 10 March 2022. Respondents need not answer all the questions and evidence need not be limited to these questions. Submissions should be not more than 3,000 words but shorter submissions are welcomed and encouraged.

We encourage members of underrepresented groups to submit written evidence. We aim to have diverse panels of Select Committee witnesses and ask organisations to bear this in mind when we ask them to choose a representative. We are currently monitoring the diversity of our witnesses.

It is recommended that all submitters familiarise themselves with the Guidance on giving evidence to a Select Committee of the House of Commons which outlines word count, format, document size, and content restrictions.

 

[1] Major breakthrough for steel industry': Swedish plant produces sponge iron using hydrogen

[2] One order of steel; hold the greenhouse gases | MIT News | Massachusetts Institute of Technology

[3] Major breakthrough for steel industry': Swedish plant produces sponge iron using hydrogen

[4] Rebecca Willis et al. Letter to the Prime Minister re Woodhouse Colliery

[5] Assessment of hydrogen direct reduction for fossil-free steelmaking - ScienceDirect

[6] Oral evidence taken before the Business, Energy and Industrial Strategy Committee on the Clean Growth Strategy and International Climate Change Targets, 18 June 2019, HC 871, Q289;

[7] UK Steel comment on the 6th Carbon Budget | Make UK

[8] Climate Change Committee, The Sixth Carbon Budget: Manufacturing and construction, December 2020, p.53  

[9] BEIS. 2021. Industrial Decarbonisation Strategy

[10] 'Major breakthrough for steel industry': Swedish plant produces sponge iron using hydrogen; Volvo Group and SSAB to collaborate on the world’s first vehicles of fossil-free steel - SSAB

[11]CO2-free steel by 2030: Why Sweden's SSAB is pulling forward its green transition plan by 15 years”, Business Green, 31 January 2022.

[12] Thyssenkrupp presents plan for carbon neutral steel plant | Reuters

[13] Environment: Germany aims for carbon-neutral steel by 2050 - The Local

[14] CCC. 2021. Progress report to Parliament. In March 2021 it was reported that the fund would open in 2023: Financial Times, “Pressure grows to accelerate £250m green fund for UK steel industry”,  30 March 2021.

[15] Business, Energy and Industrial Strategy Committee, Fourth Report of Session 2021-22, Liberty Steel and the Future of the UK Steel Industry, HC 821, para 176

[16] Ibid, para 186

[17] Business, Energy and Industrial Strategy Committee, Eighth Special Report of Session 2021-22, Liberty Steel and the Future of the UK Steel Industry: Government Response to the Fourth Report of the Business, Energy and Industrial Strategy Committee, HC 1030, paras 77–79.

This call for written evidence has now closed.

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