Written evidence submitted by UK FIRES

Professor Julian Allwood, Dr Jonathan Cullen, Dr André Serrenho, Dr Pippa Horton and Dr Sandy Skelton, at the University of Cambridge, on behalf of the UKRI funded UK FIRES Research Programme, March 2022.

Key Message

The biggest opportunity for short- and medium-term delivery of green steel is recycling powered by renewables. At present the UK exports 80% of its scrap steel, while importing iron ore and coal for new steel production. But we already have the steel we need in the UK, if instead we could recycle scrap domestically. This would supply sufficient steel for our needs; cut emissions towards zero; develop skills and create innovative upcycling technologies that we can export; secure jobs in the UK steel industry; and reduce our resource dependency on imports.

Framing

Options to make steel from iron ore with zero emissions.

There are no commercially ready, scalable options for making steel from iron ore without emissions. The three approaches which have been the focus of lobbying by blast furnace operators are:

 

Figure 1: Electricity requirements for DRI Steel production with hydrogen electrolysis

Occasionally, researchers point to charcoal as a substitute for coal in producing steel from iron ore, but this will not scale due to constraints on biomass supply.

Regardless of whether any of these technologies is scaled, none of them can be retrofitted onto existing blast furnaces. As a result, the UK’s existing law requires that all existing blast furnaces will be illegal by 2050, 78% of 1990 capacity must close by 2035, and the target for zero emissions steel in 2035, requires that all of them are shut by 2035. It is likely that the plants will all reach the end of their viable life before then, so the critical question for government is about what, if any, investment support is offered for to support new plant investments. We recommend that this support is entirely focused on electric arc furnace recycling linked to innovation in composition control in recycling. 

Zero-emissions resource constraints

In separate analysis, UK FIRES has demonstrated that all technological options for mitigating climate change depend on three fundamental zero emissions resources: zero-emissions electricity, carbon storage and biomass. The supplies of these resources are already constrained (effectively zero for storage, and already over-stretched for biomass). Future growth rates are limited not only by the complexity of the construction projections required to deliver them, but also by the requirements for consultation on public finance, land rights, societal acceptance, safety, legal and environmental compliance, access and more. Hinckley Point C will have taken 22 years from political commitment to commissioning, it if is ready on time in 2026. The Hornsey 2 Wind Farm will have taken 16 years. It is therefore unlikely that supplies of zero emissions free electricity will grow significantly faster than the linear rate at which they have expanded, both in the UK and globally, in the past decade.

Figure 2 below illustrates the consequences of this constraint on the future of global steel production. At current rates of capacity growth in zero-emissions electricity generation, and assuming “fair shares” of access to new generation across all forms of demand, the global steel industry will be able to use an additional ~500 TWh of zero emissions electricity in 2050. The figure demonstrates the trade-off between using this electricity for DRI-Hydrogen-Electrolysis or for electric steel recycling – the recycling route allows much more volume.

Figure 2: Trade-offs in global steel production subject to electricity supply constraints

Figure 2 also indicates a total limit on recycling due to scrap availability.

Localising the global analysis to the UK, steel recycling in the UK is currently (2018 data) around 1.6Mt/year, but we collect around 11Mt/year of scrap steel. Based on UK FIRES analysis, current growth rates of emissions-free electricity generation will deliver about 60% of the energy required in 2050 if we electrify all current activities (including steel making). Therefore, we can anticipate that in 2050 the UK will have sufficient power for recycling around 7Mt/yr of scrap steel. However, if instead we used the same total power for making new steel with hydrogen electrolysis and DRI production (as in figure 1), the total production would be just 1Mt/yr. We currently use about 15Mt/yr of new steel in new construction and products. However, the strategies of Material Efficiency, would allow all existing final service to be delivered with a reduced supply of 7Mt/yr.

High quality steel by recycling without emissions

Most steel recycling today produces lower grade products, in particular reinforcing bars for concrete construction. This is mainly a product of path dependency and is not a physical necessity. For example, Liberty Steel in Rotherham makes the highest quality aerospace steel from recycled scrap and Nucor in the USA, where 70% of steel production is by recycling, produce high quality products across all steel grades by recycling.

The fundamental problem of maintaining quality in steel recycling is to control contamination by copper and tin, which enter the steel waste stream via electric motors and wiring (in cars, and domestic appliances which are shredded without disassembly) or via food packaging. These contaminants lead to the problem of “hot shortness” – surface cracks in cast steel, which can grow during downstream rolling and forming operations.

Tin, in the scrap steel supply chain, is generally well controlled, because it is limited to food containers. However, copper contamination is currently a problem. Six innovation opportunities to respond to this contamination have been identified by UK FIRES, all of which could become profitable entrepreneurial business opportunities in the UK

Steel recycling, even with zero-emissions electricity, continues to cause emissions from two sources, both of which create further opportunities for UK innovation and growth:

Global steel market and the problem of investment

The global steel market is saturated, with more blast furnace capacity that required, yet the Indian Government is committed to building up to 300Mt/year of additional blast furnace capacity. As a result, European Blast Furnace operators are currently in a fight to the death, with very tight margins if any. This greatly limits their ability to invest in their own facilities, and the resulting low steel prices for both primary and recycled steel are a disincentive to innovation and new capacity development in steel recycling.

UK Government action in steel production should therefore be focused on supporting a rapid transition from blast-furnace steel production from iron ore to electric production from scrap.

The options for government support include:

Supporting Information

 

March 2022