The Swedish Hybrit project to replace coal with hydrogen in steel production was launched in 2016. It was the first of its kind. Now, the three biggest steel companies in the world are following suit, or overtaking.
Carbon-free aluminium is now being produced, and lower carbon cement is on the market.
Just a few years ago the climate strategy of heavy industry around the world could be summarised in three letters: CCS. Or rather in six letters “Say CCS”, as nothing much happened. After almost 20 years of hyped-up talk, no CO₂ has been captured anywhere in the world from the production of steel, cement, glass, aluminium or paper pulp. The big EU project ULCOS (ultra-low-CO₂ steelmaking), which began in 2004, eventually sank without a trace. Its main message was to keep blast furnaces, keep coal and coke, but add CCS.
Only months after the Paris climate agreement, in April 2016, Swedish steelmaker SSAB, iron ore miner LKAB and power producer Vattenfall launched a new decarbonisation strategy: to produce hydrogen with renewables and use the hydrogen to reduce iron oxide ore pellets to sponge iron. This was a bolt out of the blue, a radical departure from the previous strategy.
This is no small matter. The steel industry generates between 7 and 9 percent of direct emissions from the global use of fossil fuel, according to worldsteel.org
ArcelorMittal is the biggest steel producer in the world. It does the same thing as SSAB and is also trying another very different no-carbon tech. The company states that it is:
“exploring iron ore reduction technologies using hydrogen and electrolysis, both of which could deliver significant carbon reductions if powered with clean electricity. In March 2019, we launched a €65 million pilot project in Hamburg, Germany to test hydrogen steelmaking on an industrial scale, with an annual production of 100,000 tonnes of steel. At the same time, we have been exploring direct iron ore reduction using electrolysis for a number of years. We lead the EU-funded Siderwin project, which is now constructing an industrial cell to pilot the technology.”
The world’s second biggest steel producer, Chinese Baowu, has a hydrogen partnership with Linde, a global industrial gases company “with the aim of beating the Swedish steel maker SSAB to commercialising clean steel production”, according to an article in the Australian Financial Review, which considers this as potentially bad news for exports of Australian coking coal.
The third biggest steel producer, NSSMC (Nippon Steel), is also working with hydrogen (as well as CCS) and also boasts a new steel for hydrogen infrastructure.
It is too early to say “problem solved” for steel CO₂, but it surely looks as if hydrogen can do the job, whereas CCS is going nowhere.
Hydrogen is getting much more attention for reasons aside from steel production, such as seasonal term storage to balance wind and solar or for ships, trucks and buses. The implication is that hydrogen will be produced by electrolysis using renewable electricity, abundant and cheap wind and solar. If there is a business case for hydrogen in the steel industry, fossil power is doomed, which is exactly what most of the NGOs have been saying for a number of years.
As of spring 2020, the era of cheap renewables has moved considerably closer. Nuclear power and fossil power are running well below capacity, while renewables are growing in absolute numbers and increasing their market share, at least in Europe, North America, China and India. Coal power backed down globally in 2019 and will surely lose still more ground in 2020.
The growing availability of green electricity also opens up the possibility to cut CO₂ from heating, either by replacing fossil gas with electric heating or replacing fossil gas with hydrogen.
The biggest outstanding industrial CO₂ issue is cement production. Its CO₂ emissions are on the same scale as steel, upwards of 8 percent of global fossil emissions, and are generated from limestone and the fuels used to heat it.
Cement is not a hi-tech product. You heat limestone from a nearby quarry, grind it to make cement and sell it to construction companies that mix the cement with sand and pebbles to form concrete.
The cement industry in Europe gets free allocations for all its ETS emissions. This practice is justified by what is known as carbon leakage, meaning that if the industry had to pay for any of its emissions, Europe would be overwhelmed with even dirtier imported cement. The evidence is scant, as cement is a cheap and bulky product which is not commonly traded across the globe. So they have not worried overmuch either.
The construction companies have not seen CO₂ from cement as their problem, as they don’t emit it. Much of the construction industry deserves top marks for green-washing and CB (corporate bullshit). But not all.
This is beginning to change. In 2019, Skanska, a Swedish international construction company launched “green concrete”, which “emits up to 50 percent less carbon than regular concrete because some of the cement has been replaced with slag”.
The attitude shift can be seen in a more subtle way. Skanska’s annual report specifies not just its own emissions (GRI Scope 1) but also Scope 3: indirect greenhouse gas emissions from sources not owned or directly controlled by the organisation.
Scope 1 emissions were 213 kilotons of CO₂ in 2019, and dropping at a good pace. But Scope 3 emissions are 693 kilotons, mainly from cement. Counting emissions in this way increases Skanska’s footprint by a factor of more than 3, and including this in its report is the opposite of green-washing.
So why is it there? Customers, at least, take an interest in such figures. It may also become a requirement of environmental building certification systems. Financing with green bonds is also important for Skanska, and gives more access to long-term capital, such as from pension funds.
Slag cannot replace a very large part of world cement, but a market transformation has to start some where. Thomas Concrete, a much smaller but still international Swedish company, has set a target to use more than 50 percent of alternative binders by 2025. It states in its Sustainability Report 2019 that:
“Today alternative binders are the most efficient way to achieve an immediate reduction. Furthermore, a comprehensive review of our cement suppliers, including evaluations of their facilities and production techniques, allows us to better calculate our environmental impact. We see a challenge in the future for the availability of slag and fly-ash, our today most used alternative binders. There is a higher demand and limited access for these products in all markets. Therefore, Team Thomas is focused on research to find other types of alternative binders.”
It is not a huge technical challenge to find alternative binders, in other words non-lime materials that can glue together sand and pebbles to make concrete. There are several candidates that are either good enough or improvable. Obviously the economy is of some importance, but cement is not a big part of the cost of a building.
The real issue is not technology or economics. CCS is at least as complex, expensive and time-consuming as alternative binders; after all Skanska has been able to achieve a 50 per cent reduction in a single stroke.
The real issue is to create incentives to make all concrete green, preferably greener than Skanska’s. This takes some political resolve.
Other heavy industries are minor compared to cement and steel, but the picture is much the same. If the aluminium industry were required to produce green aluminium, inert anodes would replace traditional carbon anodes in aluminium production within a few years, to produce aluminium with no CO₂ and no F-gas emissions.
The first batch of such aluminium was in fact produced in December 2019 by Alcoa in Pittsburgh, using technology developed by Elysis in Canada, a joint venture between Alcoa and Rio Tinto. It was delivered to Apple for use in its laptops. Apple also helped to finance the development. The Canadian and Quebec governments contributed 60 million Canadian dollars each. This was enough to overturn the environmentally disastrous Hall-Héroult process, which has produced all the aluminium in the world since 1886.
Fredrik Lundberg
