How to align the steel industry with 1.5C by 2030: Ask an Expert with Dr. Chris Bataille
While there is emerging consensus on the fossil free steel sector of 2050, there is much debate and disagreement on the transition to get there. Expert Chris Bataille shares his wisdom.
With 2030 just 6 years and 7 months away, time is short to make the 52% greenhouse gas reductions necessary to keep the planet from warming beyond the 1.5 degree celsius threshold that the IPCC has marked as essential for a livable planet for most species alive today.
This means ending fossil fuel use as rapidly as possible and building new energy and economic systems that do not depend on fossil fuels.
Determining the 2030 emissions reductions target for steel has been a hot topic the last couple of years and one of the top experts relied upon to help answer this critical question is Dr. Chris Bataille.
As the lead author for the 2021 IPCC Industry Chapter, Dr. Bataille has become the go-to technical expert on how to decarbonise heavy industrial sectors and led the Net Zero Steel Project in 2021 which provided a first of its kind 1.5C scenario for steel based on ground up approach, using the existing global database of steel production facilities from Global Energy Monitor.
SteelWatch Campaign Lead, Margaret Hansbrough, asked Dr. Bataille how steel can get on track for 1.5C by 2030 and what stands in the way of achieving this essential climate goal.
Getting on track for decarbonisation
Question: Hi Chris. Can you start things out by talking about where we need to get to by 2030 in steel decarbonisation in order to be on track for the 1.5C pathway for the sector?
Chris: Thanks Margaret. Glad to start there. A few key targets I will start with from the Net Zero Steel Project to help get us oriented. First, the project focused on direct steel industry emissions, which means we did not include the downstream emissions from electricity or upstream emissions from coal mine methane, mainly because we assumed if we are bothering to decarbonize steel, electricity would be moving as fast or faster That being said, we came up with a 29-31% direct emissions reduction target (compared with a 2020 baseline) that is needed for the steel industry by 2030. For emissions intensity per ton, a 27-29% reduction is needed for 2030.
Now to answer how the heck do we achieve this? We have to start by making sure that all new primary steel production facilities globally have a clear path to zero emissions in their 20-25 year lifespan starting now essentially. For existing primary steel production facilities where coal is used in blast furnaces to reduce iron for steelmaking, this means putting a deadline on coal use and not relining those blast furnaces for another 20-25 years of coal based production. This is a big change of course but absolutely necessary.
Eventually, ideally in the early 2030’s, green hydrogen electrolysis will take over first, perhaps follow by various forms of direct electrolysis of iron ore within a decade or so, but it will still need a bit more time to mature and be cost effective in the regions where it will be best suited.
This means no new unmitigated blast furnaces can be built past 2025 and the vast majority of current blast furnaces in use will have to forgo new relinings.
The next five years
Question: Next up, can you point out and explain the best three near-term solutions that you hope to see be successful for decarbonization in the next five years or so?
Chris: Sure. Let’s first talk about an important dichotomy in the global steel outlook. That is between OECD and non-OECD countries. I will try not to over complicate things but its something to keep in mind because most steel is made in non-OECD countries and nearly all the future growth the same, but current OECD countries are currently better positioned to end coal-based steelmaking sooner and provide the policy and market conditions for low and zero emissions steelmaking to achieve the needed commercialization and affordability by 2030.
If I had to narrow it down to 3 I would go with:
- Shift new primary steel production to direct reduced iron (DRI) production and couple that with green hydrogen infrastructure so that those DRI facilities can be on track to use green hydrogen by the early 2030’s.
- Maximize scrap and EAF production, especially in China, but maximizing overall material efficiency throughout steel’s value chain and by steel consumers is critical. Using steel more efficiently throughout our economy from cars, to the grid, to buildings is the easiest way to reduce emissions.
- Build out massive amounts of renewable electricity in regions that will be optimal for green iron and steelmaking and work across major economies to drive down the cost of hydrogen electrolyzers to make them competitive by 2030. This potentially means decoupling iron making and steel making in some regions like Australia and East Asia to optimize the value chain.
The end of coal in steel?
Question: When do you see the end of coal in steelmaking? Does it vary depending on region?
Chris: Yes, I think we can definitely see an end to coal for steelmaking, hopefully by 2030 in OECD economies like the US, Canada, and European Union. Although Japan and South Korea still lag behind other OECD countries on this, I could see South Korea jumping ahead on leveraging green iron from Australia and other allied countries in order to reconfigure their steel value chain and stay ahead. This is important because neither Japan nor South Korea have ideal CCUS capacity potential. If China can make a major jump toward clean electrification and secondary EAF production in the coming years, it could really ramp down its coal use for steel by 2035-2040.
The region that is the biggest riddle is certainly India. The country has domestic metallurgical coal sources and is expected to grow its steel production and consumption more than any other country. But we are seeing public investment there in green hydrogen infrastructure in the billions of dollars already and companies doing a few of the things I already mentioned like DRI investments and large scale renewables investments.
The end of coal for steelmaking in India will only be possible if OECD countries and companies that are headquartered in OECD countries have robust and aggressive partnerships with India and Indian companies to ensure there are a diversity of solutions to drive down the cost of green iron and steelmaking in India. That means partnerships of all types: trade partnerships that give India a pathway to produce low/zero emissions value added steel products; technology partnerships like the US DOE’s Net Zero World and Clean Energy Ministerial (CEM); and demand side partnerships like Industrial Deep Decarbonisation Initiative (IDDI) and SteelZero India. But all those efforts will have to levelize costs in time.
India will also need competitive and reliable options for green iron ore, and ideally this would come from a diverse set of trade partners from South America to South Africa to Australia.
India and China are capable of producing zero emissions steel at scale but it is still up to the OECD countries to walk the walk, drive down costs, and create the right market and political conditions to incentivize the larger producers in the right direction.
Carbon Capture Use and Storage
Question: You mentioned Korea and Japan having limited CCUS capacity, but if we are being honest, CCUS for coal based blast furnace production is nowhere near the technical readiness needed to use as a viable solution (your own 90% threshold for capture rates) in even the mid-term right now. Do you feel less confident about CCUS ‘role in coal based steelmaking than you did in 2021 when you researched and wrote the Net Zero Steel Project report?
Chris: I suppose I would say I am in the same or a very similar place but for different reasons today. I’ll explain. I can see CCUS working for example in cement much faster. But for blast furnace production, CCUS is really difficult. That is why it has not advanced as we thought it might five years ago. I still think its important to continue significant R&D and see if we can get a CCUS solution set that could achieve the 90% capture rates we set out in our report in 2021, but I don’t think OECD countries will at all be the places those solutions are eventually deployed. It really comes down to India in particular and creating those incentives we just talked about for them to have the right conditions to not feel the need to use as much coal in steelmaking overall. We are seeing companies like Arcelor-Nippon India JV build new coal based blast furnaces and at the same time invest in DRI and renewables in the OECD. They seem to be hedging their bets. But if they had to tell their investors right now, do they have a credible path to mitigate those new blast furnaces, the truth would be no, they don’t.
Question: What is one industry promoted talking point that you think presents false solutions or misdirection that you want to call out?
Chris: Easy question: that CCUS for blast furnaces is easy somehow. That you can just magically put a cap on the emissions, pipe them somewhere and bury it all in the ground very neatly when the time comes its absolutely necessary. That’s nuts. We need emissions reductions, big ones, now – CCUS for blast furnaces as we have discussed is very far from being the viable solution the industry talks about it as. The other things you see are arguments for carbon offsets or carbon direct removal. These don’t do anything about the net emissions reductions needed right now and are a distraction.
Message to company CEOs
Question: If you were speaking in front of a group of steel company CEOs (picture Aditya & Lakshmi Mittal, Lourenco Goncalves of Cleveland Cliffs, Shinji Minobe of Nippon Steel) what would you tell them to focus on in the next 12 months if there are serious about their climate responsibilities and getting the sector on track for 1.5C by 2030?
Chris: This has to be the year that companies finally come up with specific, credible net zero transition plans for all of the assets that the company owns. We’re talking about every blast furnace, every EAF, every mine.
It’s ok if they don’t know all the answers, but they need to be totally transparent about timelines, current emissions, and calculating how fast they need to reduce emissions to ensure a livable planet and protect the interest of their investors. Those two things do not need to be in conflict. A facility-by-facility plan with transparency around current emissions impacts and reduction targets for the next 3-7 years for each and desired technology transition for each is more than feasible for these big companies. A credible plan should include everything from investment prospectus to engineering studies, to how they plan to leverage current public policies like the Inflation Reduction Act (IRA) in the US or similar industrial policies at play or under discussion in other countries.