New way - Green steel

The steel industry accounts for 30% of industrial emissions in Germany alone. Currently, three options for decarbonizing steel are being pursued:

1. Carbon Direct Avoidance (CDA): 
   Avoidance of CO2 among other things by the production of directly reduced iron from iron ore and there above all with the reduction gas hydrogen
    
2. Carbon Capture and Utilization (CCU):
   Utilization of CO2 through conversion into fuels and feedstock for chemical products
    
3. Carbon Capture and Storage (CCS):
   Capture and storage of CO2 emissions

Opportunity: The steel industry can make a significant contribution to climate neutrality. If sufficient green electricity is available, steel could be made CO2 neutral by direct reduction with hydrogen.

The new DRI route (directly reduced iron) uses green hydrogen to reduce iron ore pellets in the reactor. The iron sponge obtained is melted into crude steel together with recycled scrap in the electric arc furnace. The cast slabs are then rolled out in the hot rolling mill and, if necessary, further refined and the surfaces coated. This route produces around 0.15 tons of CO2 per ton of crude steel. This is less than one tenth of the emissions in the blast furnace.

How far has this route been developed?

Replacing the blast furnaces and oxygen blast furnaces (BF-BOFs) of a traditional integrated steelmaker with production based on direct-reduced iron and electric arc furnaces (DRI-EAFs) is a mature technology option. DRI production facilities consume high-grade iron ore pellets and are fueled by natural gas (NG). However, over time, they will likely also use green hydrogen (H2). This technology improvement could significantly reduce emissions by 33%-55% compared to BF-BOF production when Scope 1, Scope 2, and upstream Scope 3 emissions are considered. There is already over 100 million tons of DRI-EAF natural gas-based production capacity in operation worldwide. From this, confidence can be derived that this technology route will essentially shape the future.