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Report: Green steel investment blitz could 'revolutionise' Northern England's economy

Report: Green steel investment blitz could 'revolutionise' Northern England's economy

Green steel 'stimulus for the north’ could revitalise the industry and establish UK as a global leader in green steel technologies, according to IPPR North

Northern regions of England have a "unique opportunity" to become a low carbon steel production powerhouse, which would unlock local jobs, wealth and business opportunities in the wake of the pandemic while steering the UK closer to its climate goals, according to IPPR North.

In a fresh report released today, the progressive think tank argues the development of a low carbon steel industry in the North could "revolutionise" the local economy by preserving thousands of jobs, helping the UK deliver a net zero steel industry by 2036, and unlocking £3.8bn of market opportunities annually nationwide by the end of this decade.

It argues decades of deindustrialisation and neglect have reduced morale of the UK's steel sector which has led to a widespread perception it is a sunset industry, but adds that the net zero transition provides a major opportunity to transform the sector's fortunes.

England's North is home to a significant number of the UK's steel producers, as well as one-third of the industry's workforce, and as such it can be at the heart of the UK's effort to decarbonise its hugely energy-intensive steel sector, the report contends.

With the right investment from government and industry in jobs and a range of innovative low-carbon technologies, it claims - such as hydrogen, carbon capture and storage and electrification - the industry could "effectively" reach net zero by as soon as 2036.

Jonathan Webb, report author and senior research fellow at IPPR North, urged government, northern leaders, businesses and trade unions to work together to kickstart the sector's transformation.

"We must act fast to seize the opportunity to recast steel as an industry of the future," he said. "The time to act is now if we are to become competitive, future world leaders in green steel. So government, leaders, steel businesses, trade unions and others must collaborate without delay, commit to, and invest in a green steel stimulus for the North."

IPPR North calculates that decarbonising the UK's steel sector by 2036 would require £150m of annual government and industry investment until the 2030s, a figure that would rise to £300m annually by 2035 before dropping to £267bn by mid-century.

It estimates these investments could save roughly 12,000 jobs in the northern steel sector and a further 20,000 to 27,000 jobs in the steel supply chain across the UK.

Webb emphasised the steel industry "underpins" many towns and regions across the North. "If we are serious about powering up our regions, then we need to be serious about harnessing the incredible potential of green steel, to build the low-carbon infrastructure we need to level up for ourselves, here in the North," he said. "Everyone must play their part, and if they do, we will realise a return on that investment that will more than deliver for all". 

The steel industry is widely regarded as one of the more challenging areas of the economy to decarbonise, with the energy-intensive process for steelmaking at present heavily reliant on fossil fuels such as coal, but there is also increasing momentum and investment behind the development of alternative steelmaking fuels such as green hydrogen across Europe that could threaten to disrupt the industry in the coming years. 

As such, the government is facing growing pressure to speed up delivery of funding from its £250m Clean Steel Fund, which is aimed at supporting development of decarbonisation technologies in the UK. However, despite the Fund first being announced in 2019, no money is due to be handed out until 2023, while the embattled UK steel industry lurches from one crisis to the next.

The government has so far refused to intervene to provide funding for Liberty Steel, the UK's third-largest steelmaker, after the company was recently thrown into turmoil after the collapse of its main lender Greensill Capital. And Liberty Steel's woes come less than a year after Tata Steel, Britain's largest streel maker, was rescued from insolvency by Jingye Group after failing to secure a rescue package from the government in the wake of the pandemic.

Meanwhile, the government has committed to "examine the implications" of a recommendation from the Climate Change Committee that the UK should set targets for ore-based steelmaking to reach near-zero emissions by 2035.

Responding to IPPR's report, the Department for Business, Energy and Industrial Strategy (BEIS) emphasised the steel industry would play a "critical role" in providing the infrastructure necessary to drive a green economic recovery to the pandemic.

"We are working closely with the steel sector to support its transition to a low carbon future," BEIS said in a statement. "We have announced a £250m Clean Steel Fund to support the industry to reduce carbon emissions, and our new Industrial Decarbonisation Strategy sets out how it can decarbonise in a way that supports competitiveness, jobs and clean growth."

Global briefing: US eyes sweeping climate risk disclosure rules

Global briefing: US eyes sweeping climate risk disclosure rules

All the top green business news from around the world this week, including China coal fleet concerns, ultra-white paint and Brazil's rainforest funding demands

US prepares sweeping climate risk disclosure rules

Fresh from unveiling a flurry of major green commitments since entering the White House at the start of the year - including a major $1tr green infrastructure and jobs blitz - President Biden has also now set his sights on sweeping action to address corporate climate risk, reports this week indicate.

A draft White House order obtained by Politico suggests Biden is preparing to instruct federal agencies as well as businesses to embed climate risk assessment and disclosure into their strategies and investments, with fresh regulations reportedly set to cover every sector of the economy including banking, fossil fuels, housing and agriculture.

If adopted, the US would be following in the footsteps of a growing number of countries around the world taking regulatory action to enforce better climate risk disclosure in the private sector. Earlier this week New Zealand became the first country in the world to bring in a law forcing its financial firms to report on the effects of climate change on their business, while the UK is also set to phase in similar rules over the next two years.

The US plan to force companies and federal agencies to measure, mitigate and disclose the risks posed to their operations by climate change and the transition to a green economy, meanwhile, is reportedly being prepared ahead of the global climate summit being hosted by the US next week.

That online summit is expected to see around 40 nations attend, with major hopes high that a number of countries will be coming forward with major new climate commitments, including reports the US is tentatively gearing up to unveil a target to halve its emissions by 2030 from 1990 levels.

The summit is seen as a crucial building block for international climate diplomacy momentum this year in the run up to upcoming G20 and G7 summits, as well as the critical COP26 UN climate summit being hosted by the UK later this year, although concerns are rising as to whether the Glasgow event will be able to go ahead in person.

In the meantime, other nations reportedly gearing up for announcements at next week's summit include Japan - which is reportedly tipped to ramp up its 2030 climate target - as well as South Korea, which is expected to announce a moratorium on overseas financing for coal power.


Report: China must shut 364GW of coal by 2030 to reach net zero

China must shut, retrofit or put into reserve capacity 364GW of its existing coal power capacity - around 600 plants - before the end of the decade it is to stand a chance of meeting its target to reach net zero carbon emissions by 2060, analysis this week has claimed.

Harnessing satellite imagery and machine learning to estimate China's electricity production and emissions from coal, energy analyst firm TransitionZero said the world's biggest emitting nation would need to halve the carbon intensity of its power generation by 2030 to meet its overall net zero goal.

However, the analysis published yesterday also estimates that China could replace its vast coal power capacity with renewable electricity generation, which it said could deliver a net saving for the country of $1.6tr over the next decade, as wind and solar power are now far cheaper than coal.

China recently unveiled it hotly-anticipated 14th Five Year Plan for its economy, which leaves the door open for continued coal generation and even expansion, but TransitionZero warned that by continuing on the current path the country risked huge numbers of stranded coal assets as the global economy transitions towards cleaner forms of energy.

Moreover, it said China's recently-announced emissions trading system (ETS) - designed to drive down emissions from its electricity sector - may already be oversupplied with carbon allowances to the tune of 1.56 billion tonnes, which without reform risked the value of these credits being as low a zero.

It came as state-affiliated media site Jiemian News yesterday reported that China is aiming to build eight nuclear power units every year between 2021 and 2025, ramping up its installed atomic energy capacity to 120GW by 2030, enough to provide eight per cent of the country's power needs.

However, China's coal output also continues to rise, increasing by as much as 16 per cent during the first quarter of 2021, according to Reuters, while country faces growing pressure to curb its coal power and ramp up its climate commitments in 2021 ahead of COP26 later this year.


C40 Cities: 125 mayors worldwide pledge action in support of Paris Agreement

More than 125 mayors from 31 countries have today committed to taking the "urgent action necessary" to support global efforts to halve greenhouse gas emissions by 2030, and achieve net zero by 2050, as part of efforts led by the C40 Cities Climate Leadership Group.

As part of the pledge, cities including Bangkok in Thailand, Chuncheon-si in Korea, Miami Beach in the USA, Mumbai in India, and Rabat in Morocco have promised to deliver their fair share of decarbonisation in support of the climate goals of the Paris Agreement, according to C40 Cities.

The announcement came at a meeting between global mayors today led by Los Angeles Mayor and C40 Cities chair Eric Garcetti and UN Secretary-General António Guterres which was convened to discuss the vital role of cities in combatting the climate crisis in the wake of the coronavirus crisis.

Of those joining the commitment today, 96 city leaders pledged action through the Paris Declaration, an effort launched in December by Paris Mayor Anne Hidalgo, while the total number of cities worldwide committed to net zero through the Cities Race to Zero campaign now stands at 704.

"Cities play a critical role in delivering a healthy, resilient, zero carbon recovery" said commenting on the announcement, Nigel Topping, UK High Level Climate Champion for COP26, said cities had "a critical role in delivering a healthy, resilient, zero carbon recovery" from Covid-19.

"Increasing climate ambitions from cities and subnational governments should give countries the impetus to pursue mid and long term emissions reductions, and ultimately deliver the promise of the Paris Agreement," he said.


Brazil seeks $1bn from western nations to protect Amazon

Brazil is seeking $1bn from western nations in order to help protect and restore the Amazon rainforest, with the South American nation's government claiming the money would be used to reduce deforestation by up to 40 per cent over the next year, according to reports.

Speaking to the Financial Times earlier this week, Brazil's environment minister Ricardo Salles claimed his government had already demonstrated enough success in combatting deforestation in its Amazon regions to warrant the funding support from western nations.

It comes amid widespread evidence of deforestation in Brazil's Amazon rainforest having increased to its highest levels in more than a decade since Jair Bolsonaro was elected the country's president in 2018, while last year alone more than 11,000 square kilometres of Amazon rainforest in the nation was destroyed.

The rise in Amazon rainforest destruction in recent years, with vast areas razed to make way for agricultural and livestock production, has cause international outcry due to the region's significant capacity for storing carbon, as well as its unique and critical biodiversity.

However, given the government's record on the Amazon to date, as well as its to environmental enforcement agency budgets, Brazil's demands for $1bn financial support to tackle the problem is unlikely to secure support from the US and other western governments.


US engineers develop ultra-white paint to combat global warming

Engineers in the US claim to have developed an ultra-white paint capable of keeping surfaces cooler and reducing the need for air conditioning in hotter climates, in a move they said could help combat global warming.

Researchers at Purdue University in Indiana yesterday announced they have developed "the whitest paint yet" that "pushes limits on how white paint can be", estimating the paint is capable of reflecting up to 98.1 per cent of sunlight, helping to send infrared heat away from a surface.

Most white paint gets warmer rather than cooler, while more advanced white paints on the market designed to reflect heat still only reflect around 80-90 per cent of sunlight, and are therefore unable to make surfaces cooler than their surroundings, the researchers explained.

"If you were to use this paint to cover a roof area of about 1,000 square feet, we estimate that you could get a cooling power of 10 kilowatts. That's more powerful than the central air conditioners used by most houses," said Xiulin Ruan, a Purdue professor of mechanical engineering and one of the researchers behind the development.


COP15 delayed to October amid mounting concern for global biodiversity

The crucial COP15 UN biodiversity summit has been delayed yet again due to the Covid-19 pandemic, with the event now pushed back to mid-October in Kunming, China.

The summit is widely tipped as a critical event in the calendar for driving up ambitious commitments from governments worldwide to tackle the growing nature and biodiversity crisis, with hopes that the summit could deliver global treaty along similar lines to that of the Paris Agreement on climate change.

Proposals for an agreement include targets to conserve 30 per cent of the world's oceans and land by 2030, introduce controls on invasive species and reduce plastics pollution.

It comes amid growing concern about the state of the world's ecosystems and natural resources, with fresh academic research this week warning that just three per cent of the world's land remains ecologically intact with healthy populations of all its original animals and habitats, according to the Guardian.

The delay to COP15 means the event will now take place just a month ahead of the COP26 UN climate summit, which is scheduled to take place in Glasgow in November, although concerns remain as to whether either event will be able to take place in person as the world continues to battle the pandemic.

COP26: Nations agree to hold upcoming pre-summit talks online

COP26: Nations agree to hold upcoming pre-summit talks online

Compromise means informal talks will take place virtually next month as UK battles to ensure Glasgow summit itself takes place in person

The UK, UN and nations around the world have agreed to hold informal climate talks virtually from next month, in bid to "advance the extensive work that needs to be addressed" in preparation for the crucial COP26 summit currently scheduled to take place in Glasgow later this year.

The decision to hold three weeks of preliminary COP26 discussions online came yesterday after a meeting of the COP Bureau, the summit decision making body which comprises the United Nations, the summit co-host the UK, as well as representatives from developed and developing countries.

Preliminary Paris Agreement talks usually take place every year in advance of annual COP climate summits, and are a crucial part of the UN process, as without these detailed negotiating preparations taking place, the COP summits themselves are unable to go ahead.

However, ongoing safety concerns and restrictions surrounding Covid-19 had cast plans for pre-COP26 talks into doubt. Under huge pressure as hosts to ensure a successful outcome at the climate talks in Glasgow later in November, the UK had been pushing for the preliminary talks to go-ahead online, but concerns have been raised elsewhere that virtual talks could be a barrier to progress, potentially rendering it more challenging for developing nations' voices to be heard.

But in a win for the UK, a compromise was reached at the Bureau meeting yesterday which means preliminary discussions will indeed take place online for three weeks starting on 31 May - although the talks have not been classified as 'formal' negotiations, meaning no official decisions can be taken, marking a slight setback for the COP26 hosts.

A statement from the Bureau yesterday insisted those leading the talks were "committed to ensuring that the meeting is inclusive ands transparent" with "special attention paid to scheduling meetings to accommodate different timezones across the globe".

"The secretariat will continue to provide support to ensure the full and effective participation, in a fair and inclusive manner, of all Parties," the Bureau said in a statement. "This includes supporting logistical and connectivity needs for participants, as needed."

It added: "The UNFCCC Executive Secretary and the presiding officers will also address governments in an open letter asking that all governments, through their negotiators, support the work of the sessions to achieve as much progress as possible towards a successful COP."

In an open letter to Paris Agreement parties earlier this week, COP26 President Alok Sharma - the UK's former Business Secretary - had said he recognised there were "valid concerns about virtual work" and that steps would need to be taken to ensure inclusivity for all nations at the talks, but that "we cannot afford to put formal work on hold".

"Such an approach to formal sessions and capturing progress is, in my view, the only way we will make sufficient progress ahead of meeting in person in Glasgow to ensure COP26 delivers on its mandates and what the world expects of us," he wrote.

It comes amid growing concerns over the COP26 summit itself taking place as hoped in Glasgow later this year, with countries around the world still struggling to contain the Covid-19 virus, many travel restrictions still in place, and the rollout of vaccines patchy at best in many regions.

The UK government and many developing nations remain determined to hold the summit in-person in Glasgow, viewing this is the most effective way to deliver on global priorities and progress on key outstanding issued underpinning the Paris Agreement, such as on carbon offsetting market rules, climate finance for developing nations, and ramping up national decarbonisation commitments.

But speaking on BBC Radio Four's Today programme this morning, former UN climate diplomat Tom Rivett-Carnac - now founder of the Global Optimism NGO alongside former UNFCCC chief Christiana Figueres - said "everything I'm hearing [on COP26 talks so far] is it's going pretty well".

"Alok Sharma is well liked and trusted, he's got a good team, and I think there is every chance they can deliver some significant progress in Glasgow, particularly with the US alongside them as they were with the French for Paris," Rivett-Carnac said.

But he added that, in order to help boost its credibility on a world stage, strong arm other nations to take action, and improve chances of leading a successful outcome at COP26, the UK would be wise to ramp up its domestic commitments. That would include, he said, accepting the Climate Change Committee's recommendation to set a target to cut UK emissions by 78 per cent by 2035 from 1990 levels, and to reverse its recent decision to cut international aid as a proportion of GDP from 0.7 per cent to 0.5 per cent.

"Those two things in my view would give the government a lot more credibility," Rivett-Carnac told the programme.

Meanwhile, a major climate summit featuring 40 nations is set to take place online next week hosted by the US, marking the first major international climate intervention from President Biden since he took office at the start of the year. The White House is strongly tipped to announce a more ambitions decarbonisation target for 2030 - potentially a 50 per cent cut in emissions from 1990 levels - while several other nations may well step up their efforts at the summit, which could play a significant role in building momentum on the road to COP26 later this year.

UK subsidy-free solar market shines as intallations surpass 1GW

UK subsidy-free solar market shines as intallations surpass 1GW

A further 1GW of subsidy-free solar could also be added this year as decarbonisation of buildings and energy gathers pace, Solar Energy UK claims

Just two years after the closure of a key government support scheme for small scale renewables, the UK has now isntalled 1GW of subsidy-free solar, and the sector's outlook looks bright for the rest of the year as the decarbonisation of buildings and energy gathers pace, according to Solar Energy UK.

The trade association, alongside analyst Solar Media Group, said "market confidence in solar remains clear" even despite successive coronavirus lockdowns posing challenges for overall deployment over the past year.

Statistics jointly published by the two groups yesterday reveal 1.3GW of solar projects have been installed across the UK since the closure of the government's feed-in-tariff (FiT) subsidy scheme for small-scale renewables two years ago, with 175MW of solar deployed in the first three months of this year, which they touted as evidence of a robust domestic solar market. 

The UK could well be on track to deliver a record 1GW of solar capacity in 2021 as various government clean energy policies and building decarbonisation schemes are rolled out, including the Public Sector Decarbonisation Scheme geared at schools and hospitals and the introduction of stricter energy efficiency regulations for new homes, they added.

Roughly 160MW of solar could be installed on public sector buildings alone in 2021 through the Public Sector Decarbonisation Scheme, which has already committed nearly £140m of funding for solar projects, they said.

Finlay Colville, head of research at Solar Media Ltd, said the "strong deployment figures" from the first quarter of 2021 proved the UK solar industry was now operating "efficiently and profitably" in a zero-subsidy environment.

"2021 could still be the most significant year for solar in the UK, if the industry succeeds in deploying above 1GW of new PV installations, fully absent of any government incentive schemes," he said.

Overall, the UK now boasts 14GW of capacity, according to the data, which shows all three solar market segments - residential, commercial rooftop and ground-mount installations - saw year-on-year growth, despite a dip in installations during the first lockdown last year.

Solar Energy UK chief executive Chris Hewett said the UK solar industry was going from "strength to strength", pointing to solar's role in driving record levels of clean energy generation in the UK over the recent Easter weekend.

"Great Britain had its cleanest ever grid electricity over the Easter Weekend, with solar providing 21 per cent of generation at one point," he said. "The growing pipeline of subsidy-free projects reflects the confidence investors have in solar technology, and the UK can look forward to solar delivering an increasing amount of clean, affordable power."

JP Morgan and Citi pledge multi-trillion dollar green finance blitzes

JP Morgan and Citi pledge multi-trillion dollar green finance blitzes

Investment banks bolster their climate finance commitments for coming decade in latest wave of Wall Street net zero financing targets

US investment banks JP Morgan Chase and Citi have significantly ramped up their climate finance commitments, yesterday unveiling plans that would amount to several trillion dollars in sustainable and low carbon investment in the coming decade.

In separate announcements yesterday, Citi has committed to delivering $1tr in sustainable finance by 2030, of which half will go to climate solutions, while JP Morgan Chase said it facilitate and finance $1tr in green initiatives by the end of the decade as part of a major $2.5tr sustainable finance target. The two banks, which are among the world's largest funders of fossil fuels, both cited the need to use their significant influence to tackle climate change.

In a blog post on Thursday morning, Citi's head of global public affairs Ed Skyler confirmed the bank would support a wide array of climate solutions, including renewable energy, green buildings, sustainable agriculture, and clean technologies, aimed at accelerating the transition to a sustainable and low-carbon economy.

The bank's existing target to deliver $250bn of environmental finance by 2025 has been ramped up to unlocking $500bn by the end of the decade, it said.

"Given our global footprint and our role in supporting economic activity around the world, Citi has a role to play in achieving the [UN] Sustainable Development Goals - and in this moment as we look towards emerging and rebuilding from the Covid-19 pandemic, it's more crucial than ever that we address these priorities together," Skyler wrote.

It comes just weeks after Citi announced it is targeting net zero operations by 2030 as well as net zero financed emissions by mid-century, amid a wave of climate promises that have swept US investment banks in recent months.

JP Morgan, meanwhile, yesterday committed to unlocking $1tr of investment for initiatives that accelerate the deployment clean energy and facilitate the transition to a low-carbon economy by the end of 2030, as part of a broader $2.5tr investment programme dedicated to sustainable development.

JP Morgan CEO and chairman Jamie Simon said the bank was "committed to doing its part" in delivering a low-carbon economy. "Climate change and inequality are two of the critical issues of our time, and these new efforts will help create sustainable economic development that leads to a greener planet and critical investments in underserved communities," he said. "Business, government and policy leaders must work together to support long-term solutions that advance economic inclusion, bolster sustainable development and further the transition to a low-carbon economy."

The bank, which is the largest in the US by assets, said it would help its clients "navigate the challenges and long-term benefits" of the low carbon transition through sustainability-focused, research and advisory services and a dedicated 'green economy' team that specialises on clean energy, efficiency technologies, sustainable finance and agriculture and food technology.

It follows the JP Morgan's commitment last year to align its financing activities with the goals of the Paris Agreement.

The latest announcements from JP Morgan and Citi come less than a week after Wall Street rival Bank of America similarly committed to providing $1tr in "low carbon investment" by the end of the decade, as part of its own recently-announced goal of delivering net zero emissions across its financing activity, operations and supply chain by mid-century.

Yet such commitments from major US investment banks are unlikely to quell scepticism from green campaigners, as many of these financial giants continue to plough significant sums of investment into fossil fuel industries. Statistics published last month by the Rainforest Action Network revealed Citi and JP Morgan Chase are the banking sector's most prolific fossil fuel funders, having providing $237.5bn and $316.7 bn respectively into fossil fuel firms in the five years since the Paris Agreement. Green groups have therefore argued long-term climate targets and finance commitments must also be backed by action in the short term to divest from fossil fuel companies. 

Green steel: Three leading innovations worldwide

Green steel: Three leading innovations worldwide

Start-ups and legacy companies across the globe are starting to decarbonise one of the most difficult and significant industries - here are three leading examples

Thomas Koch Blank, head of breakthrough technologies at RMI, says the green steel industry is at the beginning of an S-curve. Almost two billion tonnes of steel are produced each year, and half of that is virgin material. Producing steel is responsible for about seven to nine per cent of total global carbon emissions. So, it's easy to understand why there's a lot of investment pouring into creating sustainable steel technologies. 

According to Blank, the production of green steel is ramping up slowly compared to the number of resources coming in, aka the bottom of the 'S'. 

Still, there has been a wave of recent developments. A Bill Gates-backed startup, Boston Metal, working to create a CO2-free steel process, raised $50m in funding in January. In Sweden, $3.99bn will help build a new commercial hydrogen steel plant. Swedish miner LKAB is investing $46bn to achieve net zero carbon emissions by 2045. But there's still a long way to go before legacy steel manufacturers across the globe can decarbonise entirely, according to Blank.  

"When the Chinese steel industry starts moving, that's when you get out of the fringes in my mind," he said. "They haven't made any specific or any real investments yet."

Who's making moves towards a greener steel economy? Here are three companies and approaches that hopefully will get us to the S-curve's inflection point. 

1. Kobe's increased blast furnace efficiency 

Japanese steel manufacturer Kobe Steel recently developed a new technique for creating steel in natural gas blast furnaces that use less coke, a raw material with a high carbon content used in steel production. By adding hot briquetted iron (iron ore with the oxygen removed) to the blast furnaces as a fuel source at a precise ratio, Kobe said it has perfected a way to maintain the efficiency of the CO2 reduction process and use less coke as fuel. 

"It's an optimisation of the distribution of substances that go into the blast furnace," said Masahiro Motoyuki, executive officer of Kobe Steel.

According to Kobe, the process reduces CO2 emissions associated with production by about 20 per cent. While this is not a final solution to the steel industry's carbon emission woes, Kobe is positioning this as a transitional technology to help reduce emissions while it develops more drastic changes. But Blank sees this as a risky and expensive investment in something that might be obsolete in a few years if the steel industry is trying to get to net zero emissions by 2050. 

"If you need to gradually get to zero emissions over 30 years, cutting your emissions by 20 per cent buys 20 per cent of the 30 years, so that gives you six years," he said. "That technology is only relevant for six years. They need more effective technologies installed very soon; otherwise, they're not on track. But they're actually reducing their carbon footprint, which is to their credit a lot more than most of the steel industry." 

It seems Kobe knows it has a timeline issue and is investing in other production technologies such as hydrogen in parallel with the efficient blast furnaces. Its US subsidiary, Midrex Technologies, is working on natural gas blast furnaces that also can use hydrogen for a completely carbon-free process once there is enough hydrogen available for commercial steel use. 

2. EIT InnoEnergy's hydrogen steel plant

Hydrogen offers one possibility of a completely carbon dioxide-free process for making steel, according to some experts. In traditional blast furnaces, coal is used to strip the oxygen out of the iron ore, creating steel and CO2. According to the Fuel Cell & Hydrogen Energy Association, by using hydrogen instead of coal for that process, the by-product is water (H2O) instead of CO2. 

A partnership between Netherlands-based EIT InnoEnergy, a sustainable innovations accelerator funded by the European Union, investor Vargas Holdings and Scania, a Swedish truck manufacturer, is working to bring this dream to a commercial reality. These partners are developing a fully scaled commercial hydrogen steel plant called H2 Green Steel. The plant will produce five million metric tonnes of green steel by 2024, making it the largest green steel plant in the world, according to the partners.  

Jacob Ruiter, CE0 Benelux at EIT InnoEnergy, said having a joint partnership and a buyer for the steel already on board before the venture started building the plant allowed it to avoid obstacles that previously have stifled the development of hydrogen steel plants. 

"In order for this to work, [steel manufacturers] have to change their mindset," he said. "Think in terms of value chain. So it's not about the price of the hydrogen or the steel. It's the price of the end product like the car. Will there be an increase in the price of the end product? What is the end customer willing to pay?"

InnoEnergy said it found using steel made sustainably only increased the price of a car by about $36, a negligible amount for the consumer. Instead of steel buyers such as car companies looking for the lowest steel prices and steel manufacturers competing to get their steel to the lowest possible price to win the market, it encouraged these stakeholders to join forces to create a green steel that is also affordable.

According to Blank, the biggest obstacle to hydrogen steel production is the vast amounts of renewable energy needed to keep the process carbon-free. 

"If you want to take the current primary steel production and electrify it, you'll need a terawatt of electrolyzers, which is a lot," he said. 

Basically, the three planned green steel plants in Sweden would need 50 per cent of the current  power supply. According to Blank, globally, we will need closer to one terrawatt of electrolysers powered by three terrawats of renewables. Three terrawatts is about three times the total solar and wind power currently installed.

Blank also pointed to an anticipated explosion in electricity demand, spurred by world population growth over the next 30 years, as another challenge to overcome.

The H2 Green Steel plant will be built in Sweden's Norrbotten region, which has access to vast amounts of reliable hydro and wind power. Blank said if hydrogen-based steel production is to expand beyond Sweden to other large steel manufacturing countries such as China and the United States, significant investment will need to occur in renewable energy. 

3. Boston Metal's molten oxide electrolysis

A new technology originally created at MIT, molten oxide electrolysis, aims to separate the oxygen from the iron ore using electricity and creating O2 as the byproduct instead of CO2. Boston Metal is tasked with bringing this technology to a commercial level for the steel industry. 

Over the next two to three years, the company hopes to take its laboratory success and bring it to market. It's focusing on regions such as Europe, Canada and Australia where there is easy access to renewable energy because like hydrogen steel, the electrolysis process requires access to large amounts of clean power to keep the process carbon-free all the way down the pipeline. 

Adam Rauwerdink, vice president of business development at Boston Metal, thinks electrolysis has one notable advantage over hydrogen - it is a direct way of removing iron ore in fewer steps.

"If you're going to do hydrogen for steel production, you're ultimately focused on [using] green hydrogen," he said. "Which is using electricity to do electrolysis of water to produce hydrogen. So there's electrolysis involved. You're just adding extra steps because then you're taking that hydrogen, using that to make a sponge iron and then remelting that to a similar product that we're producing. We think we are simplifying the process."

Each company and technology is taking aim at the one billion tonnes of virgin steel produced each year for buildings, factories, cars, planes and other infrastructure projects. And there isn't one solution to rule them all, according to Blank. It will take many innovations and pathways to decarbonise this extremely carbon heavy industry. 

"I think there will be room in the market for all of them," Blank said. "It will take 1,000 million tonnes to transform the whole industry. You just need a lot of technology and a lot of new assets."

This article originally appeared at GreenBiz.

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