Avenues for Decarbonizing the Steel Industry

Energy- and carbon-intensive, steel production is categorized as one of the most “hard-to-abate” industries, making the scaleup of decarbonization technologies crucial not only for steelmakers themselves, but for every downstream industry in the supply chain

Responsible for some 9% of global CO₂ emissions, the steel industry is one of the most carbon-intensive of the so-called “hard-to-abate” sectors. But this also means that decarbonization efforts, such as electrification, carbon capture, waste recovery and the use of green hydrogen, can be truly transformative on a supply-chain-wide scale. “What sets the steel industry apart from other sectors when it comes to decarbonization potential is the scale of its carbon footprint and its foundational role in the global economy. Because steel is so deeply embedded in almost every supply chain — automotive, construction, infrastructure, transportation and energy — decarbonizing steel yields cascading emissions reductions across multiple major sectors,” says David Wilhelm, CEO of HGR Energy, the international subsidiary of Hecate Energy (Chicago, Ill.; www.hecateenergy.com). HGR Energy recently entered into a partnership with Algerian national oil company Sonatrach (Algiers; www.sontrach.com) and steelmaker Tosyali Iron Steel Industry Algeria to jointly study green hydrogen production for Algeria’s steel industry in what Wilhelm calls “the flagship green steel project for the nation.” The Tosyali plant in Oran is the largest operating steel plant in Africa, producing more than 6 million tons of crude steel annually, so the decarbonization benefits in the sector are sizable, especially with region-wide expansion on the horizon.

 

Renewable power sources

Among the key technologies driving decarbonization in the steel sector are hydrogen and electrification. ABB, Inc. (Zurich, Switzerland; www.abb.com) has worked extensively on various steel-decarbonization projects across the globe, providing a wide range of equipment and services, from high-power rectifiers used in the production of green hydrogen with electrolyzers to electromagnetic stirring (EMS) for electric arc furnaces (EAFs) to cleaner power sources for direct-reduced iron (DRI), as well as control systems, instrumentation, motors and transformers that enable more efficient power management.

“There is no feasible projected future where the steelmaking industry and hydrogen do not go hand in hand. Steel stands as a powerful proving ground for the energy transition. Hydrogen has and will continue to replace traditional coking coal in blast furnaces through DRI, producing iron sponge pellets that can then be used in all types of furnaces, including EAFs. Overall, this is a process that is much less energy-intensive and with less harmful byproducts or gases,” says Frederik Esterhuizen, global business line manager for Metals at ABB Process Industries. ABB is working closely on several hydrogen projects aimed at decarbonizing heavy industry, including the Hydrogen Breakthrough Ironmaking Technology (HYBRIT) project (Figure 1), piloted in Sweden by steelmaker SSAB, state-owned iron ore miner LKAB and state-owned energy company Vattenfall. “HYBRIT aims to make steel using green hydrogen and fossil-free electricity using the high-grade iron ore from the LKAB mines instead of coking coals. Here, we are supplying a full electrification and automation package for the pilot plant, which is set to start production in 2026,” says Esterhuizen. HYBRIT’s latest breakthrough was the successful completion of a pilot project demonstrating the feasibility of long-term, onsite hydrogen storage in a steel-lined rock cavern (Figure 2) adjacent to the sponge-iron production unit in Luleå, Sweden. According to the HYBRIT team, onsite hydrogen storage at the industrial scale can reduce the variable operating costs of hydrogen production by up to 40%.

Also in Sweden, GreenIron H2 AB selected ABB to provide automation and control systems solutions for a first-of-its-kind commercial facility in Sandviken, which will industrialize GreenIron’s hydrogen-based reduction technology for producing fossil-free sponge iron that can then be used in steel or other metal-fabrication processes. Earlier this year, global mining giant Vale S.A. (Rio de Janeiro, Brazil) signed a memorandum of understanding under which Vale will supply iron ore for GreenIron’s commercial site in Sandviken, which is currently being commissioned and prepared for scaleup. According to GreenIron, a furnace using their technology eliminates 56,000 tons of CO₂ emissions per year.

In the U.K., ABB has been working on several projects with Tata Steel Ltd. (Mumbai, India; www.tatasteel.com) related to automation and electrification. “We recently won multiple orders with Tata Steel, one as part of a consortium with steel equipment supplier Clecim, where automation, electrification and digital technology will be key to achieving safe, efficient and optimized operations for a new pickle line at Port Talbot steelworks. In another project, we’re supporting Tata Steel’s decarbonization efforts through a comprehensive electrical-power-distribution scope combined with delivery of EAF EMS technology in partnership with Tenova. Tata Steel plans to start up the 3.2-million-ton/yr EAF and produce its first steel in 2028,” says Esterhuizen.

“EAFs require a substantial, stable electricity supply and this demands robust grid infrastructure. Through energy-efficient motors, process optimization software and electromagnetic stirring solutions, we can enhance EAF efficiency and reduce energy consumption, easing that pressure on the system. Our energy-management systems help stabilize operations in regions with grid reliability concerns, ensuring uninterrupted EAF performance,” says Esterhuizen. For example, at a steel site in Europe, the company deployed its energy management solutions to cover steam yield, byproduct gases, energy purchase and production, including site plants and turbines. “This project resulted in 10% less flaring of gases, 15% improvement in accuracy of electricity-purchasing forecasts and an average savings of €15,000 per month,” notes Esterhuizen.

In another example, ABB provided its Ability Smart Melt Shop platform to JSW Steel’s Dolvi Works in India. “This has boosted productivity by up to 24,000 tons annually at the site and cut energy costs by around $250,000. This intelligent system optimizes crane and ladle tracking, leading to faster casting speeds and reduced arcing in the ladle furnace,” says Esterhuizen.

Looking ahead, modularity and advanced energy management — in many cases, supported by artificial intelligence — will be key in implementing decarbonization across the steel industry at all scales. “The next chapter will be defined by scalable, modular solutions and smarter integration. A standardized approach that can be scaled and replicated across multiple sites significantly reduces engineering time and accelerates the deployment of new facilities. This means that heavy-asset industries can decarbonize quicker, while the rapidly growing demand for new energy like green hydrogen can be met,” says Scott McKay, Hub Americas manager at ABB’s Energy Industries division.

In North America, ABB has forged partnerships with Canadian firm Charbone Hydrogen Corp. to scale modular green-hydrogen production for heavy-industry use, including in steel manufacturing processes currently using fossil-derived “gray” hydrogen. A flagship demonstration plant near Montreal is being connected to the Hydro-Québec electric grid to produce hydrogen from electrolyzers using hydroelectricity, and the partners have now set their sights on a second facility to be located near Detroit. ABB is also collaborating with Topsoe and Fluor to develop a standardized model for large-scale factories producing solid-oxide fuel cells, starting with a site in Virginia. “This step will dramatically accelerate the deployment of electrolyzers,” emphasizes McKay.

While net-zero emissions remains many organizations’ ultimate goal, incremental and scalable solutions can go a long way in making a consequential decarbonization impact. “The greenest unit of electricity is the one that isn’t used. Even modest efficiency gains — 5% here, 10% there — can have enormous impact when applied across large-scale steel operations. We often say that we need to prioritize progress over perfection. The technologies are here, the partnerships are forming, and the challenge now is to apply what we’re developing with pace and purpose,” notes McKay.

 

Electrified smelting and more

Because of the steel sector’s scale and emissions impact, electrification of steelmaking processes like smelting can provide significant decarbonization benefits by eliminating fossil fuels used for heating.

Project NeoSmelt is an Australian initiative running through August 2026 to demonstrate the feasibility of the direct reduced iron–electric smelting furnace (DRI-ESF) route for low-carbon steelmaking using low-grade iron ore. Hatch Ltd. (Mississauga, Ont., Canada; www.hatch.com) is providing the key technology for the project, Continuous Reduced Iron & Steelmaking Process (CRISP+; Figure 3). “The essence of CRISP+ is the innovative use of a large, stationary electric furnace for the continuous melting of DRI, scrap and other iron-bearing materials for conversion to liquid iron to be used for steelmaking,” explains Paul Towsey, Hatch’s Global Director for Iron and Steel. While similar furnaces have been employed in many ironmaking applications, they have not seen widespread use in the steel industry, which has historically relied on coal-fired blast furnaces, and more recently, EAFs. A major advantage of the ESF process over traditional EAFs is the ability to effectively process lower-grade ores, such as those found in Australia’s Pilbara region, and which are the main feedstock for Project NeoSmelt. “EAFs generate large and increasing amounts of waste slag with lower-grade ores, which causes yield loss (wasted iron), and reduced plant throughput. The ESF technology is designed to efficiently turn lower-grade iron ore into liquid iron used for steel making, while drastically cutting carbon emissions by up to 90%. The process also creates a different slag byproduct that can be used as a cement replacement. The process therefore enables both cleaner steel and cleaner cement production simultaneously,” says Towsey. Typically, such low-grade ores require processing in a high-temperature blast furnace. Both EAFs and ESFs achieve decarbonization gains through electrification, but he points out that unlike EAFs, ESFs can draw power more steadily, which makes them better suited for power grids, particular when the grids are accessing large amounts of renewable power.

Closing the carbon loop

There are many efforts underway across hard-to-abate industries to deploy carbon-capture, utilization and sequestration (CCUS) schemes to reduce CO₂ emissions. These technologies are at varying levels of techno-economic maturity, but one thing is clear — technologies that can “close the loop” for carbon are advantageous.

Perocycle Ltd. (Cambridge, U.K.; www.perocycle.com), a spin-out company from the University of Birmingham (www.birmingham.ac.uk), which has received sponsorship from major iron-ore supplier Anglo American plc (London; www.angloamerican.com) and venture-build support from Cambridge Future Tech (www.camfuturetech.com), is commercializing a closed-loop CO₂-conversion process for steelmaking blast furnaces and other industrial processes. The process employs a novel double-perovskite material made of barium, calcium, niobium and iron oxide (BCNF) that boasts a 100% selectivity for CO production, meaning that all CO₂ is converted to CO via a thermochemical reaction with the BCNF material. “Under normal conditions, the perovskite contains a high concentration of oxygen vacancies, so when the BCNF is brought into contact with waste gas with a high CO₂ concentration, one oxygen atom combines with the oxygen vacancy, annihilating it and converting the CO₂ into CO. The reaction was tested in a number of perovskite-based crystal structures, and the current form of BCNF showed the highest CO yield,” explains Maxim Vreeswijk, venture lead at Perocycle. To support integration with continuous steelmaking processes, the process is designed with two reaction modules in parallel, where one is constantly removing and converting CO₂ while the other is having its oxygen-vacancy spaces regenerated with nitrogen gas. Intermittently switching between modes ensures continuous gas processing.

“The technology is designed to be retrofittable into the existing gas infrastructure of integrated steel mills. Many steel plants already treat and utilize their waste gases, including the CO₂-rich off-gases from blast furnaces. PeroCycle’s process can be applied downstream of this treatment, converting waste CO₂ into CO, which can then be recycled into the blast furnace itself as a reducing agent. This reduces the need for additional carbon-based inputs like pulverized coal and coke, lowering the overall emissions of the steelmaking process without requiring a complete overhaul of the plant,” says Vreeswijk.

The team has successfully demonstrated the conversion reaction via a prototype of the University of Birmingham containing 10 kg of BCNF. “This scale could convert about 500 kg of CO₂ if run continuously for one year. Over the coming seven months, we are developing a pre-pilot reactor that will convert at least 5 tons of CO₂ per year. This is the stepping stone to our 1,000-ton/yr pilot-scale unit that we will begin working on thereafter,” adds Vreeswijk.

Most approaches for low-carbon steelmaking require either hydrogen-based reduction (which necessitates new infrastructure) or carbon-capture and storage (which does not economically utilize CO₂). “PeroCycle takes a different route: it keeps the core steelmaking process intact while turning CO₂ into a useful feedstock — CO — which can be fed back into the process. This creates a circular carbon loop and lowers the need for virgin fossil fuels,” mentions Vreeswijk.

Perocycle recently achieved a milestone in scaling up its perovskite process — a partnership between the Birmingham-based research team and leading niobium manufacturer CBMM (Minas Gerais, Brazil; www.cbmm.com) to help improve process efficiency and develop a more cost-effective supply chain for the niobium compound used in the perovskite.

 

Upcycling steel scrap

Waste handling is a cornerstone of improving steelmaking sustainability. Waste streams resulting from metal processing include metal scraps, sludges and swarf (chips or shavings), and there are currently few options for onsite disposal or recycling of these materials. A new modular heating technology developed by Sun Metalon, Inc. (Chicago, Ill.; www.sunmetalon.com) enables electrified, onsite upcycling of metal chips and sludge into pure metal coins (Figure 4). The company’s first commercial unit, the Venus L6 (Figure 5), includes six electromagnetic furnaces and can facilitate recycling of around 500 tons/yr of steel. Sun Metalon’s smaller “beta” machines have been deployed at a handful of customer sites in Japan and the U.S., and the company is currently working to convert these sites to the larger 500 ton/yr units. The ability to upcycle scrap onsite provides benefits compared to traditional recycling methods that require waste to be transported to large centralized sites.

“Electromagnetic heating experiences some limitations at lower temperatures in terms of efficiency, but we have invented special booster materials that are inside the furnace to accelerate electromagnetic heating and overcome these challenges,” says Kazuhiko Nishioka, CEO and co-founder of Sun Metalon.

Since the technology is modular, it can be placed just downstream of the machining or grinding units, meaning that the only inputs to the furnace are metal chips and cutting fluids, which minimizes the presence of contaminants. “The machine receives metal chips and outputs pure metal coins or briquettes with roughly 60% to 80% density and without any impurities. Our heating process removes 100% of cutting fluids, leaving pure metal briquettes that are much higher-value scrap,” explains Nishioka. Fully removing cutting fluids onsite also provides safety benefits, since the hydrogen content and oil residues can present explosion or fire risks. And securing access to a reliable supply of high-value scrap is increasingly important for manufacturers as the industry shifts away from blast furnaces to EAFs, which can use scrap as their input. “It is challenging for steel mills to secure a sufficient supply of high-quality metal scrap for their EAFs, so technologies that enable scrap upgrading are highly attractive to the industry,” notes Nishioka.

For some customers, such as conglomerate Komatsu Ltd. (Tokyo; www.komatsu.com), Sun Metalon is upgrading waste for which there is no other option but offsite disposal. Komatsu has installed Sun Metalon’s technology at a site producing cast-iron sealing rings to evaluate its treatment of difficult-to-recycle sludge. “In this case, we are generating new metal scrap from literal garbage,” says Nishioka.

Sun Metalon has also forged a partnership with one of the world’s largest automotive OEMS to advance its recycling technology for aluminum recycling. “Our technology is metal-agnostic, but our focus now is steel, with projects in cast iron, cast steel, stainless steel and nickel-based super alloys, and aluminum. In principle, the system can process virtually any metal,” adds Nishioka

The next steps will be twofold — expanding the deployment of the current Venus L6 systems to a broader customer base to accelerate circularity; and delivering a next-generation continuous process unit for customers requiring significantly higher processing capacity. “The current process is semi-batch, meaning that a robot is responsible for inserting wet coins to the furnace, and then after heating, the robot extracts the heated coins. In the next generation, there is a conveyor system that brings the metal input to our continuous furnace. This will increase throughput,” says Nishioka. ■

Mary Page Bailey