Steel is essential for the functioning of our society and economy. It is the world’s largest materials industry, generating an annual turnover of 1 trillion US dollars. Economies need differing amounts of steel at different stages of their development and business cycles. Most primary steel demand will come from the construction of new transport, energy, and urban infrastructure, including buildings. Economies that have already produced generations of infrastructure stock and vehicles can recycle worn-out stock. For example, Europe and North America have in-use steel stocks of 10 to 14 tons per capita and China has 5.5 ton per capita. By contrast, South Africa has approximately 2 ton per capita, while the rest of Africa has less than 1 ton per capita.
Vast amounts of new infrastructure (e.g. sanitation, water supply, buildings, energy production and transmission, transport systems, machinery, etc.) are necessary to meet basic needs and to meet the UN Sustainable Development Goals (SDGs) in developing countries. Africa will need some 3 to 5 ton of steel per capita for basic infrastructure and other economic activities. As this demand cannot be satisfied from recycled local steel, huge amounts of primary iron will be required.
A recent paper on the subject has been published. Titled ‘How green primary iron production in South Africa could help global decarbonisation’, the paper has been co-authored by Hilton Trollip, Bryce Mccall and Chris Bataille.
This paper focusses on the potential role that South African green primary iron (GPI), manufactured from feedstocks of indigenous iron ore and hydrogen produced using very low cost solar electricity, can play in global decarbonisation while contributing to the domestic economy. The EU, for which concrete decarbonisation plans have been announced, would be the initial market. Ultimately, South Africa could become a supplier for the growing global net-zero emissions steel market, including the regional African market as this develops.
Primary steel is made from iron ore in a two-step chemical process. In the first step, which is the focus of this paper, oxygen is extracted from the iron oxide (Fe2O3) in iron ore to produce primary iron (Fe). Traditionally, carbon (C), in the form of coking coal has been used in this step, joining with the oxygen (the O3) in a blast furnace producing the desired Fe and carbon dioxide (CO2) waste gas. Heat is supplied by coal combustion which also yields CO2. However, new processes are now being developed with zero CO2 emissions. Hydrogen (H2) produced using electricity is used instead of carbon to join to the oxygen in the FeO3 in a shaft furnace, yielding only Fe and water (H2O) as products. Heat is supplied by electricity.
In the second step of primary steelmaking, various types of primary steels (carbon, alloy, stainless, tool steel) are then produced from the iron by removing or adding carbon and other elements. GPI can be made into primary steel with very low embodied emissions in a low-emissions electricity powered electric arc furnace (EAF). These steels are then turned into intermediate steel products such as girders, concrete reinforcing, plate, wire, sheet etc which are then used in final products in buildings, infrastructure, machinery and appliances.
The manufacture of primary steel by the iron and steel sector produces the most emissions of all heavy industry sectors, at approximately 2.0-3.6 Gt CO2 per annum, amounting to 5.6-10% of global combustion and process CO2 emissions. Decarbonising the manufacture of primary steel is only now becoming potentially commercially viable, but will take decades to achieve at substantial scale to decarbonise this huge industry. In-use steel stocks (steel in existing infrastructure and equipment) is fully recyclable if it is kept uncontaminated. Recycled steel is mostly produced in electric arc furnaces, allowing it to be decarbonised relatively easily and cheaply with low-emissions electricity. By improving material efficiency, recycling, and decarbonising primary steel production, the steel industry can become fully decarbonised in line with climate targets.
Abstract from the paper
The production of iron and steel is one of the largest global sources of industrial greenhouse gas (GHG) emissions. South Africa could competitively export near-zero embodied GHG primary iron to steelmakers in leading decarbonising markets. A green primary iron production process substitutes hydrogen for coke as the iron ore reductant. A South African plant would enjoy most of its competitive cost advantage from hydrogen produced using very low-cost solar photovoltaic electricity. In import markets, using the European Union (EU) as an example, steelmakers could use imported green primary iron to increase utilization of electric arc furnaces while reducing total EU demand for clean electricity (i.e. for hydrogen for reduction needs) and thereby lower total system costs of decarbonisation.
South Africa could bolster crucial export and tax revenues while moving towards a broader transition to a sustainable industry. Three things are needed to unlock new global business models involving the relocating of green primary iron production to regions with abundant renewable energy: (1) a steelmaker with access to a hydrogen reduction technology appropriate for South Africa’s ores willing and able to invest in a plant; (2) access to a bankable lead market for that plant’s production; and (3) international trade rules and emissions accounting related to the carbon content of commodities that enable the reconfiguration of supply chains to reduce global decarbonisation costs.
Conclusion
Producing carbon-free primary iron in South Africa using green hydrogen direct reduced iron (GHDRI) technology could create a new globally competitive green export industry. Such exports would also reduce the cost of decarbonising global steel production, owing to the relative cost advantages of producing renewable energy in South Africa and, therefore, green hydrogen. Producing GHDRI involves a type of furnace that uses hydrogen for the direct reduction of the iron-ore, as opposed to the traditional route that uses coke.
