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2. Consideration of opportunities for further steel production using end-of-life scrap based on its availability in the regions where we operate.
3. A flexible, integrated innovation programme to develop the technologies for steelmaking in a low-emissions circular future.
4. Policy analysis and engagement to understand and advocate for the policies that will support the transition to a low-emissions future in the different geographies where we operate.
1. Energy efficiency programme.
Over the last decades, the steel industry has significantly reduced the carbon intensity of steel, by focusing on energy efficiency gains and yield improvements.
For example, ArcelorMittal is today a leader in industrial gasinjection technology. This has enabled us to increasingly replace metallurgical coke with alternative sources of carbon such as pulverised coal or natural gas. Some of our most advanced blast furnaces are now injecting 50% of the total carbon required for the process using this technology – with the effect of reducing the total amount of fossil fuels required. This capability to use the blast furnace as a large-scale ‘gasifier’ in industry puts us in a good position for the adoption of low-emissions technologies for steelmaking.
Our business segments are now required to prepare CO2 reduction plans as part of the annual planning cycle, making use of a range of existing and innovative approaches.
To support them, our global R&D team is continually innovating to deliver energy efficiency and yield improvements. In 2018, we deployed 19 new processes to this end. However, many plants are approaching the physical limits of energy efficiency, and a transition to low-emissions technologies is needed to deliver further substantial emissions reductions.
Each year our Investment Allocation Committee (IAC) allocates capital to investment projects that improve energy performance. Proposals to the IAC are required to assess the CO2 benefit of the project, enabling an assessment with a suitable carbon price to reflect the local context.
In 2018, ArcelorMittal made capital allocations totalling $247 million for 26 projects aimed at improving energy efficiency, bringing the three-year total to $728 million.
11 By 50% in about 75 years, based on DEH data of consumption of reducing agents used in blast furnaces in Germany (including Eastern Germany from 1991). 12 This is the multi-year budget covering our low-carbon development and demonstration programme with partners, aimed at building industrial pilots and demonstrations and is additional to our annual R&D expenditure.
$728m Capex allocated to energy efficiency improvements in the last three years 20 ARCELORMITTAL CLIMATE ACTION REPORT 1 CONTENTS PREVIOUS BACK FORWARD
2. Further opportunities for secondary steelmaking.
The availability of end-of-life scrap is projected to increase globally over the coming decades as increasing amounts of building structures and equipments approach their end of life. By 2050, there will be sufficient supplies to feed some 50% of global steel production. As this availability increases in regions where we operate, we will consider creating additional opportunities for secondary steelmaking in electric arc furnaces.
ArcelorMittal currently operates 32 electric arc furnaces across the world, of which 13 are located in Europe. In 2018 we produced 19% of our steel from these furnaces.
Blast furnace facilities and electric arc furnaces *The 2018 BF footprint presented above is not including the Ilva remedies (Ostrava and Galati). Including these assets the total number of BFs is 58.
12 2
6 7
22 13 11 10.
Blast furnaces*
Electric arc furnaces.
NAFTA Brazil Europe ACIS 21 ARCELORMITTAL CLIMATE ACTION REPORT 1 CONTENTS PREVIOUS BACK FORWARD
ArcelorMittal strategy towards low-emissions steelmaking 3. Flexible, integrated, circular approach to innovation.
The global challenge posed by the transition to low-emissions steelmaking is large and complex, and will require multiple solutions. Our innovation approach is focused on providing flexibility to adapt to different possible clean energy futures in different regions and countries, whether it is clean power, circular carbon, or fossil fuels with CCS, or a combination of all three.
The strength of our €250 million research and demonstration programme is its breadth and flexibility. While each of our technologies can be stand alone and scaled up individually, we can also integrate them to deliver significant advantages for the various low-emissions steelmaking pathways.
The key technologies in this programme are represented in Figure 4.
In addition, our innovation approach supports three key underlying principles of a low-emissions circular economy: • Supporting the advancement of renewable energy by developing technologies that can make use of intermittent renewable power from wind and solar (either directly or indirectly through hydrogen), thus helping to reduce grid instabilities. • Accelerating the circular economy by developing technologies that enable waste streams to be reused commercially, turning them into materials and feedstock for other industries and sectors. • Creating industrial symbiosis between the steel, chemicals and cement industries through a logistics network to share and reuse CO2 as a feedstock for the production of chemicals. The logistics network can be expanded further to transport and store CO2 , for example in depleted oil fields.
4. Policy analysis and engagement.
We have analysed the energy resources, costs and infrastructure needed for each low-emissions technology pathway and assessed the implications of different policy scenarios on the pace of deployment of these technologies (see chapter 4).
This analysis forms the basis for our policy recommendations to accelerate the transition to low-emissions steelmaking, which are presented in chapter 6.
To build an understanding of the need for policy support, ArcelorMittal engages with customers and investors as well as policymakers and global organisations regarding our outlook for low-emissions steelmaking. This includes organisations such as the We Mean Business coalition, the World Business Council for Sustainable Development, CDP, the Science-Based Targets Initiative and the International Energy Association.
Low-emissions steelmaking.
Circular Carbon.
IGAR.
Torero.
Carbon2value.
Carbalyst®
H2 Hamburg.
Siderwin.
Fossil Fuels with CCS Clean Power.
Figure 4 22 ARCELORMITTAL CLIMATE ACTION REPORT 1 CONTENTS PREVIOUS BACK FORWARD
There is no ‘one size fits all’ solution to move away from emissions-intensive steelmaking. Our technology portfolio enables us to pursue the full range of possible technology pathways, depending on which becomes the most viable in the countries and regions where we operate.
ArcelorMittal’s low-emissions innovation programme.
Today, the reduction of iron ore to iron is predominantly achieved using high temperature carbon monoxide (CO), sourced from fossil fuels – coke and pulverised coal – which is also used as an affordable source of energy.
Science has given us three alternatives to this: deriving CO from circular forms of carbon, applying the process of electrolysis, or using high-temperature hydrogen gas.
The latter two pathways require vast amounts of electrical energy, which would all need to come from clean sources. Such quantities of clean power will not become available to the steel industry overnight at affordable prices.
To reduce emissions within the timeframe needed, therefore, ArcelorMittal is exploring opportunities to combine technologies that use more clean power with those that involve circular sources of carbon, alongside carbon capture, carbon utilisation and carbon storage.
Our portfolio of technologies offers us the ability to respond to whichever energy sources are made affordable by the policy frameworks in place. Our key projects are outlined in detail over the pages that follow.
Figure 5: From iron ore to iron for primary steelmaking.
CO H2.
High-temperature gas Electricity.
Iron.
Iron ore.
Hydrogen gas reduction Reduction by electrolysis.
Carbon monoxide gas reduction 23 ARCELORMITTAL CLIMATE ACTION REPORT 1 CONTENTS PREVIOUS BACK FORWARD
ArcelorMittal strategy towards low-emissions steelmaking.
Torero: reducing iron ore with waste carbon.
Today, most blast furnaces reduce iron ore using a hightemperature, synthetic gas derived from coal and coke. This makes the modern blast furnace with its high-tech gasification technology ideal for replacing fossil fuels with ‘circular carbon’ inputs, such as bio-waste, including agricultural and forestry residues, and even waste plastics.
Our Torero project targets the production of bio-coal from waste wood to displace the fossil fuel coal that is currently injected into the blast furnace. We are developing our first large-scale Torero demonstration plant in Ghent, Belgium. In this €40 million project (with €12 million funding from EU Horizon2020) we aim to convert 120,000 tonnes of waste wood annually into bio-coal. This source of waste wood is considered hazardous material if burnt in an incinerator as harmful gases would be emitted, but in the blast furnace no such pollutants can be formed.
Future projects would see expansion of sources of circular carbon to other forms of bio-based and plastic waste.
With its high-tech gasification technology, the modern steel industry is the ideal sector to advance the circular economy by reusing bio-waste, plastic waste, and agricultural and forestry residues.
Circular Carbon.
Low-emissions steelmaking.
Clean Power.
Fossil Fuels with CCS.
Figure 6: the Torero process.
Blast furnace.
Torrefaction.
Waste biomass.
Biocoal 24 ARCELORMITTAL CLIMATE ACTION REPORT 1 CONTENTS PREVIOUS BACK FORWARD
IGAR: reforming carbon to reduce iron ore.
The IGAR13 project aims to capture waste CO2 from the blast furnace and convert it into a synthetic gas (syngas) that can be reinjected into the blast furnace in place of fossil fuels to reduce iron ore. Since the amount of coal and coke needed in steelmaking is reduced, this process helps to reduce CO2 emissions.
The syngas we need is made up of carbon monoxide (CO) and hydrogen (H2). To form this, waste CO2 is heated with natural gas (CH4) to very high temperatures using a plasma torch – a process called dry reforming.
In future, we hope to use bio-gas or waste plastics in place of natural gas, furthering the use of circular carbon. And with the plasma torch running on clean power, the entire process enables substantial emissions reductions.
The IGAR project has seen a number of phases. Last year, to overcome the corrosive effects of the high-temperature syngas involved, our R&D labs in Maizières, France, developed both the specialist metals and refractories needed.
Today in Dunkirk, France, ArcelorMittal is running a €20 million project, supported by the French ADEME, to construct a plasma torch. To test-use the hot syngas created by the plasma torch, a pilot project is also running at the same plant.
Waste CO2 can be reformed into a synthetic gas suitable for reducing iron ore, giving it a second life. Our ultimate goal is to use clean power and waste plastics for low-emissions circular carbon steelmaking.
Circular Carbon.
Low-emissions steelmaking.
Clean Power.
Fossil Fuels with CCS.
Figure 7: IGAR process.
CO+H2 CO2.
Biogas.
Plastics.
Electricity.
Blast furnace.
Plasma torch 13 Injection de Gaz Réformé 25 ARCELORMITTAL CLIMATE ACTION REPORT 1 CONTENTS PREVIOUS BACK FORWARD