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ArcelorMittal strategy towards low-emissions steelmaking.
Carbalyst®: capturing carbon gas and recycling into chemicals.
The waste gases that result from iron and steelmaking are composed of the same molecular building blocks – carbon and hydrogen – used to produce the vast range of chemical products our society needs. Today most waste gas is incinerated, resulting in CO2 emissions.
With our partner Lanzatech, supported by the EU Horizon2020 Steelanol project, we are building the first large-scale plant to capture the waste gas and biologically convert it into bio-ethanol, the first commercial product of our Carbalyst® family of recycled carbon chemicals. Thanks to a lifecycle analysis study, we can predict a CO2 reduction of up to 87% compared with fossil transport fuels, so this bio-ethanol can be used to support the decarbonisation of the transport sector as an intermediate solution during the transition to full electrification. In the future, we will expand the family of Carbalyst® products to other biochemicals and biomaterials.
Construction started recently on a €120 million demonstration facility in Ghent, Belgium. Once completed in 2020, the facility will capture around 15% of the available waste gases at the plant and convert them into 80 million litres of ethanol per year. This result will be a CO2 reduction equivalent to 100,000 electric vehicles or 600 transatlantic flights per year.
The carbon-intensive gas produced in ironmaking is an ideal feedstock for biotechnology. With our partner Lanzatech we are working on a family of novel recycled chemicals: Carbalyst®
Circular Carbon.
Low-emissions steelmaking.
Clean Power.
Fossil Fuels with CCS.
Figure 8: Carbalyst® technology.
CO.
Carbalyst® process.
Plastic Chemicals Fabrics Fuel.
Blast furnace.
Ethanol 26 ARCELORMITTAL CLIMATE ACTION REPORT 1 CONTENTS PREVIOUS BACK FORWARD
Carbon2Value: capturing fossil fuel carbon for storage or reuse.
Developing cost-effective technologies to capture and separate CO2 from our waste gases, and liquefy it for subsequent transport and storage or reuse, could be key to the transition to low-emissions steelmaking. Combining this with a circular carbon energy input would further reduce CO2 emissions.
A pilot plant to capture CO2 has been built in Ghent, Belgium, together with Dow Chemicals as part of the Carbon2Value project supported by INTERREG2Seas.14.
Additionally, at Dunkirk, France, a €20 million industrial pilot to capture CO2 using only low-temperature waste heat is under construction with our partner IFPen, supported by the French administration ADEME. This pilot project is aimed at achieving the cost reductions required to make such processes commercially viable.
We are integrating breakthrough technologies to bring down the costs of capturing, purifying and liquefying CO2 from our waste gases. Liquid CO2 can be made available to other industries for reuse, or transported for storage underground.
14 Interreg2Seas: North of France, Flanders, South of Netherlands and UK.
Circular Carbon.
Low-emissions steelmaking.
Clean Power.
Fossil Fuels with CCS.
Figure 9: fossil fuel carbon capture and storage.
Transportation.
Blast furnace.
CARBON CAPTURE.
CO2.
CO2.
CO2.
CO2 CO2.
CO2.
Storage 27 ARCELORMITTAL CLIMATE ACTION REPORT 1 CONTENTS PREVIOUS BACK FORWARD
ArcelorMittal strategy towards low-emissions steelmaking.
Figure 10: reducing iron ore with hydrogen H2 Hamburg: reducing iron ore with hydrogen.
Today, in a Direct Reduced Iron (DRI) furnace fed with natural gas (CH4), approximately 50% of the reaction comes from hydrogen (H2), and the remainder from carbon monoxide. Technologies can be developed to increase the proportion of hydrogen used up to 100%.
We are planning a new project at our Hamburg site to use hydrogen on an industrial scale for the direct reduction of iron ore in the steel production process. Project costs amount to around €65 million.
The project will allow us to develop an understanding of how our existing DRI plants could take advantage of green hydrogen (generated from renewable sources), should this become available and affordable at some point in the future. While theoretically the reduction of iron ore with pure hot hydrogen is understood, a large number of practical roadblocks still exist. These can only be studied when the process is running on a large scale, which has until now not been done due to the lack of hydrogen infrastructure.
The process of reducing iron ore with hydrogen will first be tested using hydrogen generated from gas separation. We aim to achieve the separation of H2 with a purity of more than 95% from the waste gas of the existing plant, using a process known as ‘pressure swing absorption’. In the future, the plant should also be able to run on green hydrogen when it is available in sufficient quantities at affordable prices.
The experimental installation at the Hamburg DRI plant will demonstrate the technology with an annual production of 100,000 tonnes.
Abundant and affordable clean power would also enable low-emissions steelmaking with ‘green hydrogen’. We are preparing a demonstration project in Hamburg to test this on a large scale.
Circular Carbon.
Low-emissions steelmaking.
Clean Power.
Fossil Fuels with CCS.
H2.
H2.
Iron (DRI)
Green hydrogen.
Waste gas processing.
Iron ore.
Hydrogen gas reduction 28 ARCELORMITTAL CLIMATE ACTION REPORT 1 CONTENTS PREVIOUS BACK FORWARD
Figure 11: the Siderwin process Siderwin: reducing iron ore via electrolysis.
In principle, iron can be reduced from iron ore (Fe2O3 or Fe3O4) through direct electrolysis. When iron ore is introduced into an electrolytic bath (a bath with an electrical current running through two electrodes), the iron (Fe) will be attracted to one electrode and the oxygen (O) to the other.
Our R&D laboratories in Maizières, France, have developed the first electrolytic cell prototype, proving the viability of iron electrolysis. It also showed that the process can operate in a highly flexible start/stop mode, ideal for power grids dependent on large amounts of intermittent renewable power. Moreover, our tests have shown that less power is required than is needed to make hydrogen from water using electrolysis.
ArcelorMittal is the lead company of the Siderwin project, which is further developing this technology. Together with 11 partners and with €7 million funding from EU Horizon2020, a threemetre industrial cell is under construction and various types of iron ore sources (including waste sources) will be tested.
With sufficient access to affordable clean power, the development of this process will pave the way to zeroemissions iron ore reduction.
Once affordable clean power is abundantly available, direct electrolytic iron ore reduction becomes a very attractive route. With the Siderwin project, we are building an industrial pilot.
Circular Carbon.
Low-emissions steelmaking.
Clean Power.
Fossil Fuels with CCS.
Electricity.
Iron.
Iron ore.
Electrolytic bath + –
Fe O2 29 ARCELORMITTAL CLIMATE ACTION REPORT 1 CONTENTS PREVIOUS BACK FORWARD
6 Policy recommendations.
ArcelorMittal advocates the development and implementation of carbon regulations and market mechanisms to enable the rapid deployment of low-emissions steelmaking that will deliver the global objectives of the Paris Agreement.
Global recommendations 1. Global level playing field. A global framework to create a level playing field is needed to avoid the risk of carbon leakage, for example, through green border adjustments. This is to ensure that steelmakers bearing the structurally higher operating capital costs of low-emissions technology can compete with imports from higher-emissions steelmakers.
2. Access to abundant and affordable clean energy. Policies giving the steel industry access to abundant and affordable renewable electricity will be key to scaling up the Clean Power pathway. For acceleration of the circular carbon pathway, the steel industry requires priority access to biomass and waste.
3. Facilitating necessary energy infrastructure. In addition to abundant renewable electricity, policies to support investments in hydrogen infrastructure will be needed to advance large-scale hydrogen-based processes. Similarly, for the Fossil Fuels with CCS pathway, enabling policies are also important to accelerate the development of carbon transport and storage infrastructure and services.
4. Access to sustainable finance for low-emissions steelmaking. The scale of the challenge requires an acceleration of technology development and roll out. Breakthrough steelmaking technologies need to be identified as a key priority area for public funding.
5. Accelerate transition to a circular economy. Materials policy should divert waste streams from landfill and incineration. It should focus on driving recycling and reuse of all waste streams and incentivise the use of waste streams as inputs in manufacturing processes. It should reward products for their reusability and recyclability.
Given that our most substantial climate-related risks are located in the EU, we present specific policy recommendations for this region in box 8.
Box 7: ResponsibleSteel™
ArcelorMittal has taken a leading role in forming ResponsibleSteel™, the steel industry’s first multistakeholder global certification initiative. ResponsibleSteel™ aims to give businesses and consumers confidence that steel certified under this standard has been sourced and produced responsibly at all levels of the supply chain: from mining to production processes, to final stage sales and distribution. The certification standard includes requirements on carbon alongside other air emissions, water responsibility, biodiversity, human rights, labour laws, local communities, business integrity and supply chain management.
The carbon standards within ResponsibleSteel™ are undergoing consultation in 2019 and are expected to be in line with the Paris Agreement. So whilst this initiative will not compensate steelmakers for the structurally higher costs of low-emissions steelmaking, it could play an important role in driving the commitment of steel companies to achieving the Paris objectives.
30 ARCELORMITTAL CLIMATE ACTION REPORT 1 CONTENTS PREVIOUS BACK FORWARD
Box 8: long-term EU climate policy recommendations for steel.
To reduce the risk of carbon leakage, the EU Emissions Trading Scheme (ETS) includes a system of free allocation of emissions allowances. The amount of allowances allocated to each facility is based on a benchmark, which should mean that the top 10% best performing plants are not faced with additional carbon costs. However, the benchmark currently determined for integrated steel plants means that even the best performing plant in the world must purchase emissions allowances.
In Phase 4 of the EU ETS, we could face an increase in marginal production costs by around €50 per tonne of steel15 with €5 billion in potential cumulative costs as a result (see chapter 8).
At the same time, steel is also imported into Europe, often from countries without a comparable carbon cost. This means that EU producers absorbing the structurally higher structural costs of breakthrough technologies are competing against more carbon-intensive manufacturers with lower operating costs. A recent study estimated that about a quarter of global CO2 emissions are embedded in products that are traded across national boundaries, a substantial share of which contain steel.16.
Without a green border adjustment, the lowest-cost approach to reduce GHG emissions within the EU ETS is to import steel from outside the EU (carbon leakage).
In addition to the global policy recommendations, therefore, the following are needed in the European context: 1. Green border adjustment to ensure level playing field. To incentivise long-term investments in carbon efficiency and low-emissions technologies, a level playing field is an essential first step. The best way to do this in the framework of the EU ETS is to implement a green border adjustment, where steel importers pay for the embedded CO2 emissions of imported steel at the same rate as European manufacturers. This would safeguard the competitiveness of the European steel industry. We are engaging with European governments on the implementation of a green border adjustment, a position also supported by the European Steel Association (Eurofer).
2. Access to abundant and affordable clean energy. This is currently not available nor economically viable in Europe. Improvements are therefore needed in the EU state aid rules for energy and environment to enable the roll out of low-emissions steelmaking.
3. Access to sustainable finance for low-emissions steelmaking. Some of our current R&D projects are funded by EU Horizon 2020. Accelerating and rolling out low-emissions steelmaking will need further public funding through, for example, the EU ETS Innovation Fund. Definitions of projects eligible under the draft EU Sustainable Finance legislation should consider their contributions to the low-carbon circular economy. In particular, the development of smart circular carbon loops should be incentivised.