ArcelorMittal using DRI and Smart Carbon to achieve clean steel

ARCELORMITTAL said it will use direct reduced iron (DRI) and Smart Carbon technologies to reduce its global carbon emissions intensity by 25%, by 2030. The steel and mining company expects to invest about US$10bn to achieve its goal.

The target relates to ArcelorMittal’s scope 1 and 2 emissions. Scope 1 emissions are direct greenhouse gas (GHG) emissions from sources owned and controlled by a company. Scope 2 emissions indirect emissions, associated with generating energy consumed by a company.

ArcelorMittal announced its target with the release of its second climate action report on 29 July. The target would see it achieve 1.54 t CO2e/t of steel (down from 2.06 t CO2e in 2018), by 2030. The company has also increased its European 2030 carbon emissions intensity reduction goal from 30% to 35%. The new goal would see the company’s European emissions intensity go down from 1.7 t CO2e to 1.11 t CO2e. The company’s total global and European emissions were 152.2m t CO2e and 67.4m t CO2e, respectively, in 2018.

In its latest climate action report, ArcelorMittal provides a roadmap illustrating what it expects in the journey to net zero steelmaking. ArcelorMittal announced its goal to achieve net zero by 2050 in September 2020. In its report it identifies five areas to focus on to achieve net zero.

One of the five focus areas is steelmaking transformation. The company expects that during the coming decade, assets used to make steel will undergo a transformation on a scale not seen for more than 100 years. This will, in the first phase, see a transition from using coal (in blast furnaces) to natural gas (in DRI plants), which would then be followed by green hydrogen DRI, that relies on hydrogen gas for reduction. DRI involves removing oxygen from ore, or other iron bearing compounds, in the solid state. Using green hydrogen to fuel plants would enable zero carbon emissions.

ArcelorMittal is developing DRI-EAF (direct reduced iron-electric arc furnace) technology as a pathway towards net zero steelmaking.

The company’s announced DRI-EAF projects include a 2.3m t/y hydrogen-powered DRI unit in Gijón, Spain along with a new hybrid EAF. The project is expected to reduce the company’s emissions in Spain by 50%. In 2018, ArcelorMittal’s emissions totalled 8.8m t/y in Spain.

DRI produced at Gijon will be transported to ArcelorMittal’s steel plant in Sestao, Spain, where it will be used as feedstock in two EAFs. By 2025, the company expects the site will be producing 1.6m t/y of zero-carbon emissions steel. ArcelorMittal expects the facility will be the first full-scale zero carbon-emissions steel plant.

ArcelorMittal is also developing what is calls Smart Carbon as a route towards zero-carbon steel. These technologies include, for example, a circular carbon project called Torero. This involves a process that makes steel-specific renewable energy from waste wood and waste plastic via torrefaction, a thermochemical process that aims to decrease the water and volatiles content from biomass and thus improve fuel properties.

At its site in Ghent, Belgium, ArcelorMittal is constructing an industrial-scale demonstration Torero plant that will convert waste wood into renewable energy. Reactors 1 and 2, expected in 2022 and 2024 respectively, will produce 40,000 t/y of biocoal for use in blast furnaces.

ArcelorMittal says while it expects DRI and Smart Carbon will be important in achieving  net zero neither is yet fully technically or commercially proven.

As the leader of a seven-partner collaboration, ArcelorMittal is also developing direct electrolysis of iron to help decarbonise steel. This technology would use electricity to directly decompose iron oxide into iron metal and oxygen gas.

The specific routes that ArcelorMittal adopts are likely to differ between regions, depending on policy choices and the availability of Government funding. For example, the company says it has been able to accelerate plans for its claimed world first zero carbon-emission steel plant in Spain because of government policy to accelerate the availability of green hydrogen.

In addition to steelmaking production technologies, other areas for focus which ArcelorMittal discusses include an energy transformation in the steel industry from high-emitting fossil fuel-based energy to low and zero-carbon emissions forms of energy. This would include green hydrogen, circular forms of carbon, and CCUS technologies. It will also make use of scrap in steelmaking, source clean electricity, and offset residual emissions, for example through projects to generate high-quality carbon credits.

Over time, ArcelorMittal expects that low-carbon steelmaking technologies will become more competitive than higher-carbon steelmaking technologies. However, it adds that this will require support from well-designed policy to help moderate initial capital costs.

In its report, ArcelorMittal outlines a combination of policy instruments needed to address the significant capital investment expenditure to transition to new zero-carbon emissions technologies. It also discusses policy to address higher operating costs associated with these technologies expected until low emissions technologies become more competitive. These include instruments such as contracts for difference, which have been used to support the greater use of renewable energy.

Target assumptions

ArcelorMittal’s recently announced targets are based on a set of assumptions, including that the cost of green hydrogen will become increasingly competitive over the next decade but will still require government support; carbon capture, use, and storage (CCUS) infrastructure will take time to build at scale; different regions of the world will continue to move at different paces and the level of climate ambition will differ between jurisdictions at any given time; and the introduction of climate-friendly policies in other regions will be 5–10 years behind Europe.

Reflecting on these assumptions, ArcelorMittal has designated the regions in which it operates as either “accelerate” or “move”.

In accelerate countries such as Europe and Canada – where ArcelorMittal expects to see sufficient policy incentives – the company aims to be more ambitious in its decarbonisation plans. Where policy environments are not yet providing meaningful decarbonisation support for the steel industry and accelerating without policy support would make the company’s assets uncompetitive, ArcelorMittal says it will still make improvements to move.

These designations can change with time, for example in the US ArcelorMittal expects to “move” between 2021 and 2025, and then accelerate in 2026–2030 and 2031–2035.

Aditya Mittal, CEO of ArcelorMittal, commented: “As the world’s most prolific material, steel can make a huge contribution to the decarbonization of the global economy. Steel is already the material of choice due to its lower carbon footprint and high recyclability. But we can and must go further as zero carbon-emissions steel has the potential to be the backbone of the buildings, infrastructure, industry and machinery, and transport systems that will enable governments, customers and investors to meet their net-zero commitments.”

ArcelorMittal also announced a new collaboration with the Science Based Target initiative (SBTi), which drives ambitious climate action in the private sector by enabling companies to set science-based emissions reduction targets. The collaboration is expected to support SBTi to develop new science-based methodology for the steel sector.

ArcelorMittal says it will publish a science-based target within two years.