Carbon capture, utilisation and storage (CCUS) is unlikely to play a major role in decarbonising the global steel industry due to low capture rates, high costs and a track record of underperformance, a think tank said in a report on Wednesday.
The global steel sector is responsible for around 8% of the world’s carbon dioxide (CO2) emissions.
But while many major steelmakers and iron ore miners across the world include CCUS as part of their long-term green transition, there has been virtually no progress on commercial-scale CCUS for the decarbonisation of blast furnaces, analysts at the Institute for Energy Economics and Financial Analysis (IEEFA) said in a report.
Also, CCUS for blast furnace-based steelmaking is already being left behind by alternative technology, and the shift from blast furnaces to direct reduced iron (DRI)-based steelmaking that can run on green hydrogen is accelerating, it added.
“CCUS for steel has made little or no commercial progress in Europe. If steel CCUS cannot make progress in Europe where there is a significant carbon price, it cannot be expected to make headway in developing Asia, the seat of major steel demand growth,” it said.
DRI is a cleaner way of turning iron ore into iron, which can then be processed into pellets that can be used in electric-arc-furnaces (EAF).
Carbon capture has been divisive, with many industry figures saying it is too expensive to be viable.
Andrew Forrest, executive chairman of the world’s No.4 iron ore supplier Fortescue Metals, said early in February that CCUS was not a solution for the energy transition.
The Germany-based think tank Agora also said in a report last week that retrofitting blast furnaces with carbon capture facilities “entails the biggest economic and environmental risk.”
However, with steel demand set to remain high in the coming decades, coal-based blast furnaces are not likely to be entirely replaced by new technologies, especially in Asia, and there will still be a role for CCS, said Prabodha Acharya, chief sustainability officer at India’s JSW Group.
“I don’t agree to the theory that carbon capture will not be effective for the steel industry…the solution to go to net zero has to come from carbon capture and storage,” he said.
“The question is when the cost of carbon will cover the cost of capture and utilisation.”
