How Can the Steel Industry Be Decarbonized?

The steel industry is a major emitter of carbon, but some technologies have helped reduce emissions. Some of the newer technologies include hydrogen-based reduction and carbon capture and storage. Some processes are also becoming more efficient and circular. The steel industry can be decarbonized if new technologies are developed to replace primary production.

Iron and steel

Decarbonization of the iron and steel industry will require substantial investment, and the government will need to provide support. Currently, new technologies and research are not sufficiently funded. It will also require an integrated approach between the industry and the environment. Nearly 200 countries recently adopted the global climate pact, reflecting their desire to reach carbon neutrality by the end of the century. To achieve decarbonisation of the industry, the entire supply chain must work together to reduce emissions.

For example, governments must set policies to promote research and development of green technologies. One example is the Emissions Trading System (ETS) Directive, which was established to reduce emissions from industry. The ETS currently provides exemptions for the steel industry, but proposed regulations will phase out these allowances in 2026. A similar initiative has been proposed by the European Parliament.


The use of hydrogen can help decarbonize the steel industry, but it will take coordinated political action. First, carbon prices must be increased and the cost of hydrogen reduced. Then, the steel industry must buy into the hydrogen economy. Ultimately, the cost of green hydrogen will go down, but we need to see it come to a point where it can be cost-effective for the steel industry to make the switch.

Currently, a number of companies are trying to implement hydrogen into the steel making process. In Sweden, a private-sector company called HYBRIT has teamed up with global steel maker SSAB, energy company Vattenfall, and a mining company called LKAB. The companies are working with the Swedish Energy Agency and the EU Innovation Fund to make the switch to hydrogen. HYBRIT plans to use local, cheap wind power to electrolyze water and produce vast amounts of hydrogen.

Direct reduced iron

Direct reduced iron (DRI) is a low-carbon input that can be used in the production of steel. Its high iron content makes it an ideal feedstock for electric arc furnaces, which produce steel without using coke from blast furnaces. DRI can also be produced in a compressed form, called hot briquetted iron. This material is easily transportable and can be stored.

Direct reduced iron is produced by removing oxygen from solid iron ore. This process has multiple benefits, including lower emissions.

Electric arc furnace

An electric arc furnace (EAF) is a cylindrical furnace that melts steel and other metals. It is a complex device made from heavy steel plates with a dish-shaped refractory hearth and three vertical electrodes. The top part of the furnace is covered with a dome-shaped removable roof. The EAF shell can be 2.5, 6 or 9 meters in diameter. The shell is supported on a hydraulic rocker that tilts the furnace for tapping and slag removal. Its bottom section is lined with tar-bonded magnesite bricks. Each electrode string is bolted to a vertically movable mast that controls the distance between the electrode tips and the scrap or melt.

While the electric arc furnace is not the only option for decarbonising steel, it could help reduce carbon emissions. This technology is increasingly being used to recycle scrap steel. It is expected that the use of electric arc furnaces will account for around 15% of global steel production by 2025.

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