<p>The Institute for Energy Economics and Financial Analysis said that the latest data from China’s National Bureau of Statistics shows that the country’s monthly crude steel production dropped to a nearly four-year low in October 2021 at 71.6 million tonnes. For the first ten months of 2021, China’s crude steel output is now down 0.7%, the first decline in year-to-date output for at least five years. The policy of keeping production below the previous year’s level may continue into the foreseeable future with implication that steel output will never reach 2020 levels again and it’s possible that Chinese steel production and hence China’s steel sector carbon emissions peaked in 2020. However, even under its net zero emission 2050 scenario the International Energy Agency foresees global steel production rising over the next few decades as the fall in China’s production will be offset by rises in production in developing markets such as India, South-east Asia and Africa as their economies continue to emerge.</p> <p>Meanwhile, there is unlikely to be significant, long-term steel production growth in developed markets where technology changes will help reduce steel sector emissions. US produce about 70% of its steel from recycled scrap, making steel a relatively low emissions intensity sector. EAFs are powered by electricity and further roll-out of wind and solar power will assist the emissions intensity decline still more in the long term. Meanwhile, Europe is set to lead the world in the transition to new, low-emissions steel manufacturing technology such as direct reduced iron facilities that use green hydrogen. How global steel emissions change over those decades will depend to a large extent on the steel technology pathway these developing nations choose in the near term.</p> <p>India is currently the world’s second-largest steel producer, manufacturing 5% of global production, far behind China’s output. However, the IEA notes this could increase to almost 20% by 2050. Thanks to plentiful domestic thermal coal and a dearth of coking coal, India is already a major user of globally-lesser-used DRI technology where gasified thermal coal can produce the carbon monoxide and hydrogen used as the iron ore reductants. India’s iron and steel sector is responsible for almost a third of India’s direct industrial emissions. Small production facilities and low utilisation of scrap steel contribute to the higher-than-average carbon emissions intensity of the Indian steel sector in addition to its high reliance on coal in both DRI and blast furnace production pathways. There is potential to reduce emissions from India’s DRI steel plants by replacing gasified coal with green hydrogen as it becomes cost-competitive. India was one of five nations that pledged recently to drive demand for low-carbon steel under the Industrial Deep Decarbonisation Initiative.</p> <p>However, India’s steel emissions pathway will depend to a large extent on how far blast furnace additions go as its economy continues to expand. To date, there has been no industrial-scale carbon capture projects announced that could lower blast furnace emissions.</p>
<p>The Institute for Energy Economics and Financial Analysis said that the latest data from China’s National Bureau of Statistics shows that the country’s monthly crude steel production dropped to a nearly four-year low in October 2021 at 71.6 million tonnes. For the first ten months of 2021, China’s crude steel output is now down 0.7%, the first decline in year-to-date output for at least five years. The policy of keeping production below the previous year’s level may continue into the foreseeable future with implication that steel output will never reach 2020 levels again and it’s possible that Chinese steel production and hence China’s steel sector carbon emissions peaked in 2020. However, even under its net zero emission 2050 scenario the International Energy Agency foresees global steel production rising over the next few decades as the fall in China’s production will be offset by rises in production in developing markets such as India, South-east Asia and Africa as their economies continue to emerge.</p> <p>Meanwhile, there is unlikely to be significant, long-term steel production growth in developed markets where technology changes will help reduce steel sector emissions. US produce about 70% of its steel from recycled scrap, making steel a relatively low emissions intensity sector. EAFs are powered by electricity and further roll-out of wind and solar power will assist the emissions intensity decline still more in the long term. Meanwhile, Europe is set to lead the world in the transition to new, low-emissions steel manufacturing technology such as direct reduced iron facilities that use green hydrogen. How global steel emissions change over those decades will depend to a large extent on the steel technology pathway these developing nations choose in the near term.</p> <p>India is currently the world’s second-largest steel producer, manufacturing 5% of global production, far behind China’s output. However, the IEA notes this could increase to almost 20% by 2050. Thanks to plentiful domestic thermal coal and a dearth of coking coal, India is already a major user of globally-lesser-used DRI technology where gasified thermal coal can produce the carbon monoxide and hydrogen used as the iron ore reductants. India’s iron and steel sector is responsible for almost a third of India’s direct industrial emissions. Small production facilities and low utilisation of scrap steel contribute to the higher-than-average carbon emissions intensity of the Indian steel sector in addition to its high reliance on coal in both DRI and blast furnace production pathways. There is potential to reduce emissions from India’s DRI steel plants by replacing gasified coal with green hydrogen as it becomes cost-competitive. India was one of five nations that pledged recently to drive demand for low-carbon steel under the Industrial Deep Decarbonisation Initiative.</p> <p>However, India’s steel emissions pathway will depend to a large extent on how far blast furnace additions go as its economy continues to expand. To date, there has been no industrial-scale carbon capture projects announced that could lower blast furnace emissions.</p>
