Biomethane, a game changer for the steel industry's decarbonization efforts

The recent approval of an amendment by the Italian Senate promoting the use of biomethane in hard-to-abate sectors marks a significant milestone in the industry’s journey toward decarbonization. Federacciai, the Italian Steel Industry Association, has lauded this legislative move, recognizing its potential to revolutionize the energy landscape of industries such as steel manufacturing.

Several international examples highlight the growing adoption of biomethane in the steel industry. As early as 2020, Ternium Brazil announced that it had become the first steel producer in Latin America to utilize biomethane derived from waste gas in its operations.

In Europe, the European Commission has been actively supporting the adoption of biomethane through initiatives like the REPowerEU plan, which aims to scale up biomethane production to 35 billion cubic meters per year by 2030.

Biomethane in steel production

Biomethane, a purified form of biogas produced from the anaerobic digestion of organic matter, can be integrated into various stages of steel production as a substitute for natural gas. In the Direct Reduction of Iron (DRI) process, biomethane can replace natural gas to reduce iron ore, thus lowering the carbon footprint of steel production. It can also serve as an alternative fuel in heating furnaces, which require substantial amounts of natural gas to reach the high temperatures needed for processing steel, thereby reducing CO2 emissions. Additionally, steel plants with their own power generation units can switch to biomethane to generate electricity with fewer greenhouse gas emissions. Although more challenging, biomethane can also be used in modified blast furnaces, either directly or as part of a fuel mix, requiring specific adaptations to furnace design and operations.

Legislative support and industry impact

The Italian Senate amendment not only supports the use of biomethane but also facilitates direct contracts for the sale and purchase of biomethane between producers and companies in hard-to-abate sectors. Antonio Gozzi, President of Federacciai, highlighted the significance of these initiatives, stating, "All measures that promote the use of alternative energies in various industrial sectors, ensuring a safe and environmentally friendly energy supply, are welcome. Among these, biomethane represents a viable alternative to reduce direct emissions (scope 1) from the steel industry."

As we reported earlier, the Italian steel industry has emerged as a frontrunner in Europe regarding decarbonization and circularity, according to the fifth edition of the Sustainability Report by Federacciai. Over 85% of Italian steel production is achieved by recycling ferrous scrap. Since 1990, the sector has reduced its specific CO2 emissions by 60% and its energy consumption by over 33% since 2000.

Potential downsides of biomethane utilization

While biomethane offers significant environmental benefits for steel production, several challenges must be addressed:

• ■ Scaling up production: Meeting industrial demands is difficult due to limited biomethane production compared to the steel industry's needs.

• ■ Economic feasibility: Higher production costs and infrastructure modifications can impact economic viability.

• ■ Technical challenges: Ensuring compatibility with existing processes and managing biomethane's lower energy density require careful consideration.

• ■ Environmental concerns: Significant challenges include methane leakage during production and the need for sustainable feedstock sourcing.

• ■ Regulatory and policy barriers: Regulatory hurdles and logistical issues related to transport and storage complicate widespread adoption.
  
  

Despite these challenges, biomethane remains a promising alternative to natural gas in steel production due to its potential to significantly reduce greenhouse gas emissions. Continued technological advancements, policy support, and infrastructure development are essential to overcoming these downsides.

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