Steelmaking. A useful map of the low-carbon emission programs in Europe

Climate change is one of today’s most pressing global issues across all sectors, with crude steel and iron production being among the biggest offenders in terms of CO2 emissions. However, the steel industry decarbonization presents unprecedented challenges, such as finding a way to remain competitive in the face of demand volatility, market overcapacity, and low margins, as well as geopolitical implications.

All over the world, steel is mainly produced using two methods, electric arc furnaces (EAF, utilizing scrap) or blast furnace basic oxygen furnace (BF-BOF, utilizing coke, scrap, and iron ore).

Since the prevalent production technology in Europe is the coal-dependent BF-BOF method, it is of paramount importance to implement alternative technologies to reduce carbon dioxide emissions. One way to decarbonize would be to replace fossil fuels with green hydrogen produced from renewable sources (e.g. via water electrolysis).

As reported by Eurofer, European steel manufacturers are already leading the way in this regard and are currently investing in 60 key low-CO2 projects that would help cut emissions in the EU steel industry. The goal is to achieve a -55% reduction by 2030 (compared to 1990 levels) and finally carbon neutrality by 2050.

Here is the map showing an overview:


At this link is the interactive map, which allows you to explore in detail the technologies implemented and the expected year of launch.

The majority of these programs are planned to kick in before 2030 and can potentially reduce CO2 emissions by 81.5 million tons per year (which accounts for 1/3 of direct and indirect emissions) in just eight years from now. Eurofer also updates the map regularly, taking into account ongoing developments.

However, reports Eurofer, the transition towards CO2 neutrality by 2050 should take into account 2 elements:

Cost-competitive sources of electricity and hydrogen
Currently, the EU steel industry consumes annually about 75 TWh of electricity for the operation of steel processes. Beyond this annual consumption of electricity, the above projects will also require about 1.78 million tonnes of hydrogen (corresponding to about 75 TWh of electricity, if this hydrogen is produced via water electrolysis), which means in total about 150 TWh (+100% of current consumption) of decarbonized electricity by 2030. At the present moment, the production costs of green hydrogen vary by region and are higher than traditional fossil fuel technology. Looking ahead, they should reduce as production capacity and subsidies for renewables and green hydrogen increase.

Carbon leakage and supportive legislative framework
Carbon leakage occurs when, for reasons of costs related to climate policies, businesses transfer their production to other countries with more relaxed emission constraints, potentially leading to an increase in their total emissions. To reach EU's virtuous goals, it is therefore necessary to expand the legislative framework in order to effectively addresses carbon leakage both during and after their implementation. This would ensure a level playing field with third-country contenders and safeguard the competitiveness of the EU steel industry.