Trends in the Global Steel Industry: Evolutionary Projections and Defossilisation Pathways through Power-to-steel

Steel production is a carbon and energy intensive activity, releasing 1.9 tons of CO2 and requiring 5.17 MWh of primary energy per ton produced, on average, globally, resulting in 9% of all anthropogenic CO2 emissions. To achieve the goals of the Paris Agreement of limiting global temperature increase to below 1.5 °C compared to pre-industrial levels, the structure of the global steel production must change fundamentally. There are several technological paths towards a lower carbon intensity for steelmaking, which bring with them a paradigm shift decoupling CO2 emissions from crude steel production by transitioning from traditional methods of steel production using fossil coal and fossil methane to those based on low-cost renewable electricity and green hydrogen. However, the energy system consequences of fully defossilised steelmaking has not yet been examined in detail. This research examines the energy system requirements a global defossilised power-to-steel industry using a GDP-based demand model for global steel demands, which projects a growth in steel demand from 1.6 Gt in 2020 to 2.4 Gt in 2100. Three scenarios are developed to investigate the emissions trajectory, energy demands, and economics of a high penetration of direct hydrogen reduction and electrowinning in global steel production. Results indicate that the global steel industry will see green hydrogen demands grow significantly, ranging from 2809 to 4371 TWhH2 by 2050. Under the studied conditions, global steel production is projected to see reductions in final thermal energy demand of between 38.3% and 57.7% and increases in total electricity demand by factors between 15.1 and 13.3 by 2050, depending on the scenario. Furthermore, CO2 emissions from steelmaking can be reduced to zero.