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The Swedish government has announced its intention to make its steel production facilities a world leader by developing a new, radically carbon-free production method.
On the other hand, the British government hesitates on the degree of support which it should bring to its steel industry following the decision of the Indian company Tata Steel to close its British steelworks, which will involve the disappearance of approximately 40,000 jobs.
The world is currently experiencing a glut of steel production. China heavily subsidizes its factories and is accused of dumping cheap steel on world markets.
Tata cites this, along with high carbon taxes in the UK, on ​​its decision to close its South Wales plant in Port Talbot. Workers and unions are furious and they and the Labor Party are calling for the nationalization of factories and lower carbon taxes. The British government refuses to consider nationalization.
What a contrast with Sweden. On Monday, Magnus Hall, chairman and CEO of state-owned energy company Vattenfall, along with Swedish steel producer SSAB and Swedish iron ore miner LKAB, announced the start of a long-term research project aimed at to develop a steel production method based on the use of hydrogen to replace coal or natural gas, generated from energy sources without carbon emissions.
The announcement represents a long-term commitment to securing not only a future for steelmaking in Sweden, but also for zero-carbon steelmaking – potentially across the world.
More than 75 percent of all industrial energy consumption in the world is attributable to just four sectors, of which iron and steel form the most important. This is because energy costs as a proportion of total steelmaking costs are high – up to 40%.
Any country that finds out how to produce steel without emitting atmospheric carbon will become a world leader in the race to decarbonize human activity and it will gain a huge competitive advantage. Sweden has announced that it wants to be that leader.
The announcement was made during a webcast by SSAB Chairman and CEO Martin Lindqvist and his LKAB counterpart Jan Moström, with the full support of the Swedish government, represented by his Minister for Enterprise and Mikael Damberg Innovation.
Lindqvist said: “A lot of things are made of iron and steel. We must reduce fuel consumption, but also completely eliminate carbon emissions for a sustainable world. “
In Sweden, steel production is now the biggest emitter of CO2. Lindqvist said: “The Swedish steel production industry is already competitive but emissions are very high – 37% of total emissions, and significant globally. Most iron ore production is done in a blast furnace using virgin materials and coal and you get CO2 emissions. If you use the direct production method, you use natural gas and you also produce CO2.
“So the big difference here will be using hydrogen instead of gas or coal. Then you make water as a by-product. The key is the origin of hydrogen gas.
Hydrogen from what?
So where will it come from? Sweden is already one of the most progressive countries in the world in the energy transition to a world without fossil fuels, with 52% of the energy already renewable, 40% being nuclear, a goal of being carbon neutral. by 2050, and a political roadmap for 2025-2050 expected in January.
Vattenfall operates seven nuclear power plants in the country, but must decommission two. The other five are expected to remain operational until 2040-2045. The company operates power plants in five northern European countries, some of which are fossil fuel-based, but in Sweden its installed production capacity is 59% hydropower, 33% nuclear, 1.88 % wind, 4.87% fossil fuels and 1.31%. percent biomass and waste.
Magnus Hall from Vattenfall said: “Vattenfall has been working in Sweden for a long time on electricity supply and now Sweden has almost CO2-free electricity production. We can use it to create completely CO2-free steel production. It will be economical and include existing nuclear energy. But how can an energy consumer requiring 15 to 20 terawatts do so with renewable and climate-friendly energy? This is what we are looking to find out.
This will involve a significant increase in production capacity, mainly from wind power, to produce gaseous hydrogen, he said.
“We are already producing hydrogen on a small scale in Germany and we will study how to do it on a large scale. We don’t know how big the pilot will be. We don’t see nuclear after 2045, so it will be wind power, but the problem will be to maintain capacity at all times, and flexibility. This is in addition to our discussions on how renewables work.
Lindqvist went on to say that the feasibility study would take eight years, until 2024.
“Then we’ll have a demonstration plant by around 2025, so this is a long-term project. There are a lot of different things to study. It’s a big, complicated project. We need political involvement. We ask politicians to support this and integration with labor policy, and to link energy and social policy. In return, we are committed to devoting time and resources to it. We can make a big contribution to reducing emissions in line with Sweden’s 2045 target.
“We have a unique opportunity,†he said. “We believe we can make the changes necessary to become a more sustainable society and that is why we are doing it.”
But what about the production of the raw material, iron ore? Ore extractor, LKAB has been in operation for 126 years. Moström said its steel market has shifted to direct production using iron ore pellets, which the company now produces.
“Our direct reduction pellets are very low matrix and rich in iron, which gives them great energy efficiency in the direct reduction process as well as in the electric arc furnace process. Pellets also create better conditions for the production of cleaner steel. We are also developing ways to further reduce carbon dioxide emissions from our granulation process.
Mr Damberg called the proposal “a big initiative, because we want to be one of the first fossil-free welfare states in Europe”.
“The Swedish economy is booming, growing by 4%, but global growth is slowing, which is affecting commodity prices. We want to stay one step ahead as a global leader and therefore think long term.
“Coal needs to be replaced in the steel process, and that’s a big technical leap required. The success of the project will mean a big step in the fight against climate change, but also a big step for Swedish industry. In our dialogue with the industry, we always emphasize the long-term perspective and I am glad that the industry agrees.
“Sweden wants to be a world leader in sustainable steel production, with a new industrial strategy for Sweden, which includes sustainability and competitiveness on the world stage.”
What about the cost?
But how much will it cost? No one knew it yet, but it was recognized that it would be “billions”.
The aim is to reduce the cost of producing hydrogen on a large scale. At the same time, the cost of carbon emissions will increase, making hydrogen cheaper in comparison.
It’s a big bet but visionary.
“There are a lot of additional values ​​to having CO2-free iron and steel on an industrial scale,†said Damberg, who did not want to talk about costs. “It’s a pre-study stage, then there will be a pilot, then a production unit, but we see political, economic and environmental gains. At European level, this should generate a lot of interest, and at global level.
Lindqvist said, “It’s going to be billions. It is a risk, and we want to verify in practice that it is possible. You never know, but we wouldn’t start if we didn’t think we had a good chance of succeeding.
There are many ways to produce hydrogen, but splitting water by electrolysis using an electric current is the most likely competitor for the scale required. The US National Renewable Energy Laboratory’s wind-hydrogen project has been underway for more than five years, and results two years ago estimated the cost to be between US $ 4 and US $ 5 per kilogram of hydrogen.
Since hydrogen contains 33.3 kWh of energy per kilogram, delivering 15 TWh would require 500 million kilograms, which would cost US $ 2.5 billion at that price. Using the UK discounted costs for a coal-fired power plant built in 2018 as a comparison, at £ 1.695 billion (US $ 2.43 billion) for the same amount of electricity, the use of wind power is not much more expensive than using coal.
But this basic calculation does not begin to take into account the savings that will be inherent in the new steel production process that will be developed, the chances of reusing hydrogen and the opportunities for scale.
The team may well have a chance.
David Thorpe is the author of:
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