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The biggest climate problem with cars is tailpipe emissions. Fortunately, the electric vehicle industry is booming; a June 10 Bloomberg forecast predicts that by 2030 at least 34% of new cars sold globally will be zero carbon, even without any new policies to accelerate the transition (and at least 58% with more government support aggressive). This is up from just 4% in 2020.
But even if every car were powered by electricity produced by solar panels and wind turbines, automakers would still have a large carbon footprint, thanks to their reliance on the notoriously carbon-intensive steel industry. Today, the transition to green steel is strongly encouraged by Volvo, which on June 16 announced an agreement to become a reference customer for a state-of-the-art low-carbon steel plant in Sweden.
Why steel has a large carbon footprint
Steel production requires a lot of coal, which for the past thousand years was the only way to produce temperatures high enough for smelting. Industry has been slow to develop cleaner alternatives and remains responsible for 7-9% of all greenhouse gas emissions. And steel production accounts for about a third of the emissions from the manufacture and assembly of a typical car.
As part of the deal, Volvo will buy steel made by automaker SSAB at its experimental HYBRIT plant, which claims to be the first in the world to use hydrogen instead of coal as the furnace fuel source, l ‘hydrogen in turn being produced from zero carbon. electricity from wind farms and hydroelectric dams.
The plan is still in its early stages: the HYBRIT plant will not operate at full commercial scale until 2025, and Kerstin Enochsson, Volvo’s purchasing manager, said the automaker would need by this. that year to deploy a pilot fleet of cars made from the new steel and make sure they are up to the task. Until then, the new Volvos will be made from the same old steel.
It’s still early for green steel
Yet making Volvo one of HYBRIT’s first major customers will go a long way in building momentum around the emerging field of industrial green hydrogen at a time when the technology continues to prove its worth and to prove itself to investors. , says Nate Aden, senior partner at World Resources Institute Business Center. The Volvo-SSAB deal “could provide essential commercial proof of concept for this technology,” he said. “It would be huge to demonstrate its viability and scalability. “
Five of the six largest steel producers in the world, including the Chinese group Baowu Steel, have pledged to achieve zero net carbon emissions by 2050. Their options to achieve this are limited: improving the recycling of existing steel , increase plant efficiency, capture emissions from stacks, or increase alternative fuel sources like biomass or green hydrogen, says Aden.
The latter shows the most promise in terms of reducing emissions, he said, but faces a few key hurdles. It requires a huge amount of electricity, on the one hand. The relative abundance of hydropower and wind power in Sweden is what made the HYBRIT plant viable, and in the first quarter of 2021, several other steelmakers from renewable energy-rich European countries announced plans to explore the plant. ‘hydrogen. But according to Enochsson, the complete elimination of steel emissions from Volvo’s global production lines would only be possible if Asia and the United States caught up with Europe on large-scale renewables.
This thirst for electricity could make green steel more expensive than conventional steel in some places where coal is cheap. A 2020 report from the Rocky Mountain Institute, a nonprofit energy think tank, found that falling solar and wind costs have already made the technology competitive in some markets, including states. United, and will likely become even more so in China as the country steps up its new carbon cap-and-trade market. But in Europe, where the cost of electricity is relatively high, green steel may not be competitive until the mid-1930s, said Flor Lucia de la Cruz, senior research analyst at energy research firm Wood. Mackenzie.
This is a problem, said de la Cruz, because global green steel production must increase by orders of magnitude in order to reach the volume of production needed for the industry as a whole to achieve net zero emissions. According to Bloomberg, only two megatons of green hydrogen are produced each year today and used in ammonia plants, oil refineries and other facilities besides steel, while 122 megatons are needed for l steel alone by 2050.
“Light a fire” under Tesla
The timing for Volvo’s announcement is right, just months away from COP26, the world climate summit in Glasgow in November, when the EU, US and other governments are expected to announce new incentives for green hydrogen. The more large steel consumers buy in, the greater the pressure on their competitors to follow suit and the faster the industry will be able to develop.
“It’s great that HYBRIT is happening, but it will take decades to have a significant impact on emissions from steel production,†says Aden. “But what it’s really going to do is start a fire under Tesla and other automakers who claim to make green vehicles.”
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