Warp into the future of steelmaking
Green steel is steel produced in a way that cuts carbon emissions from the process. Traditional steelmaking is one of the world’s dirtiest industries — it’s known as a “hard-to-abate” industry which also includes cement and petrochemicals. Altogether, these industries are responsible for roughly 20% of global carbon emissions, and traditional steelmaking itself contributes to 8% of global CO2 emissions.
Now, companies around the world, including Sweden’s H2 Green Steel are finding alternatives in the steelmaking process to cut down CO2 emissions. H2 Green Steel recently raised $1.6 billion to build a large-scale green steel mill in Boden, Sweden, the first of its kind. Its plan is to reduce carbon emissions by 95% per ton of steel produced. And H2 Green Steel isn’t the only company working on figuring all this out.
Think green steel sounds like a pipe dream? We’ll tell you just how real it could be.
Brief history
13th century BCE: The earliest signs of steel production occurs in what is now Turkey.
3rd century CE: China is the first mass producer of high-quality steel.
1855: Introduction of the Bessemer process, which was the first inexpensive way to produce steel at a large scale.
1913: Stainless steel is invented.
October 2020: Big River Steel in Arkansas, which has produced millions of tons of low-carbon, high-strength steel for years, is acquired by U.S. Steel.
August 2021: Swedish steel manufacturer SSAB produces and delivers the world’s first fossil-free steel — made of sponge iron reduced using hydrogen — to Volvo for use in its trucks.
May 2023: Chinese steelmaker HBIS Group says it successfully and continuously produced direct reduced iron (DRI) steel from its hydrogen metallurgy project.
The reality of green steelmaking
H2 Green Steel, a Swedish company building a green steelmaking factory in Boden, Sweden, plans to reduce carbon emissions by 95% per ton of steel produced. The steelmaking process currently emits about 1.85 metric tons of CO2 per ton of steel produced, and H2 Green Steel plans to reduce that down to below 100 kilos of carbon emitted.
In the traditional steelmaking process, iron ore is mined from the ground. It needs to be reduced to iron oxide, so it’s heated with coal or coke in a blast furnace to separate the iron from the oxide. The carbon monoxide in the coal takes out the oxygen and becomes CO2. That’s one source of carbon leakage in the steelmaking process. Another source of carbon emissions is from the steel mill where a lot of heating then cooling down takes place to create different characteristics of the steel, such as its strength, flexibility, and how well it resists rust. So steel produced for an electric engine will have a different composition from steel produced for a front car part or steel produced for a railroad.
Both steps are really energy intensive and involve heating fossil fuels which release CO2.
As an alternative to the traditional blast furnaces, H2 Green Steel uses a process called DRI, which stands for direct reduction of iron. It operates at a lower temperature and usually runs on natural gas, but it can also run on hydrogen. Iron ore is reduced with hydrogen instead of coal, so you get hydrogen oxide which is another name for water.
One of the downsides of replacing coal with hydrogen is higher steel prices by about a third, according to the European Parliament. However, it expects that price gap to narrow in the coming years and by 2030, it could even disappear.
Another possible drawback: producing the necessary amount of hydrogen for the transition. It would require an increase in electricity, which in some cases is used to produce hydrogen, so that requires even more investment into producing renewables. So, companies would need to get on board.
In the grand scheme of things, when you have global steel production currently at 2 billion tons and demand expected to rise over the next few years, H2 Green Steel’s projected 5 million metric tons per year is still only 5% to 6% of Europe’s demand — and just a blip in the global demand.
Listen up
Gabriela Riccardi, host of the Quartz Obsession podcast, was hoping green steel looks something like Super Mario Bros. pipes, but Quartz’s Britney Nguyen had to let her down gently.
Check out the season 7, episode 4 — Green steel: Structural change — in which Britney and Gabby go deeper into what it will take for green steel to catch on.
🎧 Listen now on Spotify | Apple | Pandora
👓 Or, read the transcript
Quotable
“We can reduce our travel, we can reduce our consumption, we can change the way we eat. There’s a lot of things we can change behavior-wise, but we cannot stop building bridges, we cannot stop building houses, we cannot stop building vehicles that transport the food, we cannot stop building machines, we cannot stop all these things.” — Olof Hernell, chief digital officer at H2 Green Steel.
Pop quiz
Which country produces the most steel?
A. U.S.
B. China
C. Germany
D. Brazil
We’ll produce the right answer for you at the bottom of this email.
By the digits
$1.7 billion: Approximate value of the global iron and steel market in 2022
2 billion metric tons: Amount of steel produced globally in 2022
1.85 metric tons: Amount of CO2 emitted on average when producing 1 ton of steel through the traditional steelmaking process
1.8 gigatons: CO2 emissions emitted from the global annual production of steel in 2018
5 million metric tons: Amount of green steel H2 Green Steel wants to eventually be able to produce per year, but it still only makes up…
5% to 6%: of Europe’s demand
Poll
Let’s say we solve steelmaking. What other famously dirty process would you solve next?
- Air travel — I would like to go places without guilt
- Fashion — I would like to look good without guilt
- EV chargers — I’ll get the car, but put the dang chargers all around, please!
Tell us what you’d change. The human race may be counting on you.
💬 let’s talk!
In last week’s poll on VR headsets, we asked if, given $3,500, you’d buy an Apple Vision Pro or a cheaper alternative. The overwhelming majority of you chose none of the above. That’s OK — as we said in our email and podcast episode, the emerging use cases for VR headsets are really in workplaces, anyway!
🤔 What did you think of today’s email?
💡 What should we obsess over next?
Today’s email was written by Britney Nguyen (favorite steel item is a high-speed train) and edited by Susan Howson (is editing her last Obsession, and was proud it was Britney’s first).
The answer to the quiz is B. China. China is the largest steel producer in the world. In 2021, the country produced around 1.03 million metric tons of steel in 2021, according to the World Population Review.