The IEA has set a goal of 37% EAF globally by 2030. New additions to the steelmaking capability pipeline may convey EAF capability to 36%. Supply: GEM.
Whereas EAF-steelmaking is being introduced at “report price”, GEM finds that lower than 14 per cent of this potential capability has moved into building.
Of those who have moved into building, round 46 per cent are nonetheless BOF-based. As such, “whereas we could also be inside attain of net-zero targets primarily based on proposed electrical arc furnace capability, really attaining these objectives requires follow-through”, the report notes.
“The progress is promising for a inexperienced metal transition. By no means earlier than has this a lot lower-emissions steelmaking been within the pipeline. On the identical time, the buildout of coal-based capability is regarding. What the business wants now’s to make these clear growth plans a actuality, whereas backing away from coal-based developments.”
In addition to the buildout of recent coal-based capability being out of alignment with a net-zero future, it poses a risk of carbon lock-in and stranded belongings, GEM notes.
Blast furnaces have gotten riskier investments given the restricted choices to mitigate emissions from each the furnaces themselves and the upstream emissions from the metallurgical coal mining, it provides.
Estimating an funding of US$1-1.5 billion per mtpa capability at an built-in BF-BOF web site, GEM discovered that the long run stranded-asset danger may very well be as excessive as US$554 billion in 2023, falling to US$400 billion in 2024 because of the continued fall in BOF capability below growth.
“As we develop nearer to key decarbonisation milestones, coal-based developments get additional out of alignment with the route the business is shifting and current a larger danger of stranded belongings to steelmakers. Coal-based, emissions-intensive blast furnaces signify vital investments that always require a long time to recoup. This makes them extraordinarily dangerous for builders, notably in nations with acknowledged web zero commitments.”
Potential stranded-asset danger throughout key nations for coal-based steelmaking globally. Supply: GEM.
The restricted choices for mitigating the local weather affect of BOF-steelmaking was additionally highlighted inside a current report from the thinktank Sandbag.
Whereas carbon seize, utilisation and storage (CCUS) is commonly touted as a “catch all” resolution, its effectiveness varies extensively throughout functions, Sandbag’s “Metal & CCS/U” report finds.
For metal manufacturing, BF-BOFs with carbon seize are unlikely to be cost-competitive with EAFs, the report finds. Though given the sluggish tempo of technological and market growth, Sandbag anticipates capturing carbon will play a restricted function within the metal business.
China transitions to EAFs
India has now changed China as the highest metal developer globally, with a pipeline of 258mtpa of capability, of which 177mtpa is BOFs, in keeping with GEM.
China has a pipeline of 150mtpa that means, collectively, China and India are chargeable for 53 per cent of all developments globally.
Asia operates 68 per cent of all steelmaking capability (1,508mtpa), nearly all of which is in China (1,075mtpa), India (123mtpa) and Japan (109mtpa).
When wanting particularly at emissions-intensive BOF manufacturing, Asia’s share of complete working capability will increase to 80 per cent (1,181mtpa), of which 918mtpa is in China.
Presently, China has 157mtpa of working EAFs (22 per cent of the worldwide capability), adopted by the US, Turkey, Iran after which India.
In response to a brand new report from the Centre for Analysis on Vitality and Clear Air (CREA), China didn’t concern any new permits for coal-based steelmaking within the first half of 2024. That is the primary time this has occurred because the nation’s “twin carbon objectives” had been introduced in September 2020.
Through the first six months of 2024, Chinese language provincial governments permitted 7.1mtpa of steelmaking capability, all of which had been EAFs marking a “turning level” for the nation’s metal business, CREA notes.
Xinyi Shen, researcher at CREA and the report’s lead creator, tells Carbon Transient: :
“China’s EAF steelmaking has been growing quite slowly prior to now few a long time, primarily because of the constraint of scrap provide. Nonetheless, as China’s metal demand reaches its peak and extra scrap turns into obtainable, a serious alternative arises to scale back emissions within the subsequent 10 years. The federal government has accelerated plans to develop the nationwide ETS to incorporate the metal sector by the second half of 2024. By implementing carbon pricing on carbon-intensive merchandise, EAF steelmaking would change into extra economically aggressive and proceed the expansion.”
Regardless of India now overtaking China when it comes to introduced steelmaking capability, China stays the largest developer of EAF capability general, GEM’s report states. And whereas India has probably the most metal in growth, 84 per cent has not moved into building.
As such, there’s nonetheless a possibility for India’s plans to vary, with the proportion of BOFs to EAFs much less set.
Chris Bataille, adjunct analysis fellow on the Columbia College Middle on International Vitality Coverage and lead creator on the international Internet Zero Metal challenge tells Carbon Transient:
“India’s core demand for metal is about to extend from 125mtpa to ~450mtpa by 2050, particularly to satisfy key constructing and infrastructure wants. Our modelling suggests EAFs constantly rise from ~35 to 150mtpa by 2050. So the +250mtpa BF-BOFs is simply barely possible, however solely over ~25 years and with some exports of BF-BOF metal.
“The distinction will likely be between a world the place sturdy local weather coverage succeeds and fails. If it fails and coal-based BF-BOFs are constructed, then the +258mtpa seems barely possible. If it succeeds, India is brief on the required fuel and particularly clear electrical energy to energy this quantity of metal manufacturing. Whereas the nation does construct numerous EAFs, it builds as much as 250mtpa of fresh iron making over time, making the short-term shortfall with clear HBI iron imports.”
