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EU steel production is technology intensive and is highly innovative. The sector is facing increasing competition from non-EU countries. The industry has a strong competitive position on domestic markets, particularly in high value added products. The EU steel industry is currently producing high quality products for their downstream user. However, the EU steel industry faces the following challenges: cost and availability of raw materials and increasing stringent rules on CO2 emissions, prevention and control of pollution and waste. In order to keep the current position of the market and to face these challenges, the EU steel industry should focus on: strengthening the capacity to innovate and manage sustainable development of the sector, improving the efficiency and the use of raw materials to be competitive where there will be a growing shortage of raw materials and rising pricesinvestment in clean technologies, improving energy efficiency, reduction of CO2 emissions and energy costs.
Given the significant reductions in carbon emissions made in recent years, existing technologies have reached their limits, which is little room for further improvement to further reduce these emissions. An increased effort in research and development is necessary for the development of new environmental technologies to produce steel. Complete research is conducted within the Steel Technology Platform (ESTEP). ULCOS program (Ultra Low CO2 steelmaking) is the most ambitious global steel industry in order to develop innovative technologies to reduce carbon emissions by 50% in the long run. Innovative products and their applications in steel significantly contributes to saving energy and reducing CO2 emissions. European steel industry is developing and producing modern materials such as Advanced High-Strength steel, which is essential to reduce the weight of cars and trucks. Innovative steel products also play an important role in improving efficiency in energy production and renewable energy development.
The total steel production was approximately 1,5 billion tones in 2011. The World Steel Association expects that production levels to exceed 2,6 billion tones by 2050 in order to meet the growing demand for steel in the world.
Iron and steel have been identified as major energy consumers in the industrial sector and have been recognised as having substantial savings potential. The European steel industry succeeds to make great improvements over the last 10 years in energy reduction and dematerializing and the current technologies seems to reach their limits here.
Still, the main concerns about steel industry are energy consumption, recycling and demand for new technologies that can reduce the CO2 emissions.
2. PREMISES THAT LEAD TO A BETTER
USE OF RESOURCES
The resources used in the steel industry are, except large amounts of coal consumed for the production of steel, electricity and natural gas that are consumed by steel mills. The energy input of an integrated steel production facility comes for about 83% from coal, approximately 10% from electricity and 7% other (ESTEP, 2009).
The energy consumed in the blast furnace accounts for up to 75% of the energy content of the coal, which is used in the form of coke to reduce chemical and fuel support burden oven. Other significant areas of energy use are the sinter and coking plants and downstream process stages. (World Steel Association, 2008).
Primary steel is produced by reducing iron ore to iron and iron in steel processing and accounts for approximately 75% of world steel output. Energy requirements for primary steel production varies from 19.8 GJ / tonne to 41.6 GJ / tonne. The exact figure depends on the steel products and technology. The energy intensity values for the main primary production routes can be found in Table 1.
Table 1. The energy intensity averages for the
BF-BOF/Basic Oxigen Furnace
19.8 - 31.2 GJ/tonne
BF-OHF/Open Hearth Furnace
19.8 - 31.2 GJ/tonne
DRI-EAF/Direct Reduction Iron
19.8 - 31.2 GJ/tonne
EAF/Electric Arc Furnace
19.8 - 31.2 GJ/tonne
Secondary steel accounts for about 25% of world production (45% of the production in Europe) and is produced by recycling steel in an electrical arc furnace (EAF). This production route reduces the energy-intensity to 9.1 - 12.5 GJ/tonne. However, because of the durability and long life of steel there is not enough recycled steel to meet future demand using only the secondary steelmaking method.
Fig.1 Steel production methods share
Source: World Steel Association, 2008
As energy constitutes a large portion of the production costs of steel (20-40%), manufacturers have strived to improve efficiency of the production process., some theoretical aspects of this can be find in Lean Sigma Methodology (A.Mital, 2010). Consumption of reducing agents has been drastically reduced in the past decades. In this way, the most efficient steelmaking processes have optimised energy use by enhancing control of each step of the production chain. Improvements that have been made are for example the development of new sensors for measuring bulk properties, modelling processes and increasing the productivity of the industrial tools. Additionally, fully reusing waste gases from the blast furnace, coke oven and basic oxygen furnace (BOF) reduced the need for additional fossil fuel resources. They are used as a direct fuel substitute or for the internal generation of electricity and typically contribute 40% to total energy. These process improvements and the increase of recycling have led to a reduction of about 50% in energy and 60% in CO2 required to produce a tonne of crude steel over the past 40 years (ESTEP, 2009).
Besides increasing efficiency, steel products have offered savings over the life cycle of the end products. For example, Advanced High Strength Steels (AHSS) reduce the amount of steel used in cars making them 9% lighter, which leads to a reduction in fuel consumption and greenhouse gas emissions. Application of zinc coating will protect steel framing of buildings or bridges from corrosion and can increase the life expectancy to 377 years.
The most efficient steel mill in Europe operates now close to its physical limits regarding the energy consumption and improvement margins for energy savings are therefore only 10-15% - if we are considering that the best performers would not improve their energy efficiency. On the other hand, applying Intelligent Manufacturing will optimize all the improvements made in different parts of the supply chain. Intelligent Manufacturing consists of integrated control of the global supply chain supported by IT systems and with the addition of intelligence provided by modelling, diagnostic tools, artificial intelligence and expert knowledge.
This concept can still improve quality, just in time delivery, production levels and increase savings in energy and raw materials by looking at the whole supply chain and integrating all the improvements made by different individuals in different departments. Medium-term energy efficiency improvements can also be achieved through technology transfer to less efficient steel plants. Additionally, with the existing technologies energy savings can be increased through better recovery of waste heat, including low temperature heat and heat recovery outside the plant. An example is off-heat capture, which could be used in district heating grids.
However, to achieve major changes in the way steel is made in the long term, breakthrough technologies are needed. Therefore, the European Steel Industry has created the Ultra Low CO2 Steelmaking (ULCOS) consortium, bringing together 48 organisations from 15 countries to develop innovative technologies which will potentially reduce CO2 emissions. In the first phase research has led to 80 potential technologies. In February 2008 the four best technologies have been selected to be transformed into a full-scale industrial model in the demonstration phase. The most promising technology is the Top Gas Recycling Blast Furnace (TGR-BF) with Carbon Capture and Storage (CCS). The other proposed technologies are Hisarna smelter technology with CCS, ULCORED with CCS and Alkaline Electrolysis. All of these technologies reduce or eliminate the use of coal in the production process and have the potential of reducing CO2 emissions by 50%. The financing of the programme comes for 60% from the partners; the Research Fund Coal Steel contributes the remaining 40%. In the first phase € 80 million has been invested in the research. The expected costs of the demonstration phase are € 700 - 800 million.
3. CONSIDERATION REGARDING NATURAL RESOURCES UTILIZATION AND WASTE IMPACT
Raw materials used for the production of primary steel are iron ore, limestone and steel scrap, which are widely available in natural resources. Material that serves as an input for the steelmaking process, but do not form part of the end product is coal. The coal is cooked, resulting coke, the primary reducing agent of iron ore. World reserves in coking coal are estimated to last for 100 years (World Steel Association, 2008). Raw materials used for the production of secondary steel are recycled steels and/or direct reduced iron (DRI) and electricity.
Fig.3 Simplified steel making process mass and energy balance diagram
Source: American Iron and Steel Institute, 2005
In order to improve the natural resource efficiency, the steel industry aims at substituting the use of at-risk materials or those that have a major environmental impact. To reduce CO2 emissions and air pollution fossil-fuel based reducing agents need to be replaced by renewable sources, such as biomass. Research of the ULCOS programme found a potential replacement of coal in charcoal, as it is highly reactive, but is low in impurities such as sulphur (SOx), Nitrogen (NOx) and ash. Further investigation has focused on the supply and sustainable use of biomass and the process of converting biomass into charcoal. At the moment the work has started to optimise the charcoal production in line with the steel industries requirements. NOx emissions can also be reduced by using advanced burners or exhaust gas treatment facilities, to decrease SOx emissions the steel plant can use desulfurisers.
Another example is the uses of bio-based materials witch assure that much CO2 stays in the product itself instead of being released into the atmosphere. If the materials will be composted or digested after the product life, this would have a beneficial effect on the natural resources. The natural resource efficiency can be obtained by using alternative materials to replace materials that have a high risk in supply shortage.
Because of the high temperatures needed for steel production, water is mostly used for non-contact cooling of the product. The use causes no deterioration in quality and the water can be redirected to the watercourses. In some cases salt water is used for cooling purposes. Water used for cleaning and rinsing is often treated and used again.
Steel is 100% recyclable product - it can be recycled over and over again without loss of properties. All the steel in collected end-of-life products is recycled, irrespective of the percentage of steel in the products. Steel therefore contributes significantly to the long-term conservation of fundamental resources for future generations. About 45% of total EU steel production is recycled steel scrap (EUROFER, 2011). In the production process recycled steel requires about a third of the amount of energy needed to produce steel from iron ore, due to the chemical energy required to reduce iron ore to iron using reducing agents. In 2006 459 million metric tons (mmt) of steel was recycled worldwide.
In Europe 90% of used products are recycled as scrap in the electrical arc furnace to produce new steel (ESTEP, 2009). However, due to the immense growth of steel consumption and the long life of steel products (an average of 40 years), a more realistic share of recycled scrap going into the steel production is around 45%. If, in theory, the production of steel would stagnate, it would take 40 years to reach a share of 90%. Taking into account the economic growth in emerging economies as well as the population growth, the ideal of producing steel mainly from recycled material is unrealistic.
Against the background of increasing competition for material resources and resource scarcity within Europe, the share and efficiency of recycling will become even more important to European steel companies in order to stay competitive. However, with the current recycling rate there is not much room for improvement. Recycled steel is collected from production waste in steel facilities and foundries (home scrap), downstream production processes (industrial scrap) and from discarded products (obsolete scrap). Steel recovery rates are about 90% for machinery, 85% for automotive and construction and 50% for electrical and domestic appliances. Initiatives for small improvements are for example the recycling of tires in steel plants and the increase of recycling of electrical and domestic appliances.
The most important by-product of steel production is slag. It can be used in cement production, road construction, as fertilizer and in coastal marine blocks to facilitate coral growth. Other by-products are gases produced in the steelmaking process. These gases are fully reused as energy for the furnace or the power generation plant.
4. NEW MEASURES FOR A BETTER UTILIZATION OF RESOURCES
Looking at the life cycle of steel one can see a closed-loop system. The industry recycles around 90% of steel, in some countries up to 98%, to reduce energy and material costs and reduce the impact on the environment. Life cycle assessment is seen as an appropriate tool for the industry for assessing environmental impact and selecting new technologies (Iosif and all 2009).
Fig. 2. Steel Production Eco-Cycle
Because emerging countries play an important role in steel production and show a growing demand for steel it might be of interest to compare practices in the life cycle of steel in the European Union with those in China, India and the United States.
What is striking about the comparison between the countries is that only 8% of total production in China comes from steel scrap, while Europe and the United States produce respectively 45% and 33% from steel scrap. One explanation for this can be the enormous growth in steel demand in the past years and the relative small availability of scrap due to the long life of steel products.
Compared to steel plants in emerging economies like China, India and the Soviet Union, European steel plants have higher costs and deal with stricter regulations regarding climate change. European organisations understand that investment in breakthrough technology is needed to stay competitive in the market. ULCOS is the largest and most important research and development programme in the steel industry which has a focus on breakthrough technologies that will reduce CO2 emission 50%. Most research programmes in Asia and the United States are less ambitious, but are exploring some of the same technologies to achieve CO2 reduction. However, the FINEX iron making process is currently seen as one of the state-of-the-art processes that reduces greenhouse gas emissions.
The comparison above shows that European steel plants are ahead of their Asian and US competitors when it comes to recycling and technologies that reduce CO2 emissions and increase energy efficiency. However, it is important that Europe will continue to invest in research and development for breakthrough technologies to stay ahead of competitors.
5. ACTUAL BARRIERS AGAINST A BETTER UTILIZATION OF RESOURCES
The most important technical barrier for the steel industry is that with the current technology there is little room for improvement in energy savings and CO2 reduction as during the process a large amount of coal is used in the form of coke. The breakthrough technologies that for example the ULCOS programme is working on are based on a different steelmaking process. Therefore, to develop and test these technologies in a full-scale plant a large financial investment is required. Moreover, implementing one of these new technologies in existing steel plants will radically change the plant. The coke plant will become partly or entirely redundant and large financial investments will be needed to build a new furnace or implement other new technologies in the production process. This will also require large investment from the existing steel plants. To ensure that the steel plants are willing to make these investments the new technology has to save costs in the long term.
Today, the EU steel sector is a modern industry with its main customer base found within the EU home markets, particularly in high-end segments. The main competitive streigh is based on high quality products, product invovation and technological development, efficiency, and skilled manpower.
The steel industry is performing well considering resource efficiency. Efficiency is achieved in energy consumption, recycling and the use of waste material, decreasing levels of CO2.
Concluding, the EU steel industry is facing the following challenges: the costs and availability of raw materials and the increasing strict regulations concerning CO2 emissions, pollution prevention and control, and waste. In order to maintain the current market position and to face these challenges, the EU steel industry needs to focus on: reinforcing the capacity to innovate and manage the sustainability of the sector, improving the efficiency and use of raw materials in order to be competitive if there will be an increasing raw materials shortages and rising prices, investments in clean technologies, improving energy efficiency, reducing CO2 emissions and energy costs.