The UK stands on the verge of a green industrial revolution, in which the steel supply chain will play a vital role.
Every major economy is investing in the future of its steel industry and placing it at the centre of its net zero strategy (e.g. the €700M EU investment in its clean steel partnership). This is essential in the UK as it is facing three simultaneous crises: consumption-based emissions, waste and energy.
These necessitate a re-think of our approach to support our society via a transition towards a circular economy without waste, but with energy efficient processes manufacturing a new future.
Beyond the UK, every major economy is racing to re-engineer the way to deliver prosperity for its citizens in the context of energy and goods supply chains destabilised by conflict and the pandemic. Hence, even if the climate crisis imperative were to be ignored (which it cannot), the sheer competition for materials and independent energy sources will continue to drive change.
So, if this is inevitable and has already started, what is the role of steel in this new normal and why should responsibility for it sit in the UK?
The UK is disproportionately rich in valuable resources
Electric Arc Furnaces (EAF) fed by scrap and powered by green electricity provide the easiest route to decarbonise steelmaking, though with significant challenges surrounding residual elements for some products, investigated in SUSTAIN.
Nevertheless, all steel decarbonisation roadmaps (e.g. EUROFER) predict continued production from iron ore, predominantly via the blast furnace with CCUS. This is driven by a ~1Bn tonne shortfall that will exist between the global utilisation of steel (2.5Bn tonnes) and global scrap availability (1.3Bn tonnes) by 2050. All of the current global scrap resource is actually in use (and always will be), though inefficiently down-cycled. This, combined with comparative immaturity / higher cost of decarbonised iron production will cause the price of steel to continue to rise until the UK Steel Industry net zero target of 2050, driven by energy, raw material and an uncertain balance in supply and demand.
Estimates suggest a ~$500/T uplift based on conversion to H2 reduction alone. In response, the forecast developed economies of 2050 with the most scrap have already responded with export controls, marking it as a critical raw material. In contrast, the UK currently exports 8Mt of its 10Mt arising scrap every year against a utilisation of 10Mt of raw steel and 16Mt in total (including steel embodied in imported goods). This is an unusually large medium-term risk and long-term opportunity for the future UK economy compared to many other countries. These megatonnes will also provide economies of scale for the other precious materials that exist in them at (currently) uneconomically low concentrations, despite them being critical for the UK’s energy and technology security.
Steel intensive products will improve your quality of life
Whether it be an electric motor dependent on high quality electrical steel cores, a wind turbine, the next generation of rail infrastructure or a home that generates, stores and releases its own energy, steel intensive and dependent products are already transforming our way of life and will continue to do so.
However, net-zero technologies require increased steel intensity in many cases.
Consider steel intensive modular construction as just one example. Our partner project, SPECIFIC® IKC is already producing demonstrator buildings utilising steel intensive off-site construction that integrates green technologies with the material. These are complemented by a number of social housing projects, which aim to provide greatly reduced energy costs and a lower carbon footprint to their inhabitants.
Current UK Government figures estimate that 3.18 million households are in fuel poverty (pre-Ukrainian war), so the potential for steel to improve the UK quality of life is irrefutable.
Steel as a service
Beyond providing a decarbonisation vector for their customers via steel’s net-zero CO2 footprint and the product functions illustrated above, steelmakers will play a key role in the future circular economy.
Steel is already the most recycled human-made material on earth. Recycling is the widest, most energy intensive vector of the circular economy with significant opportunities to reduce the carbon footprint of materials through remanufacture, re-use and maintenance.
Delivering the transformation requires specialist materials knowledge as it travels through these routes which is held primarily by the steelmakers (material custodians in the circular economy).
The key enablers of this transformation are digital technologies. Smart sensors and computer models in steelmaking will soon provide far more detailed information on steel products. This can be digitally attached to the materials through supply chains using blockchain technology (incorruptible digital ledgers / materials passports) providing user confidence in its re-use or remanufacture and enabling steel servitization. Hence the implementation of decarbonised circular supply chains depends on the maturity of these digital technologies.
Such digitally driven approaches are being trialled within SUSTAIN in the DSIH (Digital Steel Innovation Hub) enabled by sensor technologies. Our industrial partners are already investigating several exemplars at large-scale including rail infrastructure and construction products.
Spotlight on Carbon
Steel is by definition an alloy of iron and carbon, thus some form of carbon will always be required; plus carbon has a key role in steel processing as a reductant or reagent (including EAF and use of H2 DRI).
There is potential for “rapid” (5-10 year) commercialisation of alternative carbon sources that include polymer, paper and biomass substitutions derived from agricultural and societal waste streams producing net energy benefits of 46 GJ/t over polymer recycling.
These transitions have been achieved before with Government subsidies. The speed of adoption will be driven by political and economic factors (carbon price, waste classification policies etc). However, at present there is not a clear reward for investment in the utilisation of alternative carbon sources in the UK. By contrast, Japan has invested billions in the utilisation of alternatives from societal waste streams for steelmaking providing significant advantage in commercial readiness.
SUSTAIN’s activities are directly addressing this by assessing the suitability of using alternative carbon sources to solve a key challenge for society as a whole, not just the steel industry.
What if steel doesn’t decarbonise in the UK?
The consequences for the steel sector would be existential. This is broadly recognised and most producers are prepared to invest if suitable certainty can be gained on the future policy landscape.
Perhaps the question could and should be re-directed to ask, what would be the consequences for the UK manufacturing sector, or in fact the UK population and wider society if it were to no longer have a domestic supply of steel?
Given the inevitable inflationary pressures on materials supply chain prices through decarbonisation and reduced geopolitical security, failure to secure domestic supply of key materials in general, and steel in particular, will be viewed in the future as equivalent to existing issues with domestic gas storage and production.
To learn more about his work, you can read Professor Cameron Pleydell-Pearce’s profile on the Swansea University website, and you can find out more about the SUSTAIN programme by visiting their website: www.sustainsteel.ac.uk