Making steel was responsible for about 7% of global greenhouse gas emissions by 2020. That’s because steelmakers in countries like China, Japan and South Korea have long relied on fossil fuels like coal to make steel in blast furnaces.
But change is coming as the world works to go low carbon. Researchers and steel producers are exploring new ways to make steel without using coal.
If the transition to green steel accelerates, Australia may lag behind. That’s because while we are the world’s largest exporter of iron ore, some of the new techniques rely on higher purity ore than we currently export. Coal exporters could also lose revenue as with current technology we are the largest exporter of the coking coal burned in furnaces.
To avoid this, we need to plan for a green steel future. Us recent report on opportunities for Australian industry to go low carbon suggests that it is possible. Australia can make the switch to green steel and remain a major global player.
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Why would Australia be affected by a shift to green steel?
Emerging steel production technologies are well on their way to development. Sweden produced the the first load made of steel without coal in 2021.
This steel is made using a direct reduced iron electric arc furnace process, which can be powered with renewable energy and green hydrogen. While the pilot projects are promising, it may take until the end of 2030 for this technology to become widely available.
Australian industry energy transition initiative, Author provided
The problem for Australia is that this approach requires very pure ore. Right now, most of our iron ore exports would simply not be compatible because there are too many impurities.
Read more: ‘Green steel’ hailed as the next big thing in Australian industry. This is what the hype is about
Australia exports two main types of iron ore: hematite and magnetite.
Hematite is mined in Pilbara in Western Australia. It is a higher quality natural ore (56-62% iron) and makes it well almost all (96%) of our exports.
Magnetite is a lower quality ore (25-40% iron) that requires additional processing. However, this processing produces ore with more iron, fewer impurities, and less waste rock (known as gangue) than hematite.
It is also, as the name suggests, magnetic. This makes it possible to efficiently separate iron from waste rock using magnets.
Why is this important? Because this processing converts lower grade iron ore into a product compatible with direct reduced iron electric arc furnace technology.
You may be wondering why it’s important to get rid of waste rock. Doesn’t it disappear in the oven? In a traditional blast furnace this is true. But in the direct reduction process, the iron ore does not actually melt. And the next step – the electric arc furnace – cannot handle too many contaminants.
Australian industry energy transition initiative, Author provided
Hematite or magnetite?
This presents us with a dilemma.
Our main iron ore exporter, hematite, will not be able to provide green steel producers with any of the leading technologies. But our much smaller ore type, magnetite, could.
If we develop new methods to process hematite so that it can be used in green steel production, we can keep current mines open and preserve existing markets. But it would take a lot of research and development to make commercially viable methods possible.
The other option is to accelerate the extraction of magnetite, as the processing of this type of ore is well understood.
Some Australian miners are already going down this path. The iron bridge of Fortescue magnetite project in the Pilbara is scheduled to begin production this quarter.
Magnetite is also recognized as an opportunity in South Australia as it makes up 90% of the state’s ore body. The state government has set a target of 50 million tons per year by 2030.
To ensure that extensive mining of magnetite is sustainable, we need strong benchmarks to mitigate emissions and wider environmental impacts from new mining facilities.
That’s because the actual mining of iron ore is an emissions-intensive industry as it relies on heavy machinery. But our models show that there are opportunities to make progress here too, with electrification and fuel switching.
flickr, CC DOOR
Are other green steel techniques better suited for Pilbara ore?
The direct reduction method pioneered in Sweden is not the only way to clean up steel production.
We looked at a range of potential low-emission steelmaking techniques, some of which could make use of Australia’s existing hematite exports.
Australian steel producer Bluescope and multinational miner Rio Tinto are investigating another method, using direct reduction to get rid of oxygen, melting the ore to remove impurities, and then using a simple oxygen furnace to make steel. This will allow them to continue using Pilbara hematite ore.
Other emerging steelmaking techniques such as electrolytic steel productionshould also be developed to ensure that there are sufficient options for the use of hematite in zero-emission steel production in the future.
Fortescue Future Industries recently announced that they have succeeded in producing zero carbon iron using an electrolyser and a membrane, but have not provided details of the process so far.
It is difficult to give concrete timelines for these changes, as a transformation on this scale requires a coordinated effort. Each of these technologies requires significant investment and a massive build-up of reliable, cost-competitive renewable energy and green hydrogen production.
Planning and action is needed now
As you can imagine, steel-producing companies plan to make their factories last for decades. This time frame means that decisions made now will affect emissions in the future.
It is vital that Australia is prepared for the shift to green steel. We need a national strategy to future-proof iron ore production, and roadmaps for the iron and steel supply chain to align suppliers, finance, consumers and decision makers as they work to move fossil fuels out of industries.
Read more: Red dirt, yellow sun, green steel: how Australia could benefit from a global shift to zero-emission steel
