3.      Iron and steel

In primary steelmaking, the iron and steel sector uses iron ore as an input to make iron, and the latter to make steel. The primary steelmaking process involves smelting the iron ore, which requires a high amount of heat and conventionally uses emission-intensive coking coal. Steel can also be made from scrap (secondary steelmaking), which is generally very electricity-intensive.

3.1.  Activity level

In 2010, the sector produced 1,482 Mt of crude steel. In 2050, global steel production is expected to increase to 2,295 Mt, an increase of almost 55 percent. This growth will be driven mainly by an increased demand for steel in emerging economies. Demand is expected to increase partly because of its use as a building material for a growing population.

3.2.  Emission reduction potential

The iron and steel sector directly emitted 2,955 gigatons of CO2 in 2010. In 2050, emissions would need to decrease to 2,044 gigatons, a reduction of almost 31 percent. Possible technologies to reduce the amount of CO2 emitted per ton of steel are to use natural gas, hydrogen, or oil instead of coal. Also, efficiency measures can be implemented. Nearly half of the CO2 reductions in the iron and steel sector are expected to be from energy efficiency improvements. The greatest potential for efficiency increases comes from “phasing out open-hearth furnaces in countries such as Ukraine and Russia, and from blast furnace improvements in India, China, and Ukraine” (ETP 2014). In addition, CCS can be used to further reduce CO2 emissions. IEA expects the iron and steel sector to capture 812 Mt of CO2 in 2050. Emissions can be further reduced through increased secondary steelmaking, which has primarily scope 2 emissions (limited by scrap availability), in combination with electricity decarbonization.

3.3.  Carbon intensity pathway

Because of this activity growth, the sector’s emissions will increase slightly until 2020, even when the carbon intensity decreases by 10 percent compared with 2010. By 2050, the total emissions will need to decrease by 31 percent and the carbon intensity by 55 percent compared with 2010, as shown in Figure I.3.

 

Figure I.3 Iron and steel sector emissions will increase slightly because of activity growth, but the total emissions need to decrease by 31 percent and intensity by 55 percent by 2050

Source: based on IEA (2014).