How new clean-energy tech can help eliminate steel-industry emissions

Replacing gas- and diesel-guzzling ICE vehicles with EVs has been touted as key to combating the climate crisis.

EVs eliminate tailpipe emissions, but the process of making them isn’t exactly squeaky clean. A vehicle, whether ICE or EV, emits about a third of its lifetime carbon pollution before it ever hits the road, according to Public Citizen, a progressive consumer rights advocacy nonprofit.

But there are burgeoning efforts to tackle one of the dirtiest aspects of auto manufacturing and heavy industry in general: steelmaking.

Traditional steelmaking accounts for about 7% of carbon emissions globally, according to Morgan Stanley; steel industry emissions must be halved by 2050, the International Energy Agency estimates, in order to meet climate goals like limiting warming to no more than 1.5 degrees Celsius.

Emerging technologies that promise to drastically reduce emissions from steel manufacturing will play an important role. And experts say the auto industry, a huge consumer of emissions-heavy primary steel, will be key to driving demand for “green steel,” or steel that’s produced without fossil fuels.

“We need automakers to be making more EVs and we need the infrastructure to support EVs and we need people to buy EVs,” said Carly Oboth, senior supply-chain campaigner for the climate program at Public Citizen, which is advocating for green-steel adoption by the auto industry. “But we also need to think about the materials that cars are made with.”

Cleaning up steel production

Let’s brush up on some steelmaking basics.

Steel is made from iron ore that is processed largely in coal-burning blast furnaces.

This process is the main culprit behind the approximately 3.6 billion metric tons of carbon dioxide that, according to the World Steel Association, steelmaking produces annually. In the US today, there are eight integrated steel mills—the facilities that use this process—in operation.

The primary pathways to emissions-free steel involve using renewable hydrogen or electricity to produce what’s known as direct reduced iron, or DRI.

Using renewable energy sources to process DRI can virtually eliminate emissions from the process, but the problem is that low-carbon hydrogen is in short supply; none of the DRI plants in the US use green hydrogen today.

“This type of plant runs on natural gas today,” Kaitlyn Ramirez, a senior associate on clean-energy think tank RMI’s industries team focused on hydrogen and steel, told Tech Brew.

“There’s an opportunity for these DRI plants and this technology…to instead use clean hydrogen as the fuel and the reductant for that process and be able to produce green iron or green steel,” she added. “That’s the main pathway that we’re seeing in the near term that’s going to allow for large, commercial-scale, near-zero-emissions steel production.”

Emerging efforts

In March, the Department of Energy announced an investment worth as much as $1 billion to support green-steel projects in Mississippi and Ohio that will be the first of their kind in the US.

The Ohio project involves transitioning a blast-furnace facility to a hydrogen-powered DRI plant.

The Mississippi facility, operated by Swedish steelmaker SSAB, will produce DRI with green hydrogen. The DRI will then be sent to SSAB’s electric arc furnace in Iowa.

SSAB is a partner in a pilot plant in Sweden—just one of several green-steel projects in development in Europe.

The plant is part of an initiative from SSAB, LKAB, and Vattenfall called Hybrit (hydrogen breakthrough ironmaking technology), and it uses a process that starts by splitting water into hydrogen and oxygen molecules. The hydrogen, SSAB explains, is used to remove oxygen in the iron ore. The byproduct of this process is water, which is then reintroduced into the process to produce hydrogen.

“This creates a natural, closed cycle,” according to SSAB. “No polluted water is being discharged, no carbon dioxide is emitted, and the coal stays in the ground where it belongs.”

The pilot plant delivered the world’s first green steel produced without coal in 2021. Hybrit plans to open a demonstration plant capable of producing 1.3 million metric tons of green steel annually by 2026, according to Canary Media.

Another Swedish company, H2 Green Steel, has offtake agreements with major automotive customers including Porsche and ZF Group. Its operations will include a DRI facility where hydrogen will react with iron ore to create iron that can be used to make steel in a process that lowers emissions by as much as 95%, the BBC reported, with electricity coming from local renewable energy sources.

Stateside, Bill Gates-backed startup Electra recently announced it’s capable of producing “emissions-free iron without melting ore on commercial-sized prototypes,” Bloomberg reported. And MIT spinoff Boston Metal is working to commercialize a technology that uses electricity to separate iron from ore without releasing any carbon emissions.

To help boost demand signals, RMI last year convened a Sustainable Steel Buyers Platform, a tool that allows corporations to jointly purchase near-zero-emissions steel in North America. Members—which include Microsoft and real estate developer Trammell Crow Company—aim to collectively request up to 2 million tons of green steel.

“Hopefully with continued push from buyers that are ambitious and looking to meet their climate goals,” Ramirez said, “we can get producers and more green-steel plants online.”

Clean energy needed

RMI estimates that there is enough demand to support at least three US green-steel plants by 2030.

“Since not one ton of US steel currently produced is near-zero emissions,” RMI analysts wrote in a 2023 report, “American steelmakers are at a critical investment juncture: build near-zero-emissions steel plants now or miss the boat by forcing US companies to import to meet their near-zero-emissions steel needs.”

The biggest barriers to adoption, however, are on the supply side, with no green-steel production yet online in the US and inadequate supplies of renewable energy to power the plants that will be needed. For example, last year, just 20% of electricity in the US came from renewables.

“Getting the supply in the ground and produced is the critical thing that’s going to be needed…to supply green steel to buyers that are already demanding it,” Ramirez said.

“The remaining pieces to sort out would be on the permitting side of things and making sure there is access to this large clean electricity and clean hydrogen supply…That’s going to be the critical piece of it, given the scale of what’s going to be needed to run these facilities.”