Steel is one of the most commonly manufactured materials in the world, because it has such a wide variety of uses – steel is everywhere, from construction to vehicles, home goods to robotics.
Steel production is also hugely carbon intensive, representing a significant proportion of global man-made carbon emissions. In the universal quest for Net Zero and carbon neutral, green steel production is critical. The entire value chain of many other ‘green’ products, like electric vehicles (EVs), hinges on the ability to ensure all components are carbon neutral.
South Africa is well positioned to be a world leader in this space, as we have the natural resources and the capability, but production needs to be ramped up and government should lead the way in driving this change.
Massive carbon intensity
The carbon footprint of steel is huge, and emissions can vary depending on the method of production that is used, as well as the proportion of scrap steel versus virgin steel used in the production process.
Blast furnaces, for example, produce significantly more emissions than, for example, an electric arc furnace, which also utilises far more scrap steel. Yet blast furnaces are by far the most common method of steel production around the world.
According to the World Steel Association, every tonne of steel produced in 2020, on average, created almost 2 tonnes of CO2 emissions. In that year, 1,860 million tonnes of steel were produced, resulting in direct emissions from the steel sector of around 2.6 billion tonnes of CO2, which was between 7% and 9% of global CO2 emissions.
What can be done?
The demand for steel has not abated, and is more than likely to increase in future, which means that it is of the utmost importance that the carbon footprint of steel be reduced in line with net zero emissions targets.
Prioritising the move toward the green steel manufacturing process will significantly reduce global carbon emissions.
Manufacturing green steel requires the use of electricity, generated using renewable sources rather than fossil fuels, which drastically reduces the greenhouse gas emissions in the process. It is also possible to then offset the emissions that are created, moving the steel manufacturing process toward net zero.
A significant opportunity
South Africa is one of the world’s top producers of iron ore, which is the base material of steel. We are also rich in renewable energy resources, including solar and wind power. These factors together mean that as a country we are uniquely positioned to become a leader in the green steel transition.
While there have been some steps taken in the Saldana region, we need to up the pace of change, especially if we are to ramp up production of electric vehicles. The entire greening value chain starts with green steel. To do this, green steel production needs to be further incentivised through all of South Africa’s Special Economic Zones (SEZs).
Partnerships with government and the Department of Trade and Industry are vital to drive this. In addition, innovative ways of using excess carbon credits should be implemented, 
including tax incentives and carbon credit markets where the sale of these credits could be used to fund further investment.
If South Africa can move toward hydrogen-based and electric arc furnace manufacturing, powered 100% by renewable energy, we will not only reduce emissions significantly, but grid energy will be freed up for other applications, and our reliance on imported steel will be reduced. This all forms part of the circular economy, which is vital for growth and greater inclusivity, in turn essential in the Just Transition.
Viren Sookhun | Managing Director | Oxyon | mail me |
Related FAQs: Green steel production
Q: What is green steel production?
A: Green steel production refers to the manufacturing of steel using processes that significantly reduce carbon emissions, often through the use of green hydrogen and renewable energy sources, rather than traditional methods that rely on fossil fuels.
Q: How does hydrogen play a role in green steel production?
A: Hydrogen, specifically green hydrogen produced from renewable energy, is used as a reducing agent in steelmaking, replacing carbon-intensive materials such as coal and natural gas, which facilitates a transition to green steel.
Q: What is the significance of green hydrogen?
A: Green hydrogen is crucial as it provides a sustainable alternative to traditional fossil fuels, enabling the steel industry to reduce its carbon footprint and move towards more environmentally friendly production methods.
Q: What are the challenges in the transition phase to green steel?
A: The transition phase to green steel involves challenges such as high production costs, the need for new infrastructure, technological advancements in hydrogen utilisation and the development of carbon capture solutions to manage emissions effectively.
Q: What is the expected timeline for achieving carbon neutrality in the steel industry?
A: The steel industry aims to achieve significant emissions reductions by 2030 and strives for carbon neutrality by 2050, with green steel production being a key component of this timeline.
Q: How does the production of green steel impact global steel demand?
A: The production of green steel is expected to meet the growing demand for sustainable products in the global steel industry, as consumers and industries increasingly prioritise environmentally friendly practices.
Q: What technologies are being implemented to produce green steel?
A: Technologies such as Direct Reduced Iron (DRI) production using green hydrogen, Carbon Capture and Storage (CCS) and the use of green electricity in steel plants are being implemented to facilitate the transition to green steel.
Q: How can existing integrated steel plants transition to green steel production?
A: Existing integrated steel plants can transition to green steel production by retrofitting their facilities to incorporate hydrogen-based processes and carbon capture technologies, along with integrating green electricity into their operations.
Q: What role do steel companies play in the energy transition?
A: Steel companies are pivotal in the energy transition as they innovate and invest in sustainable technologies, aiming to lead the global steel sector towards green steel production and contribute to overall emissions reduction in the steel industry.
Q: What is the future outlook for the green steel market?
A: The future outlook for the green steel market is promising, with increasing demand for sustainable steel products, advancements in technology and supportive policies likely to drive growth in the production of green steel in the coming years.
