2023-09-20 | GID Team

On September 20^th, the GID team published a research paper titled “Plant-by-plant decarbonization strategies for the global steel industry” in the journal Nature Climate Change. The research constructed a new global facility-level CO₂ emission database for the global steel industry, revealing significant gaps in CO₂ emission intensity, age, technology, and capacity among global primary steelmaking plants. Based on the database, the authors designed two indicators targeting decarbonization potential and economic benefits, respectively, to identify the priorities for plant-by-plant mitigation and explore the cost-benefits of different decarbonization strategies.

Over the recent decades, urbanization and industrialization have led to surging demand for iron and steel. But iron and steel industry is energy- and carbon-intensive. In 2019, CO₂ emissions from global iron and steel industry accounted for around 7% of global anthropogenic CO₂ emissions. Steel industry’s CO₂ emissions mainly result from primary steelmaking. Currently, the availability of high-quality steel scrap for secondary steelmaking is insufficient; alternative low-carbon technologies are not yet mature; the growing demand has led to commission of large fleets of young and carbon-intensive primary steelmaking facilities. Therefore, in the context of global climate governance, the decarbonization challenges for primary steelmaking plants are particularly important in short- and medium-term.

To tackle to problem, the GID team utilized fusion and modeling technology based on multi-source big data, to compile basic information on over 13,000 operating and retired facilities in global steel industry, which covered key processes such as coking, sintering, pelletizing, ironmaking, and steelmaking. The authors also developed a unified dynamic emission accounting system and, for the first time, established a dynamic and time-series CO₂ emission database for global steelmaking plants for the period of 1970-2019, named as Global Iron and Steel emission Database (GISD).

The research revealed the significant gaps among global primary steelmaking plants in energy efficiency, technology, and CO₂ emissions. Based on the analysis, the authors designed two targeted indicators: CO₂ emission intensity and age-to-capacity ratio (defined as the ratio between plant age and capacity). The indicators aimed to identify decarbonization priorities for primary steelmaking plants, considering both decarbonization potential and economic benefits. Further, comprehensive plant-level assessments for decarbonization cost-benefits were conducted. For the identified primary steelmaking plants, the authors designed different decarbonization strategies, including excess capacity phase-out, energy efficiency improvement, and transformation towards secondary steelmaking. Refined assessments of the decarbonization potential and cost-benefits for each plant were performed, revealing plant-level decarbonization strategies that simultaneously address emission reduction “quantity” and “efficiency” on global and regional scale.

The research shows the significant differences in age-to-capacity ratios and CO₂ emission intensity among global primary steelmaking plants in 2019（Fig.1). For instance, in 2019, 9.3% of global CO₂ emissions from primary steelmaking plants were disproportionally produced by 3.0% of primary steel production. The effects of age-to-capacity ratio and CO₂ emission intensity as targeted indicators also exhibited significant regional differences. The steelmaking plants in developing countries like India, characterized by higher energy intensity, showed greater emission reduction potential based on CO₂ emission intensity indicator, while for those in developed countries with larger ages, age-to-capacity ratio was more effective. Furthermore, different decarbonization strategies had significant differences in decarbonization potential. Although energy efficiency improvement can be an effective measure for CO₂ emission reduction in developing countries, transformation towards primary steelmaking was considered as a more sustainable low-carbon strategy, with global decarbonization potential exceeding 1.3 billion tonnes.

At global scale, the costs per unit CO₂ emission reduction of different decarbonization strategies were relatively close, and exhibited an increasing trend as more plants are targeted (known as diminishing marginal effect)（Fig.2). Due to the high energy efficiency in developed countries, the cost benefits of transformation towards secondary steelmaking were generally higher than those of energy efficiency improvement. In developing countries, however, the differences between the two strategies were relatively smaller. Prioritizing the elimination of excess capacity in addition to transformation towards secondary steelmaking and energy efficiency improvement could significantly enhance cost-benefits, as decommissioning older plants generally results in small stranded capital. Finally, a combination of age-to-capacity ratio and CO₂ emission intensity could further improve cost-benefits. For instance, take transformation towards secondary steelmaking as an example, combining both indicators reduced abatement cost metrics by 5%-6% compared to using a single indicator.

This research revealed plant-by-plant decarbonization strategies and related cost-benefits in the global steel industry for the first time, showing a optimized pathway for short- to medium-term low-carbon transition in the global steel industry. It emphasizes the significance of location-specific and targeted mitigation for achieving a carbon-neutral and sustainable future in the global steel industry.

Ph.D. student Ruochong Xu from the Department of Earth System Science at Tsinghua University is the first author of this paper, and Assistant Professor Dan Tong is the corresponding author. The co-authors of the paper include Professor Kebin He, the dean of School of Environment and Institute of Carbon Neutrality at Tsinghua University, Professor Qiang Zhang from the Department of Earth System Science, and Professor Steven J. Davis from University of California, Irvine, as well as Dr. Jing Cheng, Dr. Qinren Shi, Dr. Yang Liu, Dr. Liu Yan and Ph.D. students Xinying Qin, Cuihong Chen, Xize Yan, Huaxuan Wang, and Dongsheng Zheng from the GID team. The research is supported by the National Natural Science Foundation of China and the Energy Foundation.

Article link: https://www.nature.com/articles/s41558-023-01808-z