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Green Steel: Coal-Free Innovation in the Auto Industry

Updated: Nov 16, 2021

Emily Davies explores the use of ground-breaking ‘green steel’ in car manufacturing.

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Photo by Louis Tricot

Car manufacturing companies are beginning to recognise the value of using ‘green steel’ in their vehicle production, including Volvo, Mercedes-Benz and Volkswagen.

‘Green steel’ is a newly-developed alternative to the original metal, using electricity and hydrogen power to generate the widely-used alloy rather than coal, which was previously necessary to complete its production.

Revolutionising Car Manufacture

This year, several car production companies have announced intentions to make the manufacturing of their vehicles more environmentally-friendly by beginning to use green steel to form the body of their vehicles.

In March 2021, Volkswagen announced plans to produce electric cars with a carbon-neutral value chain, and shortly after, in April 2021, it was announced that Volvo and steel company SSAB signed a collaboration agreement to pursue vehicles made from fossil fuel-free steel. This September, Mercedes-Benz also launched a partnership with SSAB to use green steel in its vehicle production, hoping that its new passenger car fleet will be carbon neutral by 2039.

The steel company SSAB wants to supply the market with green steel at a commercial scale by 2026, and is part of a partnership with power company Vattenfall and Swedish miner LKAB in the hope of doing so. They have formed HYBRIT (Hydrogen Breakthrough Ironmaking Technology), one of the leaders in zero-carbon steel technology.

Making Steel Green

The steel industry contributes between 6% to 7% of total global greenhouse gas emissions every year because the process requires such high temperatures, and until recently, only fossil fuels were able to provide the intense energy needed.

However, several methods that try to eliminate coal from the process are currently being piloted, the furthest developed being hydrogen-based direct reduction, whereby iron ore fines are directly converted to liquid, ready to be used in steel, via contact with hydrogen in ionised form.

Another well-known strategy for reducing steel-making emissions is to move from blast furnace production to electric arc furnace production. Still, the Rocky Mountain Institute report clarifies that the electric arc furnace is not a direct substitute as it cannot create steel from pure iron ore. As electric arc furnace production increases, so must the supply of recycled scrap steel to replace the iron ore traditionally used, but there is not currently enough scrap available to fulfil demand. 

The Rocky Mountain Institute brief says that the demand for steel is forecasted to grow steadily from 1700 million tons a year to a staggering 2150 million in 2050. As scrap supply increases over time, it is hoped that the demand increasing for scrap to be used in green steel can be met.

Further, some carbon is still needed for these types of production, but it can be sourced from biomethane or other biogenic carbon sources to bypass this problem. However, sourcing biomass sustainably and at scale would be difficult and would likely still create some fossil fuel emissions, so to make the process entirely, carbon neutral, those emissions would need to be captured and stored. 

Concluding Comments

Seven out of the ten largest steel-producing countries have at least one green steel project currently ongoing, but right now, this effort is concentrated in places which already have ambitious environmental goals, rather than countries which are not yet prioritising environmentalism; even if the most progressive steel companies switched to zero-carbon steel processes, it would only represent 8% of the global steel market. It will be a long while before the entire industry shifts towards the greener alternative.

Although utilising ‘green steel’ is a great method for reducing the emissions of the steel industry, it is not a magic solution. However, the fact that car companies are recognising the consumer appeal of greener products and are adapting to meet this demand is a great start. More investment in environmentally friendly products means there is more money being put into low-emission technology alternatives, which can only be a good thing.


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