The Institute for Energy Economics and Financial Analysis (IEEFA) has stated that the prospects for carbon capture and storage in the steel industry, seen as one solution for reducing greenhouse gas emissions from steelmaking, look increasingly bleak. Nonetheless, major steelmakers and miners such as Nippon Steel, ArcelorMittal and BHP Billiton continue to insist that investing in carbon capture, utilization and storage (CCUS) technology will play a significant role in meeting their decarbonization targets despite growing evidence to the contrary.
The main obstacle regarding CCUS technology is that coal-burning blast furnace steel plants require multiple points of carbon capture to allow production of low-carbon steel, increasing costs significantly. Stating that there are still no commercial-scale CCUS plants for blast furnace-based steelmaking in operation anywhere in the world, the IEEFA noted that the cost involved means capturing sufficient carbon at coal-based steelmaking sites will likely never be financially viable.
By 2030, the capacity of direct reduced iron plants will reach an annual 96 million mt, while commercial-scale CCUS for blast furnace-based operations remains stuck on just an annual one million mt. Although the cost of green hydrogen, which is a key enabler of truly low-carbon iron and steel production, is also high, it is a better alternative for CCUS on both cost and emissions reductions.