Expert Q&A: Green steel production

Whilst steel is key to our low carbon future, its production is a leading cause of global CO2 emissions. The Engineer spoke to a panel of experts about progress in the development of so-called green steel production methods.

Photo from Ovako of full-scale production trial that evaluated hydrogen as fuel for a steel heating furnace prior to hot rolling
Photo from Ovako of full-scale production trial that evaluated hydrogen as fuel for a steel heating furnace prior to hot rolling - Ovako

Used in everything from wind turbines to electric vehicles, steel is a key building block of the green revolution. But with its production responsible for around seven per cent of global CO2 emissions, existing processes clearly need to change. The Engineer spoke to a group of experts from across the steel sector to learn about the challenges of shifting production away from fossil fuels; the technologies that could help achieve this; and when - if ever  - we can expect high volume green steel production to become a reality. 

Meet the experts 

Dr Pete Osborne - Senior Research fellow, The University of Sheffield Advanced Manufacturing Research Centre (AMRC)

Katarina Kangert - Head of Sustainability and Safety, Ovako

Karin Hallstan - Head of Public and Media Relations, H2 Green Steel

Dr Richard CurrySUSTAIN and iSPACE Programme Manager, Swansea University

Outline your involvement in the field

Dr Pete Osborne: The University of Sheffield AMRC works with industry to transform industrial and economic performance by making step changes in productivity, increasing competitiveness, developing new products and processes and training new talent and skills. In 2021, I co-authored ‘Making GREENSTEEL today’s low-carbon reality – the investment case for GREENSTEEL’ alongside the Green alliance, GFG Alliance and Bright Blue.

Katarina Kangert:  At Ovako, we have already converted most of our heat treatment furnaces from gas to electricity. This is a major factor in reducing the CO2 emissions from our operations by 57% since 2015. The next step is conversion of our steel heating furnaces. This, together with other activities to reduce CO2, will further reduce our process emissions by a total of 80% from the 2015 baseline.

To achieve this, we are building Sweden’s largest clean hydrogen electrolysis plant at our Hofors mill in partnership with Volvo, Hitachi Energy, H2 Green Steel and electrolysis company Nel. This is due to enter service in May 2023 and will give us insight into how best to scale up clean hydrogen production.

Conversion of furnaces from a propane-oxygen mix to a hydrogen-oxygen mix is not straightforward as propane molecules have significantly more energy than hydrogen. Before starting work on our hydrogen electrolysis plant, we developed a control system to switch between hydrogen and propane seamlessly without interrupting furnace operations.  We also ran a series of production trials to confirm that switching fuels would have no impact on the hot rolling process or the quality of hot rolled steel.

Karin Hallstan: H2 Green Steel was launched February 2021 with the ambition to decarbonize hard-to-abate industries, starting with steel. By 2025 we plan to have production up and running, scaling volumes in 2026 to 2,5 million tonnes of steel. In phase two of our project, we will produce 5 million tonnes of steel per year. Our production site in northern Sweden, will hold one of the world’s largest electrolysis plants for green hydrogen production to date [the same plant referenced above by Ovako], a DRI (Direct Reduced Iron) tower for the production of sponge iron and an ultra-modern steel mill to produce the green steel. Renewable electricity locally sourced in northern Sweden is key to making this happen.

We have presold 60% of our initial volumes to customers like BMW, Mercedes, Miele, Elextrolux, Scania, Adient, Kingspan and some 15 other public references who have validated the demand for green steel.

Dr Richard Curry: The SUSTAIN Network is the UK’s National Steel Decarbonisation Research Hub, centered at Swansea University with spokes at Sheffield, Warwick Manufacturing Group and active participation from other leading universities.

Using a multidisciplinary collaboration model, SUSTAIN is highly active in many of the areas discussed below, with focused research also being conducted for the transition to green steel production such as maximizing the tolerance of residuals, designing new, resilient steel grades for green energy transport and production, novel low and robust high temperature sensors, and novel AI driven processes for scrap sorting, process control, optimized maintenance and digital twins. My personal involvement focusses upon efficient and economically viable separation of End-of-life steel (scrap) and other raw materials to drive local, green supply chain for UK and global manufacturing

What are the key challenges presented by a move away from the use of fossil fuels for steel production?

PO: The steel industry currently accounts for 4% of all CO2 emissions and 22% of industrial CO2 emissions in Europe. There are currently two main processes for making crude steel, the blast furnace-basic oxygen furnace (BR-BOF) process and the electric arc furnace (EAF) process. Both rely on the reduction of iron to form the feedstock for the steel making process and this historically requires the use of a reducing agent, such as pulverised coal (PC), oil, natural gas or a combination of these, all of which release CO2 as part of the process.

To be commercially viable, green steel requires a sufficient supply of both hydrogen and renewable energy at a competitive rate

Dr Pete Osborne - AMRC

To be commercially viable, green steel requires a sufficient supply of both hydrogen and renewable energy at a competitive rate. One of the most important barriers to adoption [in the UK] is therefore the comparatively high industrial energy costs, compared to our competitors in Europe. It has been reported that UK steelmakers pay around 80% more for electricity than French steelmakers.

KK: At Ovako, we are focusing on two main challenges. The first is maintaining and expanding our use of zero-carbon electricity. Our demand is set to grow in coming years as we plan to install electrolysis equipment at our mills. This will generate clean hydrogen to replace fossil fuels in our steel heating furnaces.  We also use emission-free Nordic electricity to minimize our scope 2 emissions by powering our electric arc furnaces (EAFs) and heat treatment furnaces, as well as other operations.

The second challenge is minimizing scope 3 emissions by sourcing raw materials and consumables with a low carbon footprint.

One relates to the availability of low-emission alloys and lime. These are essential for controlling the carbon footprint of steel. The availability of these is tightening as demand for sustainable products grow.

Another potential drawback is related to the coke and electrodes that are used as consumables in EAF steelmaking. There is currently no alternative to coke as a reducing agent and it is not possible to source emissions-free electrodes. We’re progressing with research projects to develop technical solutions for these.

KH: The lack of level playing field between incumbent companies and companies that have a more sustainable solution ready to implement [is a key challenge]. The free allocations of emissions in EU have allowed for the existing steel industry to delay change in the steel industry longer than would have been necessary.

RC: The switch from fossil fuel to electricity will both place a much higher load upon traditional supply infrastructure that many developed countries will struggle to supply given the lack of investment and slow uptake of green energy generation and storage. H2 chemical energy is only ‘greener’ than conventional fossil fuels when generated using green electricity or traditional supply with carbon capture and storage and utilisation (CCSU) methods. Furthermore, H2 generated from green or fossil fuel powered electricity will require almost 3 times the electrical energy we convert once electrolysis efficiency losses, gas compression and transport are considered, putting additional loading on infrastructure.


In terms of technology, one of the biggest issues lies in the effective use of the arising scrap material and the ability to separate, sort and segregate in a meaningful way.

Dr Richard Curry - Swansea University


In terms of technology, one of the biggest issues lies in the effective use of the arising scrap material and the ability to separate, sort and segregate in a meaningful way. Scrap is potentially the most effective resource for green steelmaking that the historically industrialised nations possess, having already been manufactured into high quality product and, if better utilised, would provide many nations, including the US and UK, with key, cost effective ways of producing steel.

The UK for instance generates 10.2mT of scrap on an annual basis, but only currently produces approximately 7.2mT of steel.

Globally, we only have the potential to generate half the Fe volume required to service the predicted consumption of steel by 2050 utilising commercial green steelmaking methods once contaminants are removed from scrap and available H2DRI viable ores. Above all other challenges, this supply and demand issue requires much more attention than is currently given.

What technologies represent the most promising solution?

PO: Hydrogen is one way of reducing the emissions of the steel sector and it can be used as the sole reducing agent in the H2 direct iron reduction (H2-DRI) process in the production of sponge iron. This can then be fed into an EAF furnace, where it is melted to produce steel. Some carbon is still needed so that steel can be produced and there are resultant emissions of CO2  - but this combination has the potential to significantly reduce the emissions associated with the production of steel.

Direct reduction of iron is not a new technology. However, the use of pure hydrogen is a new step. At present there is one DRI plant in Europe, however there are 14 DRI projects at various stages of planning, construction, and commissioning. None of these are located within the UK, and we stand a real chance of falling behind or being forced to import sponge iron from overseas unless investment is made in the technology quickly.

The UK is much better placed with respect to EAF facilities, with several facilities in operation currently utilising a mixture of virgin material and recycled steel to produce new specialty steel. The ‘greenness’ of this steel however is dependent again on the use of green energy to power the process and the emissions associated with supply of crude steel.

A further way which the industry can help is by reducing virgin material usage. In 2019, the UK consumed 11.9 million tons of steel and produced 11.3 million tons of scrap - and 8.7 million tons of this scrap was exported, and the remainder was consumed in UK crude steel making.

UK steel makers can use in the region of 6.1 Mt of scrap steel in current steel manufacturing plants, so there is scope for improvement here, which will reduce the need for new virgin material to be produced and its associated emissions.

KH: We will use electrolysis to decompose water into hydrogen and oxygen using electricity. It is the starting point for our green steel production process. Our giga-scale electrolysis will be an integrated part of the plant, using fossil-free electricity to produce the hydrogen.

Our DR reactor then refines iron ore to direct-reduced iron (DRI). This is done by exposing iron ore to hydrogen, which reacts with the oxygen in the ore to form steam as a residual. Using our green hydrogen produced in our electrolysis for reduction instead of coal, typically used in integrated steel plants, allows us to reduce CO2 emissions from the reduction process by more than 95 percent. The majority of DRI is transported in the hot state inside the plant to the Electric Arc Furnace,  the first step in our electric meltshop.

H2 Green Steel's production plant in Boden, Sweden will be powered by one of the world's largest electrolysis plants for green hydrogen - H2 Green Steel

In the Electric Arc Furnace, fossil-free electricity will be used to heat a combination of DRI and steel scrap to a homogenous melt of liquid steel. In the melting process, carbon plays an important role in lowering electricity consumption, forming protective properties of the slag on top of the melt and enabling the transformation of iron to steel.  From the Electric Arc Furnace, the melt is transferred to our ladle furnace and RH degasser, where alloys are added to the melt to refine chemistries.

We turn liquid steel into solid products in an integrated process called “continuous casting and rolling,” allowing us to keep the steel warm all the way from the Electric Arc Furnace to finished product. The integrated process enables us to reduce energy consumption by 70 percent and replace natural gas typically used in the traditional process for producing hot roll coil.

RC: The SUSTAIN project has focused upon both the short-term transition and longer term (post-2050) vision for green steelmaking. This includes novel methods for maximizing the usage of scrap steels through engineered processing geared to product, CCU, substitution of coal with plastic waste  and energy efficiency improvements for green BF operation as the UK makes the transition, together with the longer term developments regarding EAF transition.

Globally, the advent of H2DRI which is currently being rolled out semi-commercially, greater focus both in the US and Europe upon improving scrap quality, lower energy consumption from EAFs and the production of high-quality strip products through the EAF route are all positive steps towards a green future. In terms of the availability of green Fe, in the quantities required, several ore producers are focusing upon beneficiation and potentially subsidizing hematite with magnetite to increase supply. Technologies focusing upon utilizing the abundant low-quality ores that cannot be processed through H2DRI, such as Boston Metals’ electrolysis method also present promising, green solutions to this problem.

In terms of energy, the ongoing improvements to the efficiency of green generation is promising but there is still a long way to go: including both the cost, energy density and the need to overcome the absence of electrical inertia which could be resolved using flywheels. Developments in nuclear energy, i.e. Small Modular Reactors, will also potentially play a significant role in ensuring the availability of carbon free energy for foundation industries.

When do you expect volume production of green steel to become a reality?

PO: The technology currently exists to significantly reduce, but not eliminate the emissions associated with the steel making process. However, its use to produce green steel is almost entirely dependent on the correct commercial environment existing, which allows the supply of green energy and green hydrogen at a price which is commercially attractive.

Steel making is clearly not the only industry competing for these commodities and their availability will be constrained in the near term.  It is therefore likely that we will see the transition to green steel, constrained by the availability of these two key feed stocks in suitable quantities and at a competitive cost.

In 2020 McKinsey estimated that pure hydrogen-based steel production was expected to be cost competitive between 2030 and 2040 in Europe. Government policy has a clear influence on the exact date, and a policy that creates the correct market conditions within the UK, will have a positive effect on our ability as a nation to produce green steel at volume at an earlier date.

KK:  We achieved carbon neutral steel production in January 2022 by adopting efficient processes, clean electricity and converting heat treatment furnaces to electricity and by counterbalancing the last remaining emissions with carbon offsets. Measures and activities have given us a carbon intensity of 86 kg of CO2 per tonne, which compares with the global average of 1700 kg. To account for the remaining emissions, we are currently sourcing carbon offsets under the Verified Emissions Reductions (VER) scheme to achieve carbon neutral status. We will scale these back over time as we cut our emissions.

Bar production at Ovako's plant in Hofors, Sweden - Ovako

RC: Optimistically, we should see some local examples, particularly in countries with sufficient scrap generation and investment capability before 2030. However, this will rely upon maximisation of scrap utilisation, requiring the evolution of the scrap supply chain and accurate scrap analysis with greater control of scrap material separation.

Globally, the challenge is greater. Developing and more recently industrialised nations are further behind the curve in terms of scrap generation and will need to utilise more virgin iron to compensate. We have also contaminated a significant amount of current and future scrap steel through poor processing and segregation. This will require substantial dilution with virgin Fe to manufacture high quality grades or ensuring that this material is reused as it is currently for rebar and other tolerant construction grades. If a solution is not found many sectors will continue to require fossil fuel generated steels, with CO2 generation only being mitigated by CCSU and/or a much-reduced consumption of steel.