Blast Furnace

Is Trump's Steel Trade War Good for the Climate?

steel-mill-616526_1280.jpg

President Trump just suggested to impose a 25% tariff on steel imports. While there are mix reactions to this announcement and many say it can lead to a trade war, I thought to look at it from climate change point of view. Is a U.S. tariff on steel imports good for the climate? The answer is it depends on where we are importing steel from. I will discuss this in more details below. According to USGS, U.S. imported around 36 million ton of steel in 2017, which equals to about 43% of total steel production in the U.S. that year.

Iron and steel production is an energy and carbon dioxide (CO2) intensive manufacturing process. Two types of steel production dominate the industry: blast furnace/basic oxygen furnace (BF/BOF) and electric arc furnace (EAF) production. BF/BOF production uses iron ore to produce steel. The reduction of iron ore to iron in a BF is the most energy-intensive process within the steel industry. EAF production re-melts mainly scrap to produce steel. BF/BOF production is more energy intensive and emits more GHG than EAF production.

A few years ago, when I was working at Lawrence Berkeley National Laboratory, I led a study to compare the CO2 intensity of steel production in four major steel producing countries: China, Germany, Mexico, and the U.S. We defined a similar boundary for the steel industry in these countries and adjusted the CO2 intensity based on net import of fuel and intermediary products (e.g. net imported pig iron, direct-reduced iron (DRI), pellets, lime, oxygen, ingots, blooms, billets, and slabs). The result of our study is presented in the graph below. More results and scenario analysis can be found in the report we published (see link at the bottom). Our analysis used 2010 data because that was the latest year for which the data were available for all four countries at the time of the study.

Figure. CO2 intensity of the iron and steel industry in China, Germany, Mexico, and the U.S. in 2010 (Hasanbeigi et al. 2016)

Figure. CO2 intensity of the iron and steel industry in China, Germany, Mexico, and the U.S. in 2010 (Hasanbeigi et al. 2016)

As can be seen from the Figure above, China has the highest and Mexico has the lowest total steel industry CO2 intensity. The total CO2 intensity of the Chinese steel industry is almost twice that of the Mexican steel industry. Two main reasons for low total CO2 intensity in Mexico’s steel industry are: a) Mexico has the largest share of EAF steel production among the four countries studied (69% in 2010), and b) Mexico’s steel industry consumes a larger share of natural gas compared to that in other countries studied. This results in a lower average emissions factor for fuels in Mexico. Another interesting point to note is that the total CO2 intensity of the German steel industry is 2% lower than that of the U.S. which is remarkable given that, in 2010, Germany had a lower share of EAF steel production (30% of total production) than the U.S. (61% of total production). However, it should be noted that the U.S. steel industry would have had lower CO2 intensity if we had not adjusted for net import of intermediary products to the steel industry, but that would have not been an accurate comparison. 

Our analysis also showed that the CO2 intensity of BF/BOF steel production alone in the U.S. is significantly higher than that in other three countries. This could be because of various reasons such as older BF/BOF plants and lower penetration of some major energy efficiency technologies such as coke dry quenching (CDQ) and top-pressure recovery turbine (TRT) in blast furnaces, etc.

Some of the key factors influencing the CO2 intensities of the steel industry are: share of EAF from total steel production, the age of steel manufacturing facilities in each country, the level of penetration of energy-efficient technologies, the scale of production equipment, the fuel shares in the iron and steel industry, the steel product mix in each country, the CO2 emissions factor of electricity grid, etc.

Figure below shows the Top 10 countries from which U.S. imported steel in 2014.

fig 2.png

Even though our aforementioned study did not include all the countries from which U.S. imports steel, many of them are known for having low energy and carbon intensive steel industry and/or having high EAF steel production share, which helps to reduce the CO2 intensity of their entire steel industry. Figure below shows the share of EAF steel production (one of the key factors influencing overall CO2 intensity of the steel industry in a country) in top 10 counties from which U.S. imports steel.

fig 3.png

It worth mentioning that U.S. also exported around 11 million ton of steel in 2017, around 90% of which went to Canada and Mexico. In fact, even though Canada and Mexico are among top countries from which U.S. imports steel, U.S. export more steel to Canada and Mexico than imports from them. Therefore, imposing steel import tariffs for these two countries does not seem to be effective.

To sum up, the U.S. tariff on steel imports can be good for the climate if it is based on carbon footprint of the steel imported and not just a blanket tariff. In fact, state of California recently passed a Buy Clean regulation, which calls for the state to create rules for the procurement of infrastructure materials (including steel) purchased with state funds that take into account pollution levels during production. It was one of the rare cases where both environmentalist and industry advocates agreed and backed the regulation. This could be an example of environmental- and climate-friendly procurement and trade tariffs that can benefit both industry and the environment and incentivize high polluting companies that are out-of-state or-country to clean up their production in order to be able to trade with these states or countries.

Needless to say, an import tariff on steel could result in a major trade war that will include other industrial sectors and products.

More details of our steel industry CO2 intensity comparison analysis and results are presented in the report that is published on LBNL’s website and can be downloaded from this Link.

Don't forget to Follow us on LinkedIn and Facebook to get the latest about our new blog posts, projects, and publications.

Also read our related blog posts:

Some of our related publications are:

  • Hasanbeigi, Ali; Arens, Marlene; Rojas-Cardenas, Jose; Price, Lynn; Triolo, Ryan. (2016). Comparison of Carbon Dioxide Emissions Intensity of Steel Industry in China, Germany, Mexico, and the United States. Resources, Conservation and Recycling. Volume 113, October 2016, Pages 127–139
  • Zhang, Qi; Hasanbeigi, Ali; Price, Lynn; Lu, Hongyou; Arens, Marlen (2016).  A Bottom-up Energy Efficiency Improvement Roadmap for China’s Iron and Steel Industry up to 2050. Berkeley, CA: Lawrence Berkeley National Laboratory. LBNL- 1006356
  • Morrow, William; Hasanbeigi, Ali; Sathaye, Jayant; Xu, Tengfang. 2014. Assessment of Energy Efficiency Improvement and CO2 Emission Reduction Potentials in India’s Cement and Iron & Steel Industries. Journal of Cleaner Production. Volume 65, 15 February 2014, Pages 131–141
  • Hasanbeigi, Ali; Price, Lynn, Aden, Nathaniel; Zhang Chunxia; Li Xiuping; Shangguan Fangqin. 2014. Comparison of Iron and Steel Production Energy Use and Energy Intensity in China and the U.S. Journal of Cleaner Production, Volume 65, 15 February 2014, Pages 108–119
  • Hasanbeigi, Ali; Morrow, William; Sathaye, Jayant; Masanet, Eric; Xu, Tengfang. (2013). A Bottom-Up Model to Estimate the Energy Efficiency Improvement and CO2 Emission Reduction Potentials in the Chinese Iron and Steel Industry. Energy, Volume 50, 1 February 2013, Pages 315-325
  • Hasanbeigi, Ali; Arens, Marlene; Price, Lynn; (2013). Emerging Energy Efficiency and CO2 Emissions Reduction Technologies for the Iron and Steel Industry. Berkeley, CA: Lawrence Berkeley National Laboratory BNL-6106E.

References

  • Hasanbeigi, Ali; Arens, Marlene; Rojas-Cardenas, Jose; Price, Lynn; Triolo, Ryan. (2015). Comparison of Energy-Related Carbon Dioxide Emissions Intensity of the International Iron and Steel Industry: Case Studies from China, Germany, Mexico, and the United States
  • Hasanbeigi, Ali; Arens, Marlene; Rojas-Cardenas, Jose; Price, Lynn; Triolo, Ryan. (2016). Comparison of Carbon Dioxide Emissions Intensity of Steel Industry in China, Germany, Mexico, and the United States. Resources, Conservation and Recycling. Volume 113, October 2016, Pages 127–139
  • USGS, 2018 and 2014. Iron and Steel
  • Buy Clean California. http://buycleancalifornia.org

The Impact of Emissions Control Technologies on Emissions from the Cement and Steel Industry in China up to 2050

smoke-258786_1280.jpg

Production of iron and steel is an energy-intensive and air polluting manufacturing process. In 2014, the iron and steel industry accounted for around 28 percent of primary energy consumption of Chinese manufacturing (NBS 2015a). Steel production in 2015 was 804 Mt (worldsteel, 2016), representing 49.5% of the world production that year (Figure 1).

Figure 1. China’s Crude Steel Production and Share of Global Production (1990-2015) (EBCISIY, various years; NBS, 2015b, worldsteel 2016)

Figure 1. China’s Crude Steel Production and Share of Global Production (1990-2015) (EBCISIY, various years; NBS, 2015b, worldsteel 2016)

Chinese steel industry contributed to about 20% of SO2 emissions, and 27% of dust and PM emissions for all key manufacturing industry in China in 2013 (Wang et al. 2016).

China also produces over half of the world’s cement with 2,360 million Mt produced in China in 2015 (NBS 2015b). Two types of kilns are used in China to produce clinker, which is the key ingredient in cement: vertical shaft kilns and rotary kilns. Vertical shaft kilns are outdated technologies that use significantly more energy to produce a ton of clinker than rotary kilns do. The cement production from rotary kilns grew rapidly in recent years, from 116 Mt in 2000 to 1,494 Mt in 2010 (Figure 2).

Note: 2011 – 2015 production shares are based on our model projections  Figure 2. Cement production in China by kiln type, 1990-2015 (ITIBMIC 2004, MIIT 2011, NBS 2015b)

Note: 2011 – 2015 production shares are based on our model projections

Figure 2. Cement production in China by kiln type, 1990-2015 (ITIBMIC 2004, MIIT 2011, NBS 2015b)

Consistent with the Chinese cement industry’s large production volume, total CO2 emissions from the industry are very high, as are associated air pollutant emissions, including sulfur dioxide (SO2), nitrogen oxides (NOX), carbon monoxide (CO), and particulate matter (PM). These emissions cause significant regional and global environmental problems. The cement industry is the largest source of PM emissions in China, accounting for 40 percent of PM emissions from all industrial sources and 27 percent of total national PM emissions (Lei et al. 2011).

 

In addition to setting emissions standard and adoption of end-of-pipe emissions control technologies, Chinese government policies also focus on reducing energy use, which, in turn, helps to reduce greenhouse gas (GHG) emissions. Other important co-benefits of energy-efficiency policies and programs are reduced harm to human health through reduction in air pollutant emissions, reduced corrosion, and reduction in crop losses caused by surface ozone and regional haze.

In early 2017, my colleagues at Lawrence Berkeley National Laboratory and I published a study in which we analyzed and projected the total particulate matter (PM) and sulfur dioxide (SO2) emissions from the Chinese cement and steel industry during 2010-2050 under three different scenarios. We used the bottom-up emissions control technologies data to make the emissions projections. The three distinct scenarios developed were as follow:

  1. Base Case Scenario: a baseline scenario that assumes that only policies in place in 2010 continue to have effect, and autonomous technological improvement (including efficiency improvement and fuel switching) occurs. The end-of-pipe emissions control technologies shares and penetration remain at 2010 level through the study period up to 2050.
  2. Advanced scenario: China meets its energy needs and improves its energy security and environmental quality by deploying the maximum feasible share of currently cost-effective energy efficiency and renewable supply technologies by 2050. The end-of-pipe emissions control technologies share and penetration remain at 2010 level through the study period up to 2050.
  3. Advanced scenario with Improved End-of-Pipe (EOP) Emissions Control (Advanced EOP): Similar to Advanced scenario explained above with the only difference being the end-of-pipe emissions control technologies share and penetration rate improves through the study period up to 2050.

In all three scenarios, only technologies that are commercialized or piloted at scale are considered. Following figures show the result of our analyses.

Figure 3. Total PM emissions of Chinese cement industry under different scenarios during 2010-2050

Figure 3. Total PM emissions of Chinese cement industry under different scenarios during 2010-2050

Figure 4. Total SO2 emissions of Chinese cement industry under different scenarios during 2010-2050

Figure 4. Total SO2 emissions of Chinese cement industry under different scenarios during 2010-2050

Figure 5. Total PM emissions of Chinese steel industry under different scenarios during 2010-2050

Figure 5. Total PM emissions of Chinese steel industry under different scenarios during 2010-2050

Figure 6. Total SO2 emissions of Chinese steel industry under different scenarios during 2010-2050

Figure 6. Total SO2 emissions of Chinese steel industry under different scenarios during 2010-2050

More details of the methodology used and results can be found in our report which is published on LBNL’s website and can be downloaded from this Link. Please feel free to contact me if you have any question.

Don't forget to Follow us on LinkedIn and Facebook to get the latest about our new blog posts, projects, and publications.

Some of our related publications are:

  1. Hasanbeigi, Ali; Arens, Marlene; Rojas-Cardenas, Jose; Price, Lynn; Triolo, Ryan. (2016). Comparison of Carbon Dioxide Emissions Intensity of Steel Industry in China, Germany, Mexico, and the United States. Resources, Conservation and Recycling. Volume 113, October 2016, Pages 127–139
  2. Zhang, Qi; Hasanbeigi, Ali; Price, Lynn; Lu, Hongyou; Arens, Marlen (2016).  A Bottom-up Energy Efficiency Improvement Roadmap for China’s Iron and Steel Industry up to 2050. Berkeley, CA: Lawrence Berkeley National Laboratory. LBNL- 1006356
  3. Hasanbeigi, Ali; Morrow, William; Sathaye, Jayant; Masanet, Eric; Xu, Tengfang. (2013). A Bottom-Up Model to Estimate the Energy Efficiency Improvement and CO2 Emission Reduction Potentials in the Chinese Iron and Steel Industry. Energy, Volume 50, 1 February 2013, Pages 315-325
  4. Hasanbeigi, Ali; Arens, Marlene; Price, Lynn; (2013). Emerging Energy Efficiency and CO2 Emissions Reduction Technologies for the Iron and Steel Industry. Berkeley, CA: Lawrence Berkeley National Laboratory BNL-6106E.
  5. Hasanbeigi, Ali; Agnes Lobscheid; Yue Dai; Price, Hongyou, Lynn; Lu (2012). Quantifying the Co-benefits of Energy-Efficiency Programs: A Case-study for the Cement Industry in Shandong Province, China Berkeley, CA: Lawrence Berkeley National Laboratory. LBNL-5949E.
  6. Hasanbeigi, Ali; Morrow, William; Masanet, Eric; Sathaye, Jayant; Xu, Tengfang. (2012). Assessment of Energy Efficiency Improvement and CO2 Emission Reduction Potentials in the Cement Industry in China. Berkeley, CA: Lawrence Berkeley National Laboratory. LBNL-5536E
  7. Hasanbeigi, Ali; Price, Lynn; Lin, Elina. (2012). Emerging Energy Efficiency and CO2 Emissions Reduction Technologies for Cement and ConcreteProduction. Berkeley, CA: Lawrence Berkeley National Laboratory LBNL-5434E.
  8. Hasanbeigi, Ali; Price, Lynn; Hongyou, Lu; Lan, Wang (2009). Analysis of Energy-Efficiency Opportunities for the Cement Industry in Shandong Province, China. Energy 35 (2010) 3461-3473 

 

References

  • Hasanbeigi, Ali; Nina Khanna, Price, Lynn (2017). Air Pollutant Emissions Projection for the Cement and Steel Industry in China and the Impact of Emissions Control Technologies. Berkeley, CA: Lawrence Berkeley National Laboratory.
  • Editorial Board of China Iron and Steel Industry Yearbook (EBCISIY). Various years. China Iron and Steel Industry Yearbook. Beijing, China (in Chinese).
  • Institute of Technical Information for Building Materials Industry (ITIBMIC). 2004. “Final Report on Cement Survey.” Prepared for the United Nations Industrial Development Organization (UNIDO) for the Contract Entitled Cement Sub-sector Survey for the Project Energy Conservation and GHG Emissions Reduction in Chinese TVEs-Phase II.
  • Lei,Y., Q. Zhang, C. Nielsen, K. He. 2011. “An inventory of primary air pollutants and CO2 emissions from cement production in China, 1990-2020.” Atmospheric Environment 45:147-154.
  • Ministry of Industry and Information Technology (MIIT). 2011. Production of building materials industry in 2010 and rapid growth of output of major products.
  • NBS. 2015a. China Energy Statistics Yearbook 2015. Beijing: China Statistics Press.
  • NBS. 2015b. China Statistical Yearbook 2015. Beijing: China Statistics Press.
  • Wang, K., Tian, H., Hua, S., Zhu, C., Gao, J., Xue, Y., Hao, J., Wang, Y., Zhou, J. 2016. A comprehensive emissions inventory ofmultiple air pollutants from iron and steel industry in China: Temporal trends and spatial variation characteristics. Science of the Total Environment 559 (2016) 7–14.
  • World Steel Association (worldsteel). 2016. Steel Statistical Yearbook 2016.


Infographic: The Iron and Steel Industry’s Energy Use and Emissions

steel-mill-616526_1280.jpg

The iron and steel industry is one of the most energy-intensive and highest CO2 emitting industries and one of the key industrial contributors to air pollutions (PM, SO­2, etc.) in the world. The infographic below is prepared by Global Efficiency Intelligence, LLC to summarize some key information on energy use and emissions in the iron and steel industry.

Global Efficiency Intelligence, LLC has experience conducting various projects and studies on energy efficiency, GHG and other emissions reduction, energy benchmarking, and technology roadmapping for the iron and steel industry in China, India, U.S., Germany, and Mexico.

Don't forget to Follow us on LinkedIn and Facebook to get the latest about our new blog posts, projects, and publications.

Some of our related publications are:

  • Hasanbeigi, Ali; Arens, Marlene; Rojas-Cardenas, Jose; Price, Lynn; Triolo, Ryan. (2016). Comparison of Carbon Dioxide Emissions Intensity of Steel Industry in China, Germany, Mexico, and the United States. Resources, Conservation and Recycling. Volume 113, October 2016, Pages 127–139

  • Zhang, Qi; Hasanbeigi, Ali; Price, Lynn; Lu, Hongyou; Arens, Marlen (2016). A Bottom-up Energy Efficiency Improvement Roadmap for China’s Iron and Steel Industry up to 2050. Berkeley, CA: Lawrence Berkeley National Laboratory. LBNL- 1006356

  • Morrow, William; Hasanbeigi, Ali; Sathaye, Jayant; Xu, Tengfang. 2014. Assessment of Energy Efficiency Improvement and CO2 Emission Reduction Potentials in India’s Cement and Iron & Steel Industries. Journal of Cleaner Production. Volume 65, 15 February 2014, Pages 131–141

  • Hasanbeigi, Ali; Price, Lynn, Aden, Nathaniel; Zhang Chunxia; Li Xiuping; Shangguan Fangqin. 2014. Comparison of Iron and Steel Production Energy Use and Energy Intensity in China and the U.S. Journal of Cleaner Production, Volume 65, 15 February 2014, Pages 108–119

  • Hasanbeigi, Ali; Arens, Marlene; Price, Lynn; (2013). Emerging Energy Efficiency and CO2 Emissions Reduction Technologies for the Iron and Steel Industry. Berkeley, CA: Lawrence Berkeley National Laboratory BNL-6106E.

  • Hasanbeigi, Ali; Morrow, William; Sathaye, Jayant; Masanet, Eric; Xu, Tengfang. (2013). A Bottom-Up Model to Estimate the Energy Efficiency Improvement and CO2 Emission Reduction Potentials in the Chinese Iron and Steel Industry. Energy, Volume 50, 1 February 2013, Pages 315-325

  • Hasanbeigi, A., Price, L., Aden, N., Zhang C., Li X., Shangguan F. 2011. A Comparison of Iron and Steel Production Energy Use and Energy Intensity in China and the U.S. Berkeley CA: Lawrence Berkeley National Laboratory Report LBNL-4836E.


56 Emerging Technologies for Energy-efficiency and GHG Emissions Reduction in the Iron and Steel Industry

Iron and steel manufacturing is one of the most energy-intensive industries worldwide. In addition, use of coal as the primary fuel for iron and steel production means that iron and steel production has among the highest carbon dioxide (CO2) emissions of any industry. According to the International Energy Agency, the iron and steel industry accounts for the largest share – approximately 27 percent – of CO2 emissions from the global manufacturing sector.

Figure 1: World steel production in 2015 by countries and regions (worldsteel 2016)

Figure 1: World steel production in 2015 by countries and regions (worldsteel 2016)

China accounts for around half of the world’s steel production. Annual world steel demand is expected to grow from approximately 1,410 million tonnes (Mt) of crude steel in 2010 to approximately 2,200 Mt in 2050. The bulk of this growth will take place in China, India, and other developing countries in Asia (Bellevrat and Menanteau 2008). This significant increase in steel consumption and production will drive a significant increase in the industry’s absolute energy use and CO2 emissions.

Studies have documented the potential to save energy by implementing commercially-available energy-efficiency technologies and measures in the iron and steel industry worldwide. However, today, given the projected continuing increase in absolute steel production, future reductions (e.g., by 2030 or 2050) in absolute energy use and CO2 emissions will require further innovation in this industry. Innovations will likely include development of different processes and materials for steel production or technologies that can economically capture and store the industry’s CO2 emissions. The development of these emerging technologies and their deployment in the market will be a key factor in the iron and steel industry’s mid- and long-term climate change mitigation strategies.

Many studies from around the world have identified sector-specific and cross- energy-efficiency technologies for the iron and steel industry that have already been commercialized (See figure below). However, information is scarce and scattered regarding emerging or advanced energy-efficiency and low-carbon technologies for the steel industry that have not yet been commercialized.

Figure 2: Commercialized energy efficiency technologies and measures for iron and steel industry (Source: IIP, 2012)

Figure 2: Commercialized energy efficiency technologies and measures for iron and steel industry (Source: IIP, 2012)

My colleagues at Lawrence Berkeley National Laboratory and I wrote a report that consolidated available information on emerging technologies for the iron and steel industry with the goal of giving engineers, researchers, investors, steel companies, policy makers, and other interested parties easy access to a well-structured database of information on this topic.

The information about the 56 emerging technologies for the steel industry was covered in the report and was presented using a standard structure for each technology. Table below shows the list of the technologies covered.

Table 1. Emerging energy-efficiency and CO2 emissions-reduction technologies for the iron and steel industry (Hasanbeigi et al. 2013)

Shifting away from conventional processes and products will require a number of developments including: education of producers and consumers; new standards; aggressive research and development to address the issues and barriers confronting emerging technologies; government support and funding for development and deployment of emerging technologies; rules to address the intellectual property issues related to dissemination of new technologies; and financial incentives (e.g. through carbon trading mechanisms) to make emerging low-carbon technologies, which might have a higher initial costs, competitive with the conventional processes and products.

Our report is published on LBNL’s website and can be downloaded from this Link. Please feel free to contact me if you have any question.

Don't forget to Follow us on LinkedIn and Facebook to get the latest about our new blog posts, projects, and publications.

Some of our related publications are:

  1. Hasanbeigi, Ali; Arens, Marlene; Rojas-Cardenas, Jose; Price, Lynn; Triolo, Ryan. (2016). Comparison of Carbon Dioxide Emissions Intensity of Steel Industry in China, Germany, Mexico, and the United States. Resources, Conservation and Recycling. Volume 113, October 2016, Pages 127–139
  2. Zhang, Qi; Hasanbeigi, Ali; Price, Lynn; Lu, Hongyou; Arens, Marlen (2016).  A Bottom-up Energy Efficiency Improvement Roadmap for China’s Iron and Steel Industry up to 2050. Berkeley, CA: Lawrence Berkeley National Laboratory. LBNL- 1006356
  3. Morrow, William; Hasanbeigi, Ali; Sathaye, Jayant; Xu, Tengfang. 2014. Assessment of Energy Efficiency Improvement and CO2 Emission Reduction Potentials in India’s Cement and Iron & Steel Industries. Journal of Cleaner Production. Volume 65, 15 February 2014, Pages 131–141
  4. Hasanbeigi, Ali; Price, Lynn, Aden, Nathaniel; Zhang Chunxia; Li Xiuping; Shangguan Fangqin. 2014. Comparison of Iron and Steel Production Energy Use and Energy Intensity in China and the U.S. Journal of Cleaner Production, Volume 65, 15 February 2014, Pages 108–119
  5. Hasanbeigi, Ali; Morrow, William; Sathaye, Jayant; Masanet, Eric; Xu, Tengfang. (2013). A Bottom-Up Model to Estimate the Energy Efficiency Improvement and CO2 Emission Reduction Potentials in the Chinese Iron and Steel Industry. Energy, Volume 50, 1 February 2013, Pages 315-325
  6. Hasanbeigi, A., Price, L., Aden, N., Zhang C., Li X., Shangguan F. 2011. A Comparison of Iron and Steel Production Energy Use and Energy Intensity in China and the U.S. Berkeley CA: Lawrence Berkeley National Laboratory Report LBNL-4836E.

References:

  • Bellevrat, E., P. Menanteau. 2008. “Introducing carbon constraint in the steel sector: ULCOS scenarios and economic modeling.” Proceedings of the 4th Ulcos seminar, 1-2 October.
  • Hasanbeigi, Ali; Arens, Marlene; Price, Lynn; (2013). Emerging Energy Efficiency and CO2 Emissions Reduction Technologies for the Iron and Steel Industry. Berkeley, CA: Lawrence Berkeley National Laboratory BNL-6106E.
  • Institute for Industrial Productivity. 2012. Iron and Steel technologies http://ietd.iipnetwork.org/content/iron-and-steel
  • worldsteel Association. 2016. World steel in figures.

Structural Change in Chinese Steel Industry and Its Impact on Energy Use and GHG Emissions up to 2030

Production of iron and steel is an energy-intensive and air polluting manufacturing process. In 2014, the iron and steel industry accounted for around 28 percent of primary energy consumption of Chinese manufacturing (NBS 2015a). Steel production in 2015 was 804 Mt (worldsteel, 2016), representing 49.5% of the world production that year (Figure 1).

Figure 1. China’s Crude Steel Production and Share of Global Production (1990-2015) (EBCISIY, various years; NBS, 2015b, worldsteel 2016)

Figure 1. China’s Crude Steel Production and Share of Global Production (1990-2015) (EBCISIY, various years; NBS, 2015b, worldsteel 2016)

China is a developing country and the iron and steel industry, as a pillar industry for Chinese economic development, has grown rapidly along with the national economy. The average annual growth rate of crude steel production was around 18% between 2000 and 2010. China’s steel production in 2014 consumed around 580 TWh of electricity and 18,013 PJ of fuel (NBS 2015a).

The promotion and application of energy-saving technologies has become an important step for increasing energy efficiency and reducing energy consumption of steel enterprises, especially during the 11th Five Year Plan (FYP) (2006-2010) and 12th FYP (2011-2015). During this time, energy-efficiency technologies adopted in China’s steel industry included: Coke Dry Quenching (CDQ), Top-pressure Recovery Turbine (TRT), recycling converter gas, continuous casting, slab hot charging and hot delivery, Coal Moisture Control (CMC), and recycling waste heat from sintering. The penetration level of energy-efficiency technologies in the steel industry has improved greatly in China, improving its energy efficiency and emissions reductions (Hasanbeigi et al. 2011).

Couple of years ago, my colleagues and I conducted a study that aimed to analyze influential factors that affected the energy use of steel industry in the past in order to quantify the likely effect of those factors in the future. For the first time, we developed a decomposition analysis method that can be used for the steel industry to analyze the effect of different factors including structural change on energy use of the steel industry.

The factors we analyzed were:

  1. Activity: Represents the total crude steel production.
  2. Structure: Represents the activity share of each process route (Blast Furnace/Basic Oxygen Furnace (BF-BOF) or Electric Arc Furnace (EAF) route).
  3. Pig iron ratio: The ratio of pig iron used as feedstock in each process route. This is especially important for the EAF process because the higher the pig iron ratio in the feedstock of the EAF, the higher the energy intensity of EAF steel production.
  4. Energy intensity: Represents energy use per ton of crude steel

In that study, a bottom-up analysis of the energy use of key medium- and large-sized Chinese steel enterprises (which account for around 85% of steel production in China) was performed using data at the process level. Both retrospective and prospective analyses were conducted in order to assess the impact of factors that influence the energy use of the steel industry in the past and estimate the likely impact in the future up to 2030.

Three scenarios were developed as follows:

o   Scenario 1: Low scrap usage: the share of EAF steel production grows slower and the pig iron feed ratio in EAF drops slower than other scenarios

o   Scenario 2: Medium scrap usage: the rate of growth in the share of EAF steel production and the drop in the pig iron feed ratio in EAF production is medium (between scenario 1 and 3)

o   Scenario 3: High scrap usage: the share of EAF steel production grows faster and the pig iron feed ratio in EAF production drops faster than other scenarios.

Figure 2 shows the energy intensities calculated for different steel production route up 2030

Figure 2. Final energy intensities calculated for key medium- and large-sized Chinese steel enterprises (2000-2030)

Figure 2. Final energy intensities calculated for key medium- and large-sized Chinese steel enterprises (2000-2030)

The results of our analysis showed that although total annual crude steel production of key Chinese steel enterprises (and most likely entire Chinese steel industry) is assumed to peak in 2030 under all scenarios, total final energy use of the key Chinese steel enterprises (and most likely the entire Chinese steel industry) peaks earlier, i.e. in year 2020 under low and medium steel scrap usage scenarios and in 2015 under high scrap usage scenario (Figure 3).

Figure 3. Total final energy use in key medium- and large-sized Chinese steel enterprises under each scenario (2000-2030)

Figure 3. Total final energy use in key medium- and large-sized Chinese steel enterprises under each scenario (2000-2030)

Energy intensity reduction of the production processes and structural shift from Blast Furnace/Basic Oxygen Furnace (BF-BOF) to Electric Arc Furnace (EAF) steel production plays the most significant role in the final energy use reduction. The decomposition analysis results showed what contributed to the reduction in the final energy use and its peak under each scenario. Figure 4 shows an example of results for Medium scrap usage scenario. 

The three scenarios produced for the forward looking decomposition analysis up to 2030 showed the structural effect is negative (i.e. reducing the final energy use) during 2010-2030 because of the increase in the EAF share of steel production in this period. Similarly, the pig iron ratio effect reduces the final energy use of key steel enterprises because of reduction in the share of pig iron used as feedstock in EAF steel production during this period. High scrap usage scenario had the largest structural effect and pig iron ratio effect because of higher EAF steel production and lower pig iron use in EAFs in this scenario.

Figure 4. Medium scrap usage scenario: Results of prospective decomposition of final energy use of key medium- and large-sized Chinese steel enterprises up to 2030

Figure 4. Medium scrap usage scenario: Results of prospective decomposition of final energy use of key medium- and large-sized Chinese steel enterprises up to 2030

The intensity effect also played a significant role in reducing final energy use of steel manufacturing during 2010-2030. This is primarily because of the energy intensity assumptions for production processes in 2020 and 2030. While the realization of such energy intensity reduction is uncertain and remains to be seen in the future, the aggressive policies by the Chinese government to reduce the energy use per unit of product of the energy intensive sectors, especially the steel sector, are a promising sign that the Chinese steel industry is moving towards those energy intensity targets. The “Top-10,000 Enterprises Energy Saving Program” and the “10 Key Energy Saving Projects Program” along with other policies and incentives in the coming years will significantly help to reduce the energy intensity of the steel industry in China.

More details of our analysis and results are presented in our report that is published on LBNL’s website and can be downloaded from this Link.

Please feel free to contact me if you have any question. Don't forget to follow us on LinkedInFacebook, and Twitter to get the latest about our new blog posts, projects, and publications.

Some of our related publications are:

  1. Hasanbeigi, Ali; Arens, Marlene; Rojas-Cardenas, Jose; Price, Lynn; Triolo, Ryan. (2016). Comparison of Carbon Dioxide Emissions Intensity of Steel Industry in China, Germany, Mexico, and the United States. Resources, Conservation and Recycling. Volume 113, October 2016, Pages 127–139
  2. Zhang, Qi; Hasanbeigi, Ali; Price, Lynn; Lu, Hongyou; Arens, Marlen (2016).  A Bottom-up Energy Efficiency Improvement Roadmap for China’s Iron and Steel Industry up to 2050. Berkeley, CA: Lawrence Berkeley National Laboratory. LBNL- 1006356
  3. Morrow, William; Hasanbeigi, Ali; Sathaye, Jayant; Xu, Tengfang. 2014. Assessment of Energy Efficiency Improvement and CO2 Emission Reduction Potentials in India’s Cement and Iron & Steel Industries. Journal of Cleaner Production. Volume 65, 15 February 2014, Pages 131–141
  4. Hasanbeigi, Ali; Price, Lynn, Aden, Nathaniel; Zhang Chunxia; Li Xiuping; Shangguan Fangqin. 2014. Comparison of Iron and Steel Production Energy Use and Energy Intensity in China and the U.S. Journal of Cleaner Production, Volume 65, 15 February 2014, Pages 108–119
  5. Hasanbeigi, Ali; Morrow, William; Sathaye, Jayant; Masanet, Eric; Xu, Tengfang. (2013). A Bottom-Up Model to Estimate the Energy Efficiency Improvement and CO2 Emission Reduction Potentials in the Chinese Iron and Steel Industry. Energy, Volume 50, 1 February 2013, Pages 315-325
  6. Hasanbeigi, Ali; Arens, Marlene; Price, Lynn; (2013). Emerging Energy Efficiency and CO2 Emissions Reduction Technologies for the Iron and Steel Industry. Berkeley, CA: Lawrence Berkeley National Laboratory BNL-6106E.

 

References

Editorial Board of China Iron and Steel Industry Yearbook (EBCISIY). Various years. China Iron and Steel Industry Yearbook. Beijing, China (in Chinese).

Hasanbeigi, A., Price, L., Aden, N., Zhang C., Li X., Shangguan F. 2011. A Comparison of Iron and Steel Production Energy Use and Energy Intensity in China and the U.S. Berkeley CA: Lawrence Berkeley National Laboratory Report LBNL-4836E.

NBS. 2015a. China Energy Statistics Yearbook 2015. Beijing: China Statistics Press.

NBS. 2015b. China Statistical Yearbook 2015. Beijing: China Statistics Press.

World Steel Association (worldsteel). 2016. Steel Statistical Yearbook 2016.