Iron and steel industry

3 Key Manufacturing Sectors to Target for Reaching Paris Agreement's Goal

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According to IPCC, the industry sector accounts for about a quarter of the world’s total anthropogenic greenhouse gas (GHG) emissions (after allocating electricity-related emission to end use sectors). This is by far greater than GHG emissions from the Building and Transportation sector, yet these two sectors often get more attention than the industry sector.

AFOLU: Agriculture, Forestry and Other Land Use Figure 1. The share of GHG emissions by economic sector (IPCC 2014)

AFOLU: Agriculture, Forestry and Other Land Use
Figure 1. The share of GHG emissions by economic sector (IPCC 2014)

Unlike building and transportation sector, the manufacturing sector is more complex which involves tens of industry subsectors that are vastly different from each other with regards to the production technologies and systems they use. It looks like this complexity drives many people and organizations away from the industry sector. However, without seriously tackling the energy use and GHG emissions in the industry sector, we will absolutely fail to meet the goals of Paris Climate Agreement.

Within the industry sector, there are many industry subsectors. Figure 2 below shows a high-level classification of industry subsector. Among these, there are only 3 industry subsectors that account for over 62% of total final energy use in industry sector worldwide. These three sectors are:

  1. Iron and steel industry
  2. Chemical and petrochemical industry
  3. Non-metallic minerals industry, which is mainly the cement industry, but also includes glass, lime and other smaller subsectors

In terms of GHG emissions, these three manufacturing subsectors, i.e. iron and steel industry, chemical and petrochemical industry, and cement industry account for even larger share, over 65% of total industry sector GHG emissions. This is because of high levels of non-energy related GHG emissions (or process emissions) from these three subsectors particularly the cement industry. Worldwide, around 63% of total GHG emissions from the cement industry is process-related emissions (from chemical reaction during calcination process), which are not included in the Figure 2 below.

Figure 2. The share of different industry subsector from total industry use in the world in 2014 (IEA 2017a)

Figure 2. The share of different industry subsector from total industry use in the world in 2014 (IEA 2017a)

What makes the matter worse is the high share of fossil fuels, especially coal used in the industry sector. Coal accounts for over 75% of the final energy used in the steel industry worldwide with another 10% of energy coming from natural gas and oil (IEA 2017a). In the cement industry worldwide, coal account for over 60% final energy use and natural gas and oil account for another 15% of total energy use (IEA 2018).

The other point to keep in mind is that with world’s population increasing from 7.6 billion in 2018 to around 10 billion people in 2050 with majority of population increase to happen in developing economies, the absolute demand for cement, steel, and chemicals is expected to increase significantly by 2050.

While many people are hoping that we will clean the electricity grid and then electrify almost everything, thereby addressing the climate change issue, this is far more complex in manufacturing sector compared with the building and transportation sector. First, as mentioned above, industry sector with many subsectors which are quite different technologically will need many different types of electrification technologies. Second, around 74% of the final energy used in industry sector is fuel from which almost 48% is used for high temperature heat (above 400 Degrees Celsius) most of which is used in the steel and cement industry among others (Figure 3).  Electrifying this high temperature heat demand has proved to be difficult in these 3 industry subsectors.

Figure 3. Share of energy use by economic sector (left) and breakdown of heat demand in industry (right) (IEA 2017b)

Figure 3. Share of energy use by economic sector (left) and breakdown of heat demand in industry (right) (IEA 2017b)

In summary, without decarbonizing the iron and steel, chemical and petrochemical, and cement industry, it is impossible to reach the Paris Climate Agreement’s goals and peak the total GHG emissions early enough to keep the temperature rise below 2 degrees Celsius. Therefore, we need more focused attention by public and private sectors as well as NGOs and philanthropists to gather and allocate resources to reduce GHG emissions in these 3 industry subsectors. The time is running out with regards to climate change mitigation timeline and peaking world’s GHG emissions. We need to focus on areas where we can get huge savings and gigaton scale GHG emissions reduction.  If we don’t, scientists have given us some clear dire warnings!

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Also read our related blog posts:

See the list of some of our related publications for the iron and steel, cement, and chemical industry from this link.

Sources:
IEA/WBCSD. 2018. Technology Roadmap-Low-Carbon Transition in the Cement Industry.
IEA. 2017a. Global Iron & Steel Technology Roadmap.
IEA. 2017b. Renewable Energy for Industry.
IPCC. 2014: Summary for Policymakers. In: Climate Change 2014: Mitigation of Climate Change.

 


Infographic: The Embodied Carbon in Global Steel and Cement Trade

Authors: Ali Hasanbeigi, Daniel Moran, Prodipto Roy

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President Trump just signed an executive order to impose a 25% tariff on steel imports and 10% on aluminum imports to the U.S. While many people are discussing how this can lead to a trade war between certain nations, we decided to take a look at it through the lens of embodied carbon in traded goods.

The UNFCCC’s greenhouse gas (GHG) accounting system works on the basis of national production rather than consumption of emissions. This means that when goods are traded, their embodied emissions (e.g. emissions associated with manufacture) are also traded. However, these imported emissions are not counted towards a country’s reported climate impacts. It is estimated that around 25% of global CO2 emissions comprise goods and services which have been internationally traded.

In the recent study on Embodied Carbon in Globally Traded Goods funded by the ClimateWorks Foundation, Global Efficiency Intelligence, LLC. and KGM & Associate Ltd. use the most recent available data and a cutting-edge model to conduct a global assessment of the extent of the embodied carbon in globally traded goods, so-called carbon loophole. In addition, we have conducted a series of higher-resolution, deeper dive case studies into a few key sectors and geographies of most importance, including steel and cement.

The infographic below summarizes some of our key findings related to deep-dive analysis we conducted for embodied carbon in global steel and cement trade. As it is illustrated, steel trade accounts for a significant amount of embodied carbon in trade. Even though China doesn’t feature in the top three steel import sources for the United States (Canada, Brazil, and South Korea occupy the top three spots), China still accounts for 40% of carbon embodied in the global commodity steel extra-regional trade, and 27% of carbon embodied in overall commodity steel trade.

One of the frustrations of U.S. steelmakers, which led to their support of the U.S. tariff, was China systematically overproducing subsidized steel and flooding the international markets. Furthermore, many steel manufacturers in China and other steel exporting countries like the Commonwealth of Independent States (CIS) produce a comparable unit of steel using significantly more carbon and energy than their cleaner counterparts in their own country or region. We see this disparity of carbon use in production not only in countries like China but also within different states in the U.S.

A tool like the U.S. tariff on steel imports could be good for the climate and the economy if it was based on the carbon footprint of the steel imported and was not just implemented as a blanket tariff. In fact, California recently passed the Buy Clean legislation (AB 262), 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. This could be an example of environmental- and climate-friendly procurement and trade tariffs that level the playing field and can benefit both industry and the environment and incentivize high polluting companies that are out-of-state or out-of-country to clean up their production in order to be able to trade with these states or countries.

The study on Embodied Carbon of Globally Traded Goods will be published in September 2018.

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

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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.

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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.

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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

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

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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.