Iron & steel
Driven by population and GDP growth, global demand for steel has been growing strongly in recent years and is expected to continue to increase, especially because of economic expansion in India, ASEAN countries and Africa, even as demand in China gradually declines.
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The steel sector is currently highly reliant on coal, which is primarily used to as a reducing agent to extract iron from iron ore and to provide the carbon content needed in steel.
While the energy intensity of steel has gradually fallen in the past decade, expanding production has generally raised total energy demand and CO2 emissions. Short-term CO2 emissions reductions could come largely from energy efficiency improvements and increased scrap collection, which would enable more scrap-based electric arc furnace production (considerably less energy-intensive than primary production).
Even with higher recycling rates, scrap availability will put an upper limit on the potential for recycled production. Adopting material efficiency strategies to reduces losses and optimise use across value chains can curb demand growth and thus help in reducing CO2 emissions from the steel manufacturing. Material efficiency strategies include increasing steel and product manufacturing yields, lightweighting vehicles, extending building lifetimes and directly reusing steel (without melting).
Longer-term emissions reductions would require a step change in the way primary steel is produced through the adoption of new direct reduced iron and smelt reduction technologies that facilitate the integration of low-carbon electricity (directly or through electrolytic hydrogen) and CCUS.
While the energy intensity of steel has gradually fallen in the past decade, expanding production has generally raised total energy demand and CO2 emissions. Short-term CO2 emissions reductions could come largely from energy efficiency improvements and increased scrap collection, which would enable more scrap-based electric arc furnace production (considerably less energy-intensive than primary production).
Even with higher recycling rates, scrap availability will put an upper limit on the potential for recycled production. Adopting material efficiency strategies to reduces losses and optimise use across value chains can curb demand growth and thus help in reducing CO2 emissions from the steel manufacturing. Material efficiency strategies include increasing steel and product manufacturing yields, lightweighting vehicles, extending building lifetimes and directly reusing steel (without melting).
Longer-term emissions reductions would require a step change in the way primary steel is produced through the adoption of new direct reduced iron and smelt reduction technologies that facilitate the integration of low-carbon electricity (directly or through electrolytic hydrogen) and CCUS.
Last updated Aug 28, 2020
Key findings
Direct CO2 intensity in iron and steel, 2000-2018
OpenInnovation will be crucial to decarbonise iron and steel production
In 2017, the energy intensity of crude steel fell by 2.2%, compared with an average 0.7% annual decline from 2010 to 2016. While the 2017 improvement is positive, it resulted from increased scrap-based production and energy efficiency improvements, rather than from a transformative change towards low-carbon steel production methods. The steel sector is currently highly reliant on coal, which supplies 75% of energy demand. The energy intensity of crude steel needs to decline by 1% annually during 2017‑30 to be on track with the Sustainable Development Scenario.
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The IETS TCP focuses on energy use in a broad range of industry sectors with significant potential for emissions and cost savings. The IETS TCP work programme ranges from aspects relating to development of processes and energy technologies, to overall system analysis and energy efficiency in industry sectors.