Two ‘Green Steel’ Processes Close to Commercial Viability

Carbon neutral steel production will be necessary to meet key climate indicators, and companies around the world are rising to the challenge.

The first delivery of fossil free steel from Hybrit. (Image: SSAB)

The first delivery of fossil free steel from Hybrit. (Image: SSAB)

Steel is the most commonly used metal globally, found in everything from buildings to airplanes and household appliances. For centuries, steel has been made using a traditional process whereby blast furnaces are fed with coal and iron ore. However, steel manufacturing is a leading producer of greenhouse gases and continues to drive the Climate Crisis, with around seven percent of global greenhouse gas emissions being attributable to steel production. Some metrics even indicate that if the steel industry were a country, it would be the world’s fifth largest producer of carbon.­­

Unfortunately, there are not many alternatives to steel when it comes to construction and manufacturing. Instead, engineers have been developing alternative methods to produce steel that emit little to no greenhouse gases. These new manufacturing processes are creating the “green steel” industry—or carbon neutral steel production—with factories already under construction in countries like Sweden and Spain.

How Do You Make Green Steel?

In traditional steel manufacturing, oxygen is removed from iron ore to produce pig iron. Then, to create crude steel, the pig iron is alloyed with other metals such as nickel or chromium. Finally, the steel is physically transformed into the desired shape for construction or appliances using steps that require both heating and cooling. These processes require massive amounts of energy, reaching temperatures of 1,000 degrees C or hotter. To hit these temperatures, the manufacturing process relies on burning coal, emitting a large amount of carbon dioxide in the process.

Although carbon capture technologies are one way to reduce the carbon footprint of steel production, many companies are looking to divest from fossil fuel production and are looking towards long-term sustainability strategies. Several solutions have been floated, including the common strategy of simply switching from conventional coal-powered blast furnaces to electric furnaces. Unfortunately, it’s not a one-for-one substitution—electric furnaces must be fed with recycled scrap steel, as they cannot produce steel from iron ore like blast furnaces. The main issue is scale, as there simply is not enough recycled scrap steel to meet global steel demand. A secondary issue is that the final product has reduced quality.

Instead, companies are turning toward two alternative processes to make pig iron: molten oxide electrolysis and hydrogen direct reduction. Neither is commercially available at scale, but projections indicate both industrial processes have the potential to meet global demand if steel companies are willing to invest in the transition.

Sweden’s Hydrogen-Powered Investment in Green Steel

For hydrogen-based steel production, hydrogen can be used instead of a coal-powered furnace to reduce iron ore to pig iron. However, an electric furnace still needs to be used to heat and shape the pig iron into the final steel product. Hydrogen itself also needs to be produced using electricity, creating an overall production process that is highly reliant on the grid. So, for truly “green” steel, the electricity supplying the plant also needs to come from renewable sources.

In Sweden, an expansion in battery manufacturing inspired the transition to hydrogen-powered steel production. In 2021, a company called Northvolt opened an electric battery factory near the town of Boden, Sweden. However, the company quickly realized that to reduce their environmental impact, they would need to find a more sustainable source of steel. A spin-off start-up company, H2 Green Steel, was then founded to bring “green steel” to all European manufacturing.

Currently, the first H2 Green Steel factory is under construction near Boden. The new steel manufacturing process is designed to cut greenhouse gas emissions by as much as 95 percent. With their new facility, H2 Green Steel is hoping to have commercial steel available by 2025 for European customers.

Instead of greenhouse gases, the hydrogen-powered process produces water vapor as a by-product. To generate the hydrogen required for the facility, H2 Green Steel will use water from a nearby river and pass it through an electrolyzer to separate the hydrogen from water molecules. Specifically for this facility, H2 Green Steel indicated that all the electricity used in their industrial processes would be generated by fossil-free energy sources, including hydropower and wind power, to ensure carbon neutral production.

Looking forward, H2 Green Steel is already developing a steel production plant powered by solar energy on the Iberian Peninsula in Spain.

With the long track record of green energy investment and development in Scandinavia, it’s no surprise that H2 Green Steel is not without competition in the nascent green steel industry. Another Swedish company, Hybrit, is in the process of opening its fossil-free manufacturing facility by 2026. Hybrit is funded in part by the Swedish Energy Agency and the European Union and is a joint venture of Nordic steel company SSAB, energy company Vattenfall and mining company LKAB.

Boston Metal Brings Green Steel to the US

U.S.-based Boston Metal is taking an alternative approach, using a process called Molten Oxide Electrolysis (MOE). The electrolysis process uses electricity to separate chemical compounds into their individual components, separating iron oxide from oxygen to make the pig iron used in steel manufacturing. The technology relies on Boston Metal’s unique inert anodes that can withstand high temperatures and corrosive environments during the electrolysis process.

Essentially, the technology involves immersing inert anodes into an electrolyte that also contains iron ore. By electrifying the anodes, the company can reach 1,600 degrees C, which splits the oxygen from iron ore without producing carbon or other greenhouse gas emissions. The electrolysis cells are about the size of a school bus, and the company is working on scaling the technology to be a viable, cost-competitive alternative to traditional steel manufacturing in the U.S. and beyond.

The key to the technology is the inert anodes themselves, which have a long service life, do not require significant maintenance and do not need to be switched out, ensuring continuous production and, according to Boston Metal, significant operational gains for steel manufacturers. The final product is a high-purity liquid metal that can be sent directly for metallurgy without any reheating.

Distinct from hydrogen-powered steel manufacturing, the Boston Metal process currently does not require any processing of water, rare-metal catalysts, or hazardous chemicals. If renewable electricity sources are used, the final product can be a carbon neutral steel.

An infographic from Boston Metal highlighting the difference in their production process compared to traditional steel manufacturing and hydrogen-powered steel production (Image: Boston Metal).

An infographic from Boston Metal highlighting the difference in their production process compared to traditional steel manufacturing and hydrogen-powered steel production (Image: Boston Metal).

An Ongoing Challenge of Achieving Production at Scale

Although it may not be surprising that Sweden is investing in green steel technology, there is a surprising move towards carbon-neutral steel production across Europe. Using similar technologies, GravitHy aims to open a hydrogen-powered plant in France in 2027. Industrial giant Thyssenkrupp has announced plans to reach carbon-neutral steel production by 2045, and steelmaker ArcelorMittal has ongoing investments in green steel. The EU is also introducing legislation that will make it more expensive for companies to import cheap, fossil fuel-derived steel from other countries.

Although the emerging green steel industry is exciting, it’s important to put it in the context of global steel production. The World Steel Association estimated global steel production in 2022 was about two billion metric tons. In comparison, H2 Green Steel hopes to produce about five million metric tons per year by 2030. A report from Basalt, Colo.-based sustainability consultant the Rocky Mountain Institute found that current international commitments to green steel manufacturing would only amount to about eight percent of global steel production (as of 2019). Although better than nothing, it’s a long way off from what is necessary to curb the greenhouse gases emitted by the industry.

The hope is that the early success of these companies will drive innovation in manufacturing and support cleaner production of raw materials. Where each company might represent a small fraction of what is needed annually, it’s a step in the right direction. This is especially true as traditional steel manufacturing considers repairs, refurbishment or expansion of legacy technologies and blast furnaces over the next few years. One key strategy is to incentivize companies to invest in long-term solutions, such as hydrogen-powered production, instead of temporary repairs to existing blast furnaces. With impending carbon taxes and the cost of renewable electricity trending down, it will soon make economic sense to transition to greener production processes and divest from legacy fossil