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Green Steel

January 27, 2021
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By Paul Homewood

 

 

 There was some discussion on Harrabin’s thread yesterday about “green steel”, supposedly a new process which was going to save the planet!

 

 image

https://twitter.com/RHarrabin/status/1353608178735468544

 

The link refers to something called DRI (Direct Reduced Iron), through which iron ore can be reduced (the oxygen taken out) by heating to around 800C with hydrogen, producing sponge iron.

The idea is that this can be fed into steel furnaces instead of pig iron produced by blast furnaces using coke. (Carbon is added in the steel furnace).

What the Harrabin’s green cronies don’t seem to realise is that DRI is not a new invention, far from it. There is still, for instance, a DRI plant in Hamburg, run by Arcelor, which was constructed in 1971.

World DRI output reached 108 million tonnes in 2019, but this is tiny in comparison to world steel production of 1869 million tonnes.

image

https://www.midrex.com/wp-content/uploads/Midrex-STATSbook2019Final.pdf 

 

The only difference is that these existing plants use coal or gas, instead of hydrogen.

DRI does have certain advantages. For instance, blast furnaces are only really economically viable as part of large integrated steelworks. On the other hand, smaller DRI units can operate alongside mini-mills.

It is also true that blast furnaces need good quality coking coal. It is noticeable on the above chart that Iran, Russia, Mexico and Saudi top the list, all with access to cheap gas supplies. Equally India at the top has plenty of coal, and non-coking coal can be used as a reductant.

However the fact that DRI is still a bit part player tells you all you need to know about its competitiveness. After all, if was such a good process, steelmakers around the world would be queuing up to install them.

Hydrogen, particularly from electrolysis, is several times the cost of natural gas, so this new “green steel” is likely to be extremely uncompetitive. And that is before we consider the implications of intermittent wind power!

There is also another factor. Coke ovens produce gas as part of the process, and this is used in other parts of the steelworks, such as rolling mills. DRI does not have this benefit, so extra energy would be required.

 

The clamour for new DRI plants in Europe ignores economic realities. The European steel industry has stagnated in recent decades, in the face of cheap imports. Steelmakers neither have the money nor profit incentive to spend tens of billions replacing existing kit.

Even more so, as producers in China, India and the rest of the world are unlikely to follow suit, thus increasing the competitive gap.

The cost of new investment will either have to be funded by taxpayers, or made profitable with the help of carbon taxes and high import tariffs. Either way, Europeans will pay the bill via higher taxes and/or inflation.

In the long run, with the help of policies such as these, Europe will increasingly become an irrelevant, self obsessed backwater. Nobody will want to buy its expensive exports, which in any event will be badly hit by retaliatory tariffs by China and elsewhere. And Europeans will not be able to afford to import.

Meanwhile Asia will plough ahead, supplying the rest of the world with what it wants.

Too pessimistic? We actually have a very comparable example in recent history – the USSR.

For different reasons, the Soviet economy became less and less competitive and efficient, as it looked ever more inward. Industry suffered from a lack of investment, and became increasingly obsolete. Bloated centralised bureaucracy sapped any entrepreneurial spirit and innovation. And its citizens grew ever poorer in relative terms.

This is Harrabin’s bright new future.

10 Comments
  1. Chaswarnertoo permalink
    January 27, 2021 2:53 pm

    It’s not a glitch, it’s a feature.

  2. Adolf Galland permalink
    January 27, 2021 2:54 pm

    Anyone can float an idea and pretend it is valid. Hydrogen reduction is already used in a number of hydrometallurgical process for recovery/ purification of metals. The practial realities of using this in a blast furnace situation are incredible complex and will need massive investment to prove – if possible.

  3. bluecat57 permalink
    January 27, 2021 3:30 pm

    You have a misspelling in the headline. It is spelled: steAl

  4. Christopher Hall permalink
    January 27, 2021 3:40 pm

    I wonder where all the hydrogen will come from to replace coal, oil and gas used to make 1.9 billion tonnes of steel each year. Not to mention the green electricity required to make it. Thats what happens when you let an English graduate, not a scientist, loose in the real world.

  5. Ray Sanders permalink
    January 27, 2021 4:10 pm

    If you want a good laugh have a look at the Linkedin profile of John Ranford.
    https://www.linkedin.com/in/john-ranford-66a11723/?originalSubdomain=uk
    An arts grad trying to sound like an engineer has to rank as just plain insulting.

  6. Harry Passfield permalink
    January 27, 2021 5:57 pm

    Harrabin’s bright new future would be if the PTB in the BBC would realise that all his green reports are being scientifically, financially and statistically eviscerated by our host and his followers. They, the BBC, might wonder what is the point of paying his salary?
    Silly question. They need useful idiots.

  7. January 27, 2021 10:02 pm

    Five percent of global steel production is not inconsiderable for a process that is developing technically and taking advantage of cheap gas supplies. From 30 million tons to 1 billion tons in the last decade for the Midrex process represents a steep growth trajectory.

    If one has cheap gas and can supplement with cheap wind or solar, presuming that’s possible without subsidy, the alternative feed overcomes the intermittency problem, and cheap iron on hand, and given the fact that this process can work economically at small scale, it could be attractive to many countries trying to value add, including the north west of Western Australia.

    So, there could be advantages in this mode of steelmaking other than promoting it as a means to solve the non-problem of planetary heating in spring, winter and autumn in the winter hemisphere……and that is what this ‘global warming’ actually constitutes, warming that increases the length of the growing season.

    So the hydrogen possibility, as an expensive energy feed, is irrelevant. And the addition of the expensive intermittent sources of energy just adds unnecessary complexity.

    And then there is the probability that iron ore dust accumulates on the solar panels and gets into the bearings that reduce the friction in all the moving parts. It’s a very dusty business carried on in very hot dry environments.

    • January 28, 2021 9:40 am

      It’s not 1 billion tonnes, Erl, but 100 million

      • January 28, 2021 3:17 pm

        My error Paul.

        Direct reduction produced 108 million tons in 2019 with a 49% increase in Direct Reduction production since 2015. The Midrex fraction growing by 44% over the same period and accounting for about 60% of all steel produced by Direct Reduction.

        Direct reduction amounted to 6% of global steel production in 2019.

        Globally, all processes produced 1.86 billion tons with 56% coming from China.

        All steel production growth between 2015 and 2019 was just 15%. So although a minor part of the total at just 6% DR is growing about 8 times faster than the total.

        As I read it, Direct Reduction enables small players with cheap fuel (gas and coal) to get into the market in a small way. As you report above the technology is not new, but is being improved continuously.

        And the product is sponge iron that is best transported hot, directly from the reduction furnace, into an electric arc furnace, and then into a mini rolling mill thereby saving energy in the production of a range of products for a local market.

        Otherwise, the product is very subject to rusting and has to be transported in sealed containers with the exclusion of moisture and oxygen. Can even explode.

        So, it will have limited application.

        And hydrogen is not cheap like natural gas straight out of the ground.

  8. tom0mason permalink
    January 27, 2021 10:35 pm

    This Harrabin chap seems to know jack-$hit about phucall. But then again I may be overestimating his merger potential.

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