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Carbon reduction methods for steel: deepening structural reform, converting blast furnace to electric furnace

April 21,2023

With the intensification of global climate issues and the enhancement of environmental awareness, "low-carbon economy" has become an important issue in the global economic situation. As one of the world's largest carbon emitters, effective data from the China Carbon Accounting Database (CEADs) shows that in 2022, China's cumulative carbon emissions amounted to 11 billion tons, accounting for approximately 28.87% of global carbon emissions. Among them, industrial emissions amounted to 4.2 billion tons, accounting for 38.18% of the national emissions, second only to the power industry's emissions of 5.1 billion tons, accounting for 46.37%.

As of 2021, China's crude steel production reached 10.33 billion tons, accounting for 54% of global production. Among them, the crude steel production of electric furnaces is 1.09 billion tons, accounting for only 19.4% of the global crude steel production of electric furnaces, while the steelmaking ratio of electric furnaces in China is only 10.58%, far lower than the average level of countries in North America and Europe, and even lower than the level of Africa. In addition, from the trend of changes in the domestic crude steel production structure, it can be seen that at the beginning of 2020, due to the continuous increase in blast furnace steelmaking output, the proportion of electric furnace steelmaking continued to decline, and remained low from 2013 to 2016. Since the start of supply side structural reform in 2016, the proportion of electric furnace steelmaking gradually rebounded, and then remained around 10%. It is worth noting that in 2021, the crude steel production of electric furnaces has increased, while the steel production of blast furnaces has decreased, reflecting to some extent that the current structural reform of the steel industry has achieved initial results.

At the beginning of 2023, the World Iron and Steel Association released the Sustainable Development Indicators Report (2022 Edition), which uses 8 indicators to measure the environmental performance of the global steel industry in the 2021 fiscal year.

In the fiscal year 2021, the carbon dioxide emission intensity of the steel industry was 1.91 tons of carbon dioxide per ton of steel.

In addition, the report also compares the environmental performance of different production processes. Among them, the environmental performance of Scrap EAF method based on scrap steel is 0.67 tons of carbon dioxide/ton of steel, the environmental performance of BF BOF method is 2.32 tons of carbon dioxide/ton of steel, and the environmental performance of DRI-EAF method is 1.65 tons of carbon dioxide/ton of steel.


It can be seen that the carbon dioxide emissions from the blast furnace converter steelmaking method are much higher than those from the arc furnace steelmaking method of scrap steel. If calculated according to international average standards, ignoring the proportion of direct reduced iron production in China, due to the large proportion of long-term blast furnace steelmaking in China, the carbon emissions per ton of steel are close to 2.1454 tons (0.67 tons) × 0.1058+2.32 × 0.8942) is much greater than the international average of 1.91 tons. Therefore, deepening the structure of the steel industry and increasing the proportion of short process production is one of the important means to effectively reduce carbon emissions.

One of the main tasks for the high-quality development of the steel industry is to develop electric furnace steelmaking in an orderly manner, encourage conditional blast furnace converter long process enterprises to transform and develop electric furnace short process steelmaking on site, and strive to achieve electric furnace steel production accounting for more than 15% of the total crude steel production by 2025. At the same time, the utilization of scrap steel resources in the steel industry will reach 300 million tons. Within 4 years, a proportion transformation of 10.58% to 15% and a utilization of 300 million tons of scrap steel resources will be completed, indicating a trend of upgrading smelting equipment in China. The replacement of blast furnace converter with scrap steel electric furnace will be the trend. According to statistics, the utilization rate of scrap steel resources in steelmaking has dropped to 72.92%, mainly due to an increase in overall resource supply and a decrease in electric furnace smelting.

At present, the cost and profit situation of electric furnace steelmaking are still important factors restricting the rapid development of short process in China, with short process profits consistently lower than long process profits. From the end of 2021 to the second half of 2022, electric furnace steelmaking has been experiencing long-term negative profits, but since November 2022, the profit gap between the long and short processes has significantly narrowed. However, from the overall trend, in the context of the increasing supply of depreciated scrap steel and high import iron ore prices, seeking breakthroughs in short process electric furnace steelmaking may alleviate steel mill losses while significantly reducing carbon dioxide emissions.

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