Electrifying Circularity: EAF Technology and Circular Economy in the Steel Industry's Net Zero Journey

Modern civilization relies on the steel industry. However, traditional production methods in steel industries pose a significant danger to climate change. Since the industry mostly relies on blast furnace-basic oxygen furnace (BF-BOF) steelmaking process which extensively depends on fossil fuel, the industry is responsible for ~7-8% of global GHG emissions. Therefore, the sector requires radical transformation to realize net zero emissions. Two powerful allies are now working together intending to transform the steel industry into one that has less harm on the environment: Electric Arc Furnace (EAF) technology and Circular Economy principles.

EAF Technology: A Cleaner Alternative

The steelmaking method significantly contributes to greenhouse gas emissions with a portion (~85%) coming from the carbon-intensive nature of the BOF process. Around 2.3 tons of CO2 is generated per ton of crude steel produced in the BOF method resulting in an average emission of 1.8 tons of CO2 per ton of crude steel produced. With global crude steel production reaching a staggering 1.9 billion tons in 2022, this translates to a concerning 3.42 billion tons of carbon dioxide (CO2) emissions annually, highlighting the urgent need for cleaner steelmaking technologies.

Electric arc furnaces (EAFs) offer a compelling alternative. Unlike blast furnaces that depend on coking coal to produce heat and reduce iron ore, EAFs utilize electricity to melt scrap steel. The global share of EAF steelmaking has been steadily increasing, reaching 30% in 2022. This trend is projected to continue as countries and businesses aim for cleaner steel production methods. Countries such as Italy and Turkey showcase a share of EAF steel production surpassing 70% indicating the feasibility of of a large-scale shift towards EAF technology.

EAF steel production generates roughly about 0.4 - 0.6 tons of CO2 emissions for every ton of crude steel produced representing a reduction of 70 - 80% compared to the BF BOF process. This substantial decrease is attributed to the absence of fossil fuel combustion for heat generation. Moreover, EAFs are 75% more energy efficient than blast furnaces due to the efficiency of electricity generation compared to burning fossil fuels with the growing use of renewable energy sources. As a result, employing EAFs could lead to a 30 - 40% decrease in energy demand compared to BF BOF methods.

Circular Economy: Closing the Loop

The circular economy emphasizes keeping resources in use for as long as possible, minimizing waste generation, and maximizing the use of recycled materials. Applied to steel production, this translates to a multi-pronged approach.

• Increased Scrap Steel Recycling:  EAFs rely on scrap steel for feedstock. A robust circular economy ensures a steady supply of high-quality scrap steel through efficient collection, sorting, and processing infrastructure. In 2022, nearly 650 MT of scrap steel were used in steel production leading to the prevention of nearly 950 MT of CO2 emissions. China continued to be the largest consumer of recycled steel for steel production (225 MT) followed by the United States (56.6 MT) and the European Union (55.9 MT). When it comes to the proportion of recycled steel used in crude steel production, Turkey leads with 86% scrap consumption while the United States, European Union, and Russia follow at 70%, 41%, and 41%.

• Design for Disassembly and Reuse:  When designing products, the industry should consider disassembly and component’s reusability. This allows steel components to be easily recovered and reintroduced into the production cycle, further reducing reliance on virgin ore extraction.

• Extending Steel Product Lifespan:  Proper maintenance and repair of steel structures like bridges and buildings can significantly extend their lifespan, reducing the need for new steel production and associated emissions. According to the American Galvanizers Association, over 90% of galvanized steel infrastructure in North America is still in service after 50 years. This highlights the potential for extending steel product lifespans through proper maintenance.

The Synergy Between EAF and Circular Economy

EAF technology and the circular economy together create a powerful synergy to reduce carbon emissions in the steel industry. By combining the EAF technology with recycling rates, overall carbon footprint of steel production can be dramatically reduced. This combination could lead to a 50-80 % reduction in CO2 emissions compared to traditional BF-BOF methods. Moreover, embracing a circular steel economy lessens dependence on extracting virgin ore, a process known for its detrimental environmental and social impacts. Transitioning to a fully circular steel economy could potentially reduce reliance on virgin ore by nearly 80%. The European Union sets an example with its commitment to achieving a closed-loop steel economy by 2050, driving advancements in recycling technologies and design principles that enhance steel circularity. In addition, various steel companies are actively investing in clean EAF technology and collaborating with waste management companies to secure a supply of high-quality scrap steel. For instance, ArcelorMittal, a leading steel producer aims to increase its EAF steelmaking capacity to 40% by 2030.

The Road ahead involves Challenges:

While the potential for EAF technology and the circular economy in steel production is undeniable, there are challenges to overcome:

• High upfront investment: EAF technology requires significant upfront capital expenditure compared to BF-BOF plants. Government support and collaboration within the industry can be beneficial to mitigate this challenge.

• Grid capacity and renewable energy:  The widespread adoption of EAFs will demand a robust and reliable electricity grid with a high share of renewables to minimize the carbon footprint of electricity generation.

• Scrap quality and availability:  High-quality scrap is crucial for efficient EAF operation. Improving the infrastructure for scrap collection and sorting, along with implementing design principles that facilitate disassembly in steel products will play a key role in this process.

The combination of EAF technology and the principles of the circular economy offers a powerful pathway for the steel industry to achieve net zero emissions and a sustainable future. By addressing the challenges of scrap steel quality, infrastructure development, design for disassembly, and consumer behaviour through collaborative efforts and innovative solutions, the steel industry can transform into a responsible and environmentally conscious sector, ensuring a strong and sustainable future for generations to come.