{"id":1172,"date":"2022-04-18T12:58:38","date_gmt":"2022-04-18T17:58:38","guid":{"rendered":"https:\/\/arc-group.com\/asia-steel-sustainability\/"},"modified":"2025-02-18T10:09:09","modified_gmt":"2025-02-18T15:09:09","slug":"asia-steel-sustainability","status":"publish","type":"post","link":"https:\/\/arc-group.com\/asia-steel-sustainability\/","title":{"rendered":"Greening Steel in Asia: A Race for Innovation"},"content":{"rendered":"

Given the growing support from governments and major consumers of the steel industry \u2013 construction, automotive, and household appliances – the green steel market is developing at a rapid pace. Our insight looks at the current development of green steel in top Asian markets \u2013 as they race to reach net-zero emissions.<\/p>\n

Despite steel being one of the most recycled materials on the planet, the extraction of iron ore and other elements used for steelmaking make the industry one of the most carbon-intensive industries on Earth. Iron and steelmaking represent between 7% and 9% of global greenhouse gas emissions<\/a>. Sustainable steelmaking requires technology performance improvements and material efficiency. In the long term, innovative technologies would be required for adoption. These include carbon capture, utilization, and storage (CCUS) and production using hydrogen (either as an auxiliary reducing agent in a blast furnace (H2-BF) or as the sole reducing agent (H2-DRI) in a process known as a direct reduction of iron).<\/p>\n

Asia\u2019s Bid To Green Its Steel Industry<\/h3>\n

Asia controls a large percentage of the world\u2019s production of steel. China, India, Japan, and South Korea made the top 10 list of steel producers globally. The four countries\u2019 combined production of crude steel accounted for nearly 68% of the world\u2019s total production in 2021. The whole continent, as estimated by the World Steel Association, was responsible for 74% of the crude steel produced globally.<\/p>\n

\"Chart<\/p>\n

The steelmaking industry in China accounts for about 15% of the country\u2019s total carbon emissions, the same number is 14% for Japan and 12% for India. To accelerate the industry\u2019s transition to cleaner infrastructure, well-designed policies and regulations by the governments are much needed. The Chinese government has set a deadline that the country should reach peak emissions by 2030, 30 years before the targeted date to reach carbon neutrality. The country has been intentionally curbing its steel production to tackle carbon emissions. In 2021, China’s steel production levels finally fell for the first time in 6 years, dropping by 3% year-on-year. The steel output curb is expected to continue, at least until the production of green steel is in place.<\/p>\n

At the COP26 climate conference in November 2021, India, Japan, and South Korea backed the Glasgow Breakthrough protocol to decarbonize steel by accelerating the development and deployment of clean technologies and sustainable solutions. The countries also established roadmaps for the national decarbonization of the industry.<\/p>\n

Top Steelmakers Pledge to Meet Their Governments\u2019 Targets<\/h3>\n

The majority of the top steelmaking players have announced their commitment to reach net-zero emissions. Multiple projects were released in recent years, characterized by large investments and global partnerships.<\/p>\n

\"Table<\/p>\n

The world\u2019s top steel producer – China Baowu, has established<\/a> a Low Carbon Metallurgy Innovation Center and a Global Low Carbon Metallurgical Innovation Alliance with partners to promote the green, low-carbon transformation of the steel industry. Consisting of 52 members, including enterprises, universities, and institutes from 15 countries, China Baowu\u2019s Alliance includes some of the top industry players ArcelorMittal, Rio Tino, BHP Group, Thyssenkrupp as its members.<\/p>\n

In 2020, Australian mining giant Rio Tinto, together with China Baowu, entered an R&D partnership<\/a> with Tsinghua University to develop and implement methods to reduce carbon emissions in the steel industry. An investment of 13 million USD will be used to fund a low-carbon raw materials research and development centre. Rio also announced its plans to partner with Japanese Nippon Steel<\/a> to develop similar technologies. The project intends to become aligned with Japanese climate ambitions, which include reaching net-zero emissions by 2050.<\/p>\n

In 2020, the world\u2019s largest mining enterprise BHP also announced its investment of 35 million USD<\/a>, which aims to develop low-carbon technologies and pathways to reduce emission intensity in integrated steelmaking. BHP will join forces with China Baowu in a five-year-long partnership. The research themes include investigating the deployment of carbon capture, utilization, and storage at one of China Baowu\u2019s production bases. BHP also signed a Memorandum of Understanding (MoU) with China\u2019s second-largest steel producer \u2013 HBIS, to invest 15 million USD<\/a> for the same purpose in 2021. The partnership will prioritize the development of three main areas: hydrogen-based direct reduction technology, recycling and reusing steelmaking slag, and iron ore lump utilization.<\/p>\n

In 2021, HBIS implemented the world\u2019s first Direct Reduced Iron (DRI) production plant<\/a> in China, using \u201cENERGIRON\u201d technology, developed by Tenova and Danieli. The technology is powered by hydrogen and significantly reduced CO2 emissions in steel making. The final carbon footprint goal will be 125 kg of CO2<\/sub> per ton of steel, a significant reduction compared to the current average of 1.85 tons of CO2<\/sub><\/a> emitted for every ton of steel.<\/p>\n

In 2021, POSCO, along with South Korean giants Hyundai Motor, SK Group, Hanwha, and Hyosung, announced they will invest a total of 38 billion USD to boost the country\u2019s hydrogen economy<\/a> by 2030. The move came on the back of the \u201cHydrogen Economy Promotion and Hydrogen Safety Management Act\u201d, the world\u2019s first-ever hydrogen law, passed by South Korea in 2020. In December 2020, POSCO also unveiled plans to build a hydrogen production facility with a capacity of 5 million tons per year by 2050.<\/p>\n

In March 2022, Baowu contracted Tenova for designing and supplying a hydrogen-based ENERGIRON DRI plant<\/a> with an annual capacity of 1,000,000 tons\/year. Located in the Zhanjiang Economic and Technological Zone, Guangdong, the plant will be the largest hydrogen DRI facility in China.<\/p>\n

The current transition to sustainable infrastructure is thus far only at its preliminary phase in Asia, and the governments are still rolling out support policies to encourage decarbonization. However, large importers of steel products such, as Europe and the US, are setting up more stringent policies and increasing tariffs on products with carbon-intensive manufacturing processes. This urges companies to rush their transition to remain competitive on an international level. The need for changes in the near future has provided strong momentum for green investment and financing in Asia, both cross-border and domestically.<\/p>\n

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Read more about our industrial goods & services<\/a>\u00a0experience or our other consulting services<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Given the growing support from governments and major consumers of the steel industry \u2013 construction, automotive, and household appliances – the green steel market is developing at a rapid pace. Our insight looks at the current development of green steel in top Asian markets \u2013 as they race to reach net-zero emissions. Despite steel being […]<\/p>\n","protected":false},"author":3,"featured_media":1173,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[15,16],"tags":[],"news_type":[42],"class_list":["post-1172","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-china","category-market-insights","news_type-insights"],"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/arc-group.com\/wp-json\/wp\/v2\/posts\/1172","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/arc-group.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/arc-group.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/arc-group.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/arc-group.com\/wp-json\/wp\/v2\/comments?post=1172"}],"version-history":[{"count":6,"href":"https:\/\/arc-group.com\/wp-json\/wp\/v2\/posts\/1172\/revisions"}],"predecessor-version":[{"id":8174,"href":"https:\/\/arc-group.com\/wp-json\/wp\/v2\/posts\/1172\/revisions\/8174"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/arc-group.com\/wp-json\/wp\/v2\/media\/1173"}],"wp:attachment":[{"href":"https:\/\/arc-group.com\/wp-json\/wp\/v2\/media?parent=1172"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/arc-group.com\/wp-json\/wp\/v2\/categories?post=1172"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/arc-group.com\/wp-json\/wp\/v2\/tags?post=1172"},{"taxonomy":"news_type","embeddable":true,"href":"https:\/\/arc-group.com\/wp-json\/wp\/v2\/news_type?post=1172"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}