Emerging Techs 23/06/2025

Decarbonizing Steel Production

Steel is the backbone of modern infrastructure, playing a vital role in everything from buildings and bridges to vehicles and renewable energy systems. While iron—the primary component of steel—is one of the most abundant elements in the Earth’s crust and steel itself is infinitely recyclable, the demand for new steel continues to grow, especially in the context of the global energy transition. However, the conventional method of producing steel—by reducing iron oxide with coal or natural gas—is one of the most carbon-intensive industrial processes in the world. Every day, the equivalent of 700 Eiffel Towers in steel leaves factories, accompanied by massive CO₂ emissions.

Steel production has traditionally relied on coal, both as a fuel source and as a reductant for iron, making it the most significant environmental hotspot identified in Life Cycle Assessment.

The primarily adopted carbon vision can lead to overlooking other environmental issues including those related to the entire associated value chain (e.g., ties to hydrogen production and the energy production needed).

To meet climate goals, the steel industry must find a breakthrough: a scalable, sustainable method of iron reduction that avoids fossil fuels and greenhouse gas emissions, without creating new resource constraints. This is the challenge—and the opportunity—of fossil-free steel.

A solution to replace coal or natural gas could be charcoal which is, however, insufficient as feedstock because photosynthesis occurs too slowly for steel making. In addition, capturing and storing CO2 could not be scaled up to meet the need for production, hence current initiatives to find a breakthrough solution.

The goal would be to identify the physical principle that could be scaled up without creating resource availability problems and without GHG emissions.

Hydrogen-Powered Iron : the next generation of reduction

Pilots of H2 direct reduction of iron (H2DRI) and H2 plasma smelting reduction (HPSR) have been launched to use hydrogen or hydrogen in a plasma state to reduce iron ore into metallic iron respectively.

These technologies come with advantages, mainly environmental benefits, energy efficiency and flexibility but also with challenges: high renewable energy requirements, high grade iron ore required, economic viability as well as regulatory constraints and market acceptance.

Emerging Technologies beyond Hydrogen

Electrowinning

Electrowinning, also known as electroextraction, is an electrolytic process used to recover metals from their ores that have been dissolved in a solution.

Working principle:

Leaching: The metal ore is first dissolved in a solution through a process called leaching.
Electrolysis: An electrical current is passed through the solution using an inert anode and a cathode. The metal ions in the solution are reduced and deposited onto the cathode as pure metal.
Collection: The deposited metal is then collected from the cathode.

Molten Oxide Electrolysis (MOE)

Molten Oxide Electrolysis (MOE) is an innovative electrochemical process used to produce metals directly from their oxides.

Working principle:

Electrolysis Setup: The process involves an electrolytic cell where the ore is dissolved in a molten oxides.
Electrochemical Reaction: An electric current is passed through the cell, causing the metal ions to migrate to the cathode (negative electrode) where they are reduced to pure metal. Oxygen is released at the anode (positive electrode) as a byproduct.
Metal Production: The metal is produced in a liquid state, which can then be collected and processed further.

These technologies have more or less the same range of benefits: environment, energy efficiency, scalability and versatility. The challenges include maintenance requirements, energy intensity and specifically for electrowinning the need for high metal concentrations in the solution and possible competing reactions of other metals present in the solution.

Environmental analysis and social acceptability

Steel production has traditionally relied on coal, both as a fuel source and as a reductant for iron, making it the most significant environmental hotspot identified in Life Cycle Assessment. H2-DRI, electrowinning, and molten oxide electrolysis solutions are based on renewable energy, where carbon as the reducing agent is fully replaced by hydrogen or electricity enabling the reduction of CO2 emissions during primary steel production. The steel industry is also known as a major contributor of air pollutants among which are SO2, NOx and particulate matter. Decarbonizing the steel industry could also provide benefits by reducing air pollution.

The use of hydrogen for iron reduction presents significant social challenges, as debates on hydrogen’s environmental impact intensify.

Currently, the majority of hydrogen comes from fossil fuel through steam methane reforming of natural gas or coal gasification. To ensure the complete decarbonisation of steel production, hydrogen production must also be carbon-free (i.e., green hydrogen) as must the electricity used in the production process which should be based on renewable energy sources.

A study estimates that 37-60 GW of electrolyser capacity is required to produce 94 Mt of green steel (to replace steel produced in Europe that originates from the BF/BOF route), which corresponds to the production of about 6.6 Mt of hydrogen per year. This compares to the EU hydrogen strategy which aims to have 40 GW of electrolyser capacity installed within the EU by 2030. The large-scale deployment of green hydrogen inevitably requires considerable amounts of green electricity that can have potential tradeoffs in terms of climate and other environmental impacts due to material consumption on the infrastructure.

Indeed, a 50% increase in wind and solar energy is needed to meet the hydrogen demand in industrial and transport sectors by 2050 in Europe. Furthermore, the primarily adopted carbon vision can lead to overlooking other environmental issues including those related to the entire associated value chain (e.g., ties to hydrogen production and the energy production needed). The transition to a green-H2 based production of steel needs to take into account broader considerations: reskilling and redistributing steelworkers, competition between renewable energy infrastructure, agriculture, and CO2 sequestration, and supply chain bottlenecks including rare earth mineral supply for solar panels, electrolysers and batteries.

In addition, it is worth noting that some uncertainties remain regarding the warming impact of hydrogen and the risk posed by potential leaks associated with its large-scale deployment. This requires a deep understanding of the climate impacts of hydrogen at different leakage rates for a decarbonisation path for industries such as steel.

In their study, Cooper and Hawkes compared different decarbonisation pathways for various industries, including steel in the UK, and highlight the risk of increased impacts on other areas of the environment. Above all, it is essential to consider all the environmental impacts (e.g., GHG emission but also pollutions, water use, biodiversity) and the entire value chain when designing and constructing decarbonised steel production, to identify potential co-benefits or trade-offs and ensure a transition towards a greener steel industry.

Highlight Map of the main Research Projects & Demonstrators

More references, information, examples and use cases in ENGIE's 2025 report on Emerging Sustainable Technologies.

> Download the 2025 report on Sustainable Emerging Technologies <

Contributions and Acknowledgments:

Ludovic Ferrand
Sarah Salamé
Coline Bouzique
Jean Sanchez
Camille Riviere
Elodie du Fornel
Jan Mertens
Jean-Pierre Keustermans
Céline Denis
Olivier Sala

Source: Emerging Sustainable Technologies Report 2025 by ENGIE R&I

My notifications

Decarbonizing Steel Production