Steel production is one of the 4 main emission-intensive industries (together with chemicals, petrochemicals and cement) in Poland. In 2021 steel production accounted for 13% of domestic industrial GHG emissions and 2.5% of all GHG emissions. It is an economically important industry, as steel is a vital production component in the construction sector, in traditional manufacturing industries (e.g. the automotive sector) and in the new, net-zero technologies industry (heat-pump, wind turbine and EV manufacturers). The domestic demand for steel is predicted to grow by 25% by 2030.

In the face of the inevitable climate policy requirements the steel industry is at risk of becoming uncompetitive unless it switches from its current processes to production of zero- and low-emission primary (from iron ore smelting) and secondary (from metal scrap) steel.

Our project aims to assess the technological feasibility and economic viability of low- and zero-carbon steel production in the main available production technologies in Poland:

• Direct Reduced Iron + Hydrogen (DRI+H2) – a process of iron ore reduction which uses hydrogen as the reagent
• Blast Furnace – Basic Oxygen Furnace + Carbon Capture and Storage (BF-BOF + CCS) – maintaining current processes but capturing the produced CO2
• Electric Arc Furnace (EAF) – secondary production, taking into account scrap supply. 

The results and methodology of our analysis will be published in open access to increase their availability for actors in the steel sector, and public and financial institutions involved in the steel sector’s transformation. 

The project will consider the impact of key international developments in (green) industrial policy  – such as the Inflation Reduction Act (IRA) in the United States, the Green Deal Industrial Plan and CBAM in the European Union – on the economics of steel production, and will take into account the key regulatory and policy barriers to deployment of net-zero technologies for steel production in Poland. 

The inspiration for our project is the research of the Wuppertal Institute and Agora Industry on steel sector decarbonisation. The outlined project is also a continuation of Instrat’s previous work on decarbonisation of energy-intensive industries and it will build upon the main conclusions from our recent paper “Decarbonisation of energy-intensive industries in context”.