In a significant development within the steel industry, the definition of 'green' steel is undergoing a transformation. The industry is gradually moving away from methods like carbon offsetting and mass balancing, instead prioritizing production processes that inherently have a lower carbon intensity. This shift reflects a growing consensus that true sustainability in steel production cannot be achieved through compensatory measures alone, but requires fundamental changes to the production process itself.

A panel at the recent Fastmarkets International Iron Ore & Green Steel Summit 2024 highlighted this trend, noting that while a global standard for green steel remains elusive, there is a clear trend towards investment in iron reduction processes that rely on fines, rather than traditional pellets. This is driven by the recognition that achieving significant reductions in carbon emissions necessitates a move towards more sustainable raw materials and production techniques.

The panel, comprising industry experts, also discussed the future supply and demand dynamics of green steel, particularly in Europe. It was suggested that by 2030, the supply of green steel in Europe, estimated to be over 25 million tonnes per year, could potentially outstrip the demand, which is currently projected at 20 million tonnes per year. This demand is primarily driven by the automotive and clean energy sectors, indicating that a surplus of green steel could emerge, negating the possibility of a premium on green steel prices.

In terms of production standards, truly green steel is characterized by a carbon intensity of less than 250 kilograms of CO2 per tonne of steel, and is produced using at least 80% green hydrogen. In contrast, low-emission steel may have a carbon intensity ranging from 260 to 600 kilograms per tonne, depending on whether it is hydrogen-based or natural gas-based.

The panel also touched upon the technological advancements that are reshaping the industry. Innovations in blast furnace technology, including carbon capture and the use of low-emission iron ore pellets, are being explored. Additionally, investments are being channeled into thermochemical reduction processes and electric smelting, with the choice of technology being influenced by the geographical location of the mills.

With the anticipated investment surge in metallics production, a shortfall in high-grade iron ore pellets is expected. This has led to a growing interest in fines-based Direct Reduced Iron (DRI) processes, which are likely to attract significant investment in the near future.

The discussion also delved into alternative reductants like biochar, which could serve as a substitute for hydrogen in iron ore reduction. However, the capacity for biochar production remains a question, with hydrogen being viewed as the only viable option for achieving the desired level of decarbonization.

Finally, the panel addressed the challenges associated with Carbon Capture, Utilization, and Storage (CCUS) deployment, including the substantial costs and land requirements. The need for Europe to expand its nuclear power capacity was also highlighted as a means to mitigate hydrogen costs and ensure energy security, despite the environmental concerns associated with nuclear energy.

This comprehensive analysis by the panel underscores the evolving landscape of green steel production and the industry's commitment to finding sustainable solutions that align with the global goal of decarbonization.