“We’re going down to zero.” 

That’s what Thomas Hörnfeldt, vice president of sustainable business at the Swedish-based steel-maker SSAB, told The Narwhal of his company’s carbon emissions. 

Hörnfeldt spoke to me on a video call from his office in Stockholm, a virtual backdrop of a picturesque Swedish canal flickering behind his office chair. He proudly displays a small piece of what he described as SSAB’s first fossil-fuel-free steel on his desk. 

The company made that sample, no coal needed, a year ago in the basement of a technical university in Stockholm. It’s an early step in SSAB’s commitment to completely eliminate carbon pollution from its steel manufacturing plants.

SSAB, which produces approximately 8.8 million tonnes of steel every year at its production plants in Sweden, Finland and the United States, has invested in technology that uses clean hydrogen in place of metallurgical coal.

Metallurgical coal has long been used to manufacture steel, one of the most ubiquitous materials on the planet. Coal is conventionally used for heating and in chemical reactions to create iron, the essential ingredient needed to make steel. But as the world grapples with the climate crisis, the steel industry’s centuries-old reliance on coal — and its enormous carbon footprint — is being called into question.

According to the World Steel Association, the industry is responsible for between seven and nine per cent of the global emissions created from the burning of fossil fuels. 

With the Paris Agreement setting out global goals to dramatically reduce carbon pollution and limit warming to less than two degrees by 2050, the steel sector is, for many, next up in the push to rethink age-old industries.

“It’s a 2,000-year-old technology that just keeps getting refined,” Chris Bataille, an adjunct professor in energy economics at Simon Fraser University, told The Narwhal. And, he said, the next shift for steel manufacturing may well be away from using coal.

That’s exactly what SSAB is doing. The company announced its plans in 2016, along with two partners. The resulting joint venture, Hybrit, also includes an iron ore supplier (LKAB) and an electricity supplier (Vattenfall) — bringing the major components of steel-making together under one umbrella to use hydrogen instead of coal. 

“This concept has been known in the past and it has been done on a small scale,” Hörnfeldt said. “Nobody has really done this in an industrial environment. And that is what we’re testing right now.”

The first pilot plant launched last summer. The company plans to start shutting down its coal-reliant furnaces in a matter of years.

The plans in Sweden are taking root just as the Alberta government faces widespread backlash for its push to open up the province’s iconic Rocky Mountains and eastern slopes to open-pit mining for steel-making coal.

‘The world is looking for steel-making coal’: Alberta energy minister

The Alberta government began its fraught push for coal nearly a year ago, when the province’s United Conservative Party government announced it had done away with a 1976 policy that prevented open-pit coal mining in much of the Rocky Mountains. New mines in the region would produce metallurgical coal, used for steel-making. Backlash ensued.

But even as the government back-pedalled, it has maintained its commitment to the idea that there is a prosperous future in the metallurgical coal industry.

“There is a tremendous resource of metallurgical coal in Alberta and the world is looking for steel-making coal,” Energy Minister Sonya Savage said in a press conference in February as she defended her government’s push to expand mining opportunities.

Metallurgical coal mines, Savage added, “can help Alberta businesses meet increasing global demand for steel and provide good-paying jobs for hard-working Albertans.” 

The International Energy Agency has projected global demand for steel will increase by more than a third by 2050. Steel will, in part, help build new infrastructure such as wind turbines, electric vehicles and high-speed trains in the cleaner, greener global economy envisioned to facilitate the push to net-zero.

As the Energy Transition Hub, a German and Australian partnership, pointed out in a November 2019 report, “new metal [is] central to the zero-carbon transition. Renewable energy, and related technologies such as batteries, rely on steel … and a host of other metals.”

And while the Alberta government says this will mean a boom for the coal industry, not everyone agrees.

Blake Shaffer, assistant professor of economics at the University of Calgary, told The Narwhal  in February the expansion of metallurgical-coal mining in Alberta is an example of the province “chasing the next thing that’s going to die.”

“Rather than staking some economic bets on the growth of metallurgical coal … why don’t we become the leader in green steel-making?” he asked.

While Alberta may be slow to consider his pitch, other parts of the world are moving full-steam ahead.

Coal is the main contributor to the carbon pollution produced with steel

The steel industry is the world’s largest industrial consumer of coal, according to the International Energy Agency.

Steel is an alloy — a mixture of iron and other metals. Pure iron is hard to find naturally, and coal has long been essential in obtaining it.

The process is technical, but here’s the gist: essentially, coal is heated to super-high temperatures (more than 1,000 degrees celsius) to make a carbon-dense substance called coke. The coke is combined with iron ore — iron and oxygen — in what’s known as a blast furnace. 

That first part is fairly simple: it’s basic heating. “The heating part is only 20 per cent,” Bataille explained. “It’s the chemical reaction of stripping the oxygen off the iron ore that’s 80 per cent of the work.”

And that’s the part you might need to reach back to high school chemistry class to understand.

In the blast furnace, the coke reacts with the oxygen and “strips it off” the iron ore, leaving melted pure iron, a main ingredient of steel, explained Bataille. It’s a simple chemical reaction that is essential to getting pure iron.

“Then we can combine it with nickel and zinc and chromium and what have you,” Bataille said. “And that’s steel.” That finished product remains one of the world’s most ubiquitous and important building materials, used in nearly every building, vehicle, machine, plane, ship, public transit system and bridge on the planet. 

The problem is this: according to the International Energy Agency, the steel and iron industry produces more carbon pollution than any other heavy industry. 

“If we’re going to actually hit somewhere between 1.5 and 2 degrees, blast furnaces have to be shut down,” Bataille said. 

And SSAB plans to do exactly that.

SSAB plans ‘fossil-free steel’

SSAB has said it aims to be the “first steel company in the world to bring fossil-free steel to the market” in 2026. 

The company added it will be “practically fossil free by 2045.”

“To be perfectly frank, we made this schedule a couple of years ago, and a lot of things have happened,” Hörnfeldt, the vice president of sustainable business, told The Narwhal. “Personally, I believe that this is going to happen much faster.”

“Within the foreseeable time frame, we are going to close down all our blast furnace operations.”

The plan is to use green hydrogen and clean electricity in place of coal in the manufacturing process (more on that later). 

The company has said its goal is to reduce Sweden’s carbon pollution by 10 per cent and Finland’s by seven per cent. 

Hörnfeldt said the first of the company’s four blast furnaces will be shuttered in four years at the latest.

Scrap metal, natural gas also options to reduce coal demand

SSAB and Hybrit are not the only ones looking at ways to decarbonize steel, and hydrogen is not the only proposed technology.

One possibility involves the increased use of recycled steel. According to the World Steel Association, an industry group, steel can be recycled indefinitely, without a reduction in quality.

Since so much of the demand for coal comes from making pure iron, using recycled steel can cut down on emissions. A technology called an electric blast furnace — powered by electricity — can transform scrap steel anew again. 

With clean electricity, the technology can dramatically reduce emissions. According to the World Steel Association, approximately 28 per cent of global steel is produced using electric arc furnaces, though not all of them would solely rely on scrap steel. 

Turning scrap metal into new steel in an electric arc furnace requires electricity, which represents a further opportunity to decarbonize.

SSAB’s steel production in the United States is scrap-based, Hörnfeldt noted, adding that the company plans to switch one of its two U.S. plants to clean electricity next year.

But not all demand for steel can be satisfied with scrap. According to the Energy Transition Hub, “recycled metal is likely to supply much less than half of global demand between now and 2050. … The remainder of metal demand will be met using virgin materials.”

To decarbonize virgin steel manufacturing, some players in the industry have turned to another idea, involving replacing coal with natural gas.  

“There is a technology called Midrex,” Bataille explained. Back to high school chemistry again: instead of using coking coal, natural gas is used to “rip the oxygen off the iron ore, leaving elemental iron.” Then that iron, produced without coal, can be put into an electric arc furnace, powered by clean energy.

“This is an established technology,” he added. “And it’s much lower [in carbon emissions]. And there are these plants running all over the world.”

But the idea generating the most excitement — thought by advocates to be potentially among the greenest — involves using just hydrogen, like SSAB. Midrex boasts on its webpage that its plants are also poised to pivot to hydrogen.

In that process, hydrogen will strip away the oxygen from iron oxide. The byproducts? The pure iron needed for steel-making and good old H20.

“Consensus is growing that the best way to make steel without fossil fuels is with renewable hydrogen,” concluded the 2019 report from the Energy Transition Hub.

Emissions associated with hydrogen dependent on the way it’s produced

Hydrogen is already being used around the world, but current hydrogen production is geared more for other industrial uses, like refining oil or manufacturing fertilizer.

And clean hydrogen is not currently produced at the scale that would be needed for it to replace metallurgical coal.

Most of the hydrogen produced today is made using fossil fuels, without carbon capture technology. When that’s the case, emissions are lower than using coal, but still nowhere near net-zero. 

To truly get to zero-emission hydrogen, the industry would need to move to hydrogen produced from water through electrolysis and powered by clean energy. That’s what’s known as green hydrogen. 

Hörnfeldt told The Narwhal his company is building a facility to make its own green hydrogen, and Hybrit recently announced it is also building a pilot project that will store green hydrogen 30 metres below the earth’s surface in a rocky cavern.

He added that Sweden’s “virtually CO2-free power grid” — the country relies heavily on nuclear, hydro and wind power — makes the use of green hydrogen easier. 

But for other parts of the world, such as Alberta, there is a middle ground, and that’s what’s called blue hydrogen. It’s still generated from fossil fuels, but with a robust carbon capture and storage plan in place. 

According to a recent report from Clean Energy Canada, a climate and clean energy program at Simon Fraser University that works to accelerate an energy transition, Canada is “among a small group of countries with the most potential for producing and exporting clean hydrogen, which could prove particularly useful in decarbonizing industries like steel.” 

It’s something that some Albertans are very excited about.

A grand vision for the province was unveiled last year, with the launch of the Industrial Heartland Hydrogen Task Force. The task force officially launched a so-called hydrogen hub or node in the Edmonton area in April, with the goal of producing blue hydrogen for use locally and for export. 

Advocates are adamant that hydrogen, regardless of whether it’s blue or green, represents a way of making steel that dramatically reduces the carbon footprint of the steel industry. Others worry that blue hydrogen represents a prolonging of the province’s dependance on fossil fuels.

Either way, as more steel-making companies using hydrogen-based methods enter the market, the demand for hydrogen could rise globally.

Steel manufacturers, automotive companies push for green steel

ArcelorMittal, which describes itself as the largest steel manufacturer in Europe, the Americas and Africa, recently announced plans for what it calls the “first industrial scale production” of iron produced entirely with hydrogen, to be deployed at its Hamburg plant, with an annual production of 100,000 tonnes of steel. 

To start, ArcelorMittal, which produced nearly 90 million tonnes of crude steel in 2019, will rely on hydrogen generated from fossil fuels, but the company will switch to green hydrogen as it becomes available and economical. Using hydrogen instead of coal, it has said, is “part of our Europe-wide ambition to be carbon neutral by 2050.”

Then there’s the American startup, Boston Metal. It got its start at the Massachusetts Institute of Technology, and boasts that it is working toward “a world with no pollution from metals production.” 

The company uses a process called molten oxide electrolysis, which skips coal and can make steel straight from iron ore using electricity alone. NASA was an early partner, and is exploring the idea of using the process to produce metals from “lunar resources” for “lunar in-space manufacturing.”

Here on earth, some companies are starting to demand greener options for their materials. German car manufacturer BMW, which processes half a million tonnes of steel annually in its European plants, has made plans to invest in lower-emission steel. 

“We have set ourselves the goal of continuously reducing CO2 emissions in the steel supply chain,” the company has said in a press release, noting it is “already working with suppliers who use only green power for the steel they produce for us.”

That could mean increased demand for steel from companies like SSAB, which recently announced plans to partner with Volvo on fossil-free trucks. “We can see that the automotive industry in general is really interested in this for the simple reason that we are on the pathway of eliminating tailpipe emissions from passenger cars,” Hörnfeldt said.

“And when you get rid of the tailpipe emissions, then the major environmental impact on the vehicle comes from materials that are used in that vehicle.”

In other words: steel.

Questions about cost competitiveness

There remains a lingering question surrounding the push to manufacture steel using hydrogen. How much will it cost?

Using clean hydrogen is “going to be somewhere between 20 and 40 per cent more expensive than using coal,” Bataille said. 

“We firmly believe that this is going to be a competitive technology over time,” Hörnfeldt said, noting a 2018 SSAB analysis estimated fossil-fuel-free steel would be 20 to 30 per cent more expensive than conventional steel.

“But that gap will close,” he said, explaining the price of fossil-fuel-free steel will go down as the cost of emissions increases. “Coking coal will become more expensive and green energy will become less expensive.”

“All of these things have already happened,” he said.

According to a 2020 report from McKinsey, conventional steel-making companies face economic risks in the near future. The institute cites findings that companies may lose value if carbon pricing outpaces their ability to decarbonize.

Governments, of course, have huge impacts on the feasibility of any form of clean technologies, in the form of carbon pricing.

“What is economical depends on what kind of incentives are available,” Amit Kumar, professor of mechanical engineering and Natural Sciences and Engineering Research Council of Canada industrial chair at the University of Alberta, previously told The Narwhal. “The higher the cost of carbon, or carbon price, the more economical these technologies become.”

Alberta still eyeing new coal developments as consultation begins

Following months of backlash to the government’s plans to rescind the 1976 coal policy, Energy Minister Sonya Savage announced in March that the province will begin consultation on a new coal policy. 

That hasn’t stopped the pushback, nor has it paused progress on some metallurgical coal mines proposed in the province, such as the Grassy Mountain and Tent Mountain projects. In neighbouring B.C., new metallurgical coal mines are also moving their way through approval processes.

As industry and advocates alike call for the decarbonization of steel, one of the world’s most emission-intensive industries, there are increasing concerns that governments are putting their eggs in the wrong basket.

For Bataille, the energy economics professor, the writing is on the wall. Coal, he said, is a “resource that’s going to be probably going out of business within a generation.”