Decarbonisation efforts are now being ramped up across the globe, and as countries begin to implement new export restrictions to meet their key net zero goals, ferrous scrap is rapidly becoming a highly sought-after commodity.
Global economists and strategists ING have produced a really interesting report on this subject. Here are some basics. To read the full report visit the link given below.
Steel scrap is key in establishing a circular economy
Global ferrous scrap consumption in steel production is set to rise as efforts to reduce the industry’s environmental footprint are ramped up alongside an expected increase in the share of Electric Arc Furnace (EAF) in the global steelmaking process.
The steel sector accounts for at least 7% of global greenhouse gas emissions. With global steel demand set to increase to around 2.6 billion tons by 2050, the transition to a low-carbon economy requires a change in how steel is produced. Part of steel’s decarbonisation path is through the increased use of scrap. Today, around 30% of steel is produced through recycling scrap – and this share is forecast to rise to 50% by 2050.
The map gives you an indication of which countries have restrictions on ferrous scrap exports
Steel is predominantly made via two main processes: the blast furnace-basic oxygen furnace (BF-BOF) process, which uses coke to produce iron from ore, and the Electric Arc Furnace process (EAF). These two methods are often referred to as the ‘primary’ and ‘secondary’ processes that melt down scrap and recycled steel. The BF-BOF process is the most common steelmaking process and the most emissions-intensive, with 90% of production relying on coal. Emissions from scrap-based EAFs are mostly indirect. Those emissions are not produced by the steel plant but by the electricity generators that supply electricity to the furnaces. If the electricity used in this process is produced via renewable energy, this production route can have very low CO2 emissions. When using grey electricity as energy input, scrap-EAF steelmaking emits 0.67 tons of CO2 per tonne of crude steel cast, vs 2.32 tons in the case of BF-BOF steelmaking. Carbon intensity is far lower when using green electricity.
Scrap not only plays a key role in reducing industry emissions but also in reducing resource consumption. Every tonne of scrap used for steel production avoids the emission of 1.5 tons of CO2 and the consumption of 1.4 tons of iron ore, 740kg of coal and 120kg of limestone, according to calculations from Worldsteel.
The steel sector also has alternatives to BF-BOF and EAF plants. These include Direct Reduced Iron (DRI) plants which use natural gas, and eventually (once available) green hydrogen made from renewable energy instead of coking coal to reduce the iron ore. For now, however, steel-making scrap-based EAF has the lowest carbon footprint across steel making technologies – at least until DRI technology advances to using hydrogen.
Restrictions in the scrap trade increase amid decarbonisation drive
The growing number of trade restrictions on scrap is a good indicator of its increasing value in the global decarbonisation drive. More countries are imposing export bans to protect this raw material as EAF production is slowly becoming the leading technology in steel production.
To read the full article visit: https://think.ing.com/articles/why-is-ferrous-scrap-a-strategic-raw-material/
