Industry stakeholders gather to map decarbonisation challenges and opportunities in the iron and steel value chain

Report on the outcome of the workshop due out in June 2023.

On 18 April, the Department of Trade, Industry, and Competition (the dtic) in South Africa, within the ambit of the Steel and Metal Fabrication Master Plan 1.0, hosted a workshop to discuss challenges and opportunities to decarbonise the country’s iron and steel value chain.

The workshop, jointly organised by Trade and Industrial Policy Strategies (TIPS) and the Leadership Group for Industry Transition (LeadIT), brought together 40 decision-makers and experts from industry, government, and civil society. The dialogue focussed on challenges and opportunities to achieve sustainable growth and development of the iron and steel value chain in South Africa in light of increasing climate change risks and a changing global and local policy environment.

Leading the charge to decarbonise the iron and steel industry
South Africa joined LeadIT in 2022, an initiative bringing together countries and companies to achieve net-zero carbon emissions from heavy industry by 2050. The steel workshop in South Africa, backed by LeadIT and TIPS, will support national-level plans, including the Steel and Metal Fabrication Master Plan. The outcome of the workshop will be presented in June 2023 through reports published by TIPS and LeadIT.

The global iron and steel value chain is at a crossroads, and data from the LeadIT Green Steel Tracker shows that the transition away from emission-intensive steel production has already begun. To meet climate targets and avoid carbon lock-in and stranded assets, the global steel sector must use the 2020s to invest massively in low-carbon steelmaking technologies.

Keynote speakers included representatives from the Department of Trade, Industry, and Competitiveness, University of Cape Town and the South African steel industry.

“South Africa must accelerate its programme to produce decarbonised steel if it is to take advantage of Europe’s scramble to be carbon neutral,” said industry expert and research fellow at the University of Cape Town.

Trollip said Hydrogen Direct Reduced Iron (H-DRI), which is produced using green hydrogen instead of natural gas, is almost certain to be a central component of steelmaking, alongside recycling.

South Africa is among the 10 biggest producers of iron ore, while Europe has stringent targets for transitioning to renewable energy by 2030, and producers of renewable energy are scrambling to secure the requisite materials to increase production in line with their governments’ commitments.

“The main shortage Europe is facing is that if it looks at its H-DRI commitments, to achieve that they are going to need piles of green energy which we have got in abundance here,” Trollip said. “They have stated they are going to be importing green hydrogen and green electricity.”

The energy-intensive, high carbon-emitting steel sector is a major contributor to global warming and climate change, making it a prime contender for countries to reconfigure to reduce the carbon footprint of the industry.

“H-DRI is going to be a major international commodity and SA is one of three places in the world where this commodity can be made at least cost,” said Trollip. “We can export hydrogen in various forms and one of the most important forms is in [green] iron.”