The prospects for carbon capture and storage (CCUS) in the steel industry, once heralded as a solution for reducing greenhouse gas emissions, appear increasingly dim. Despite continued assertions from major players like Nippon Steel, ArcelorMittal, and BHP, the technology’s viability remains questionable, according to a report from the Institute for Energy Economic and Financial Analysis (IEEFA).
While these companies promote CCUS as a key component of their decarbonization strategies, the reality suggests a different story.
Numerous challenges, including financial, technological, and environmental factors, hinder the successful implementation of CCUS in the steel industry.
One significant issue is the low capture rates consistently observed in CCUS projects. The amount of carbon captured often falls short of initial targets, as demonstrated by the Al Reyadah project in the UAE, which captured only 26.6% of emissions in 2023.
Moreover, the track record of CCUS projects across various sectors is underwhelming. Recent setbacks, such as the cancellation of a C$2.4 billion CCUS proposal in Canada and revelations about the Sleipner project’s overstated capture rates, further underscore the technology’s inherent risks.
The high costs associated with CCUS remain a persistent obstacle. Capturing carbon at multiple points in coal-burning blast furnace steel plants significantly increases costs, making the technology economically unfeasible.
Relevant: JSW Steel Joins Forces With Carbon Clean And BHP For Carbon Capture Breakthrough
In contrast, direct reduced iron (DRI) steelmaking, a mature technology capable of utilizing green hydrogen, offers a more promising alternative.
Numerous steelmakers are shifting towards DRI plants to reduce emissions, as evidenced by the growing pipeline of DRI projects, which currently stands at 96 million tonnes per year.
While the cost of green hydrogen is also high, it has a greater potential for reduction through economies of scale and renewable energy cost decreases.
CCUS for blast furnace-based steelmaking, on the other hand, faces substantial challenges and may be overtaken by more cost-effective and environmentally friendly solutions.
Read more: New Report Says Carbon Capture Will Not Be Critical In Steel Decarbonization
