Availability of low-emissions infrastructure

Background

Certain technologies are considered essential for the green transition of steel: carbon capture, utilization, and storage (CCUS) for those plants that continue emitting high levels of CO2 (though the feasibility of this technology is still in question), green hydrogen and electricity for electricity-based iron and steelmaking (including for low-emissions EAF plants), and other best available technologies to improve energy efficiencies. But while such technologies are necessary for the transition, they are not sufficient. They require certain infrastructure to exist in order to be used.^[1]

Carbon capture and utilization (CCU) typically involves direct reuse within a plant or another industrial manufacturing process such as carbonation of beverages and is limited at a steel plant by the colocation of another process/facility requiring captured carbon as feedstock. Carbon capture and storage (CCS) is dependent on access to geological spaces where emissions can be stored. Therefore, a plant needs to have a suitable underground site within reach, as well as the necessary infrastructure (such as pipelines or trucks and ships powered by green energy) for transport.^[2] There currently is too little infrastructure to allow all steel plants at their current locations to widely implement CCUS. This is partially because many countries limit the infrastructure used for carbon transportation to short distances. Often, however, infrastructure and carbon sequestration capacity are simply underdeveloped.^[2]^[3]

Hydrogen, too, requires infrastructure, including hydrogen production, storage, and distribution facilities. Given current low levels of hydrogen production, all these factors will need to be expanded greatly to develop sufficient resources and bring them to the steel plants.^[1]^[2] On a similar note, renewable energy production facilities are not sufficient for a transition if high-voltage electricity transmission and storage infrastructure are not prepared for.^[1]^[3]

Lastly, energy efficiency could be increased across industries if localized waste heat-sharing infrastructure were implemented. If waste heat from steel, for example, could be transported to chemical plants, it would reduce the overall need for electricity, thus reducing energy-related emissions.^[1]

If the relevant infrastructure is not within geographic proximity, steel plants may need to be relocated or incentivized to discontinue carbon-intensive practices. There may be profitability issues, as the construction of infrastructure by a steel plant is highly expensive. Relocation may take away existing competitive advantages, such as access to iron ore, skilled labor, or other resources, further reducing the profitability of low-emissions steel producers. There could also be significant economic and social implications in cities where steel and its connected industries are central to the local economy.^[3]

Policy Action

Policy targets to promote the construction of enabling infrastructure include:^[4]

Analyze the existing and future needs for enabling infrastructure, such as production, storage, and distribution facilities for renewable energy, hydrogen, and other strategy-relevant resources. This requires collaboration with the energy and steel industry stakeholders.
Coordinate and fund the development of carbon storage, sequestration, and transportation infrastructure where needed, to allow CCUS usage and lower to its cost.^[5] This may require an initial identification of suitable sites and the set-up of a regulatory framework.^[6]
Legislate and incentivize the expansion of renewable energy production, storage, and high-voltage electricity transmission to ensure high availability and accessibility for low-emissions steel producers.^[3]^[6]
Invest in and plan the expansion and research of green hydrogen production, storage, and distribution to ensure high availability and accessibility for low-emissions steel producers.^[7]
Implement localized waste heat-sharing infrastructure between industries, e.g., between steel and chemical plants.^[1]