The Real Cost Of Green Steel

Guest Post by Willis Eschenbach

There is much agitation in the climatosphere about the amount of “coking coal” used in making steel. A number of allegedly smart folks are working on ways to replace that coal with hydrogen to reduce the amount of eeevil CO2 produced in steelmaking. There’s a very recent post on the subject here on WUWT, describing a “green steel” method developed in Sweden.

So I thought I’d take a look at the numbers for steel for the European Union. If you know me, you know I like to run the numbers myself.

From “Hydrogen In Steel Production“, I find:

The steel industry accounts for 4% of all the CO2 emissions in Europe.

Now, Europe emits about 2.5 billion tonnes of CO2 per year. The four percent of that emitted by steelmaking is ~100 million tonnes per year. 8.43 billion tonnes of CO2 equals one ppmv of atmospheric CO2. So 100 million tonnes of CO2 avoided is a savings of about 0.013 ppmv of CO2 per year … except that about 45% of CO2 emissions are sequestered immediately, so they’ll only be saving about 0.007 ppmv per year … be still, my beating heart.

Then we have this estimate of the annual increase in electricity needed to convert EU steelmaking to hydrogen:

The total energy requirement for climate-neutral transformation of the blast furnace route, for example, amounts to around 120 terawatt hours (TWh) per year.

To provide that additional electricity they’ll need 14 new 1 GW nuclear power plants, plus a few more for peak production plus downtime. So call it 18 new nukes.

Plus, of course, the cost of the electricity itself. At say $0.06 per kilowatt-hour, that’s another $4.8 billion per year.

Next, will “green steel” be cost-effective and competitive in the marketplace? Don’t make me laugh.

Furthermore, imported steel that is not produced in a climate-neutral way should be taxed so that prices remain comparable.

If the steel industry has to fend for itself on this task, the prices of its end products will have to be raised enormously, which will make it internationally uncompetitive. The exodus of an entire branch of industry or at least the upstream production will be the result. 

(Ibid)

Prices of European steel will have to be “raised enormously”? … wonderful. Steel is used in millions of products …

How about the capital cost?

We calculate that it will cost around EUR 100 billion [US$117 billion] to make the production of crude steel climate neutral.

(Ibid)

Plus the cost of the 18 new nukes, about $8 billion per GW = another $144 billion dollars. And then there’s the cost of the additional electricity itself, which by 2050 will be $4.8 billion/year times 28 years = $134 billion.

So all up, by 2050 the changeover will cost almost $400 billion.

If they did this tomorrow, by 2050 European steelmakers would have reduced the atmospheric CO2 by ~ 0.2 ppmv. And IF (big if) the IPCC is right, that would make the world of 2050 cooler by ~ 0.002°C …

Now, temperatures drop with altitude, at the rate of about one degree C per 100 meters vertical. So if you are standing up, a temperature drop of 0.002°C is less than the underlying altitude-driven temperature difference that constantly exists between your toes and your knees …

And please, please don’t say “If the EU does this the other countries will follow”. Outside of the EU, the US, and a few other foolish sheep, most countries are nowhere near that stupid. As a way to cool the atmosphere, this will cost about US$200 trillion per °C of cooling by 2050. By comparison, global Gross Domestic Product (GDP) is about $85 trillion per year, so it would cost well over twice the globe’s entire annual GDP to cool the planet by 1°C at that rate.

At a cost of $200,000,000,000,000 per degree of cooling, that’s gotta be far and away the world’s most expensive air conditioner … and the looney-tunes folks in the EU think it’s a brilliant plan.

And if Europe does go to “green steel”, what do they get for their $400 billion dollars besides an unmeasurably tiny cooling by 2050?

Oh, right—”enormously expensive” steel. Heck of a deal …

Mathematics. Don’t leave home without it.

w.

AS ALWAYS: I can and am generally happy to defend my own words. But I cannot defend your interpretation of my words. So please, when you comment quote the exact words you are discussing.

PS—How big is a trillion? Almost unimaginably big. As one example, a million seconds is 11.6 days … and a trillion seconds is 31,700 years.

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MarkW
August 22, 2021 1:06 pm

Willis, How much to upgrade the electrical grid between all those new nuclear power plants and the “green” steel mills?

yirgach
August 22, 2021 1:13 pm

How big is a trillion? Well the War in Afghanistan is estimated to have cost 2.26 T$ between 2001-2021, so let’s say 1 T$ is roughly equivalent to 0.5 Afghanistans. And it ain’t over yet.

n.n
Reply to  yirgach
August 22, 2021 2:23 pm

0.5 Afghanis with American, British, French et al multipliers. Yes, the worst is in progress.

John Tillman
Reply to  yirgach
August 22, 2021 2:49 pm

Not including value of lives lost, nor the expenses of US allies, including Afghanistan’s.

yirgach
Reply to  John Tillman
August 22, 2021 3:42 pm

The linked article included all those expenses..

MarkW
Reply to  John Tillman
August 22, 2021 5:58 pm

What is the value of the lives lost on 9/11 and the economic damage done on that day? How many more 9/11’s would have happened had we done nothing.
How many more will happen now that we have returned the terrorists base of operations to them?

AlexBerlin
Reply to  MarkW
August 23, 2021 4:53 am

But we did nothing all the time. There are still Muslims alive in this world. Thousands of atomic bombs available, and none dropped on Mecca nor Kabul nor Teheran nor Damascus, each of them more toxic to our culture than Japan and Germany combined were in 1945. We have become toothless and senile, like the POTUS.

August 22, 2021 1:15 pm

On the button as usual, Willis.

One caveat, though. You assume that someone is going to buy steel, green or otherwise, at that price.
Not going to happen while the Chinese are in the steel making business. We even built the new Forth crossing with Chinese steel.

Reply to  Oldseadog
August 22, 2021 3:34 pm

Chinese steel is used everywhere around the world; even Volvo cars, now owned by Geely in China.

Swedish steel productions is a niche business in long-term decline. Using hydrogen as the reducing agent will hasten the Swedish industrial decline.

chickenhawk
Reply to  Oldseadog
August 22, 2021 4:38 pm

you too can have slaves. all that is needed is to excise that ruddy bit of conscience

Coeur de Lion
August 22, 2021 1:24 pm

Always remember that the level of CO2 doesn’t matter a toss.

n.n
Reply to  Coeur de Lion
August 22, 2021 2:25 pm

Sociopolitical apologies are known to follow strict standards of persuasion, evasion, creation, inflation, and deflation in their turn.

August 22, 2021 1:57 pm

Willis: it’s even worse than you state. From the “Hydrogen in Steel Production” link you provided there are some important caveats:

To summarize: 

  • At best, injecting green hydrogen into the BF–BOF route can reduce emissions by 21%. 
  • Hydrogen from electrolysis with grid electricity can increase emissions of the BF-BOF route by 36.9% depending on the grid emission intensity.  
  • Companies state they will use green hydrogen once available, but use grey hydrogen in the meantime. 
  • Using grey hydrogen from natural gas reformation can reduce emissions by 2.1%. Blue hydrogen can result in emission reductions similar to green hydrogen.
  • Hydrogen BF steel should not be confused with Hydrogen Direct reduction of iron ore, which can indeed go down to very low emissions and produce carbon neutral steel. This technology will be covered in part 2 of this article.

So even green hydrogen (from electrolysis) does not eliminate CO2 emissions, but reduces it by 21%. Using “grey” hydrogen only cuts emissions by 2.1%. I believe this is using existing Basic Oxygen Furnace (BOF) blast furnaces. Better results can be achieved by using hydrogen in the Direct Reduction of Iron (DRI) process, which I assume requires all new steelmaking plants at some unstated additional cost.

As Vuk notes, Sweden accounts for a miniscule 4.4 million metric tons in 2020 and the entire EU just 139.2, or about 13% of world 2020 production. So take the cost you calculate for the EU and multiply by roughly 7.7 for the cost to reduce global steelmaking CO2 emissions by 21%.

Never before in human history have so many intelligent and educated people been so willfully stupid.

n.n
August 22, 2021 2:19 pm

The greenback reservoirs of Green technology and sociopolitical myths spread under the obfuscating cover of handmade tales. That said, never attribute to incompetence, that can be adequately explained through self-interest.

August 22, 2021 2:34 pm

“Outside of the EU, the US, and a few other foolish sheep, most countries are nowhere near that stupid”
I guess Canada is in the “few foolish sheep” category.

“Ottawa to invest $400-million in ArcelorMittal Dofasco to phase out coal-fired steel making…”

https://www.theglobeandmail.com/business/article-ottawa-to-invest-400-million-in-arcelormittal-dofasco-to-phase-out/

Reply to  David Pentland
August 22, 2021 7:58 pm

That is a given of course.
Dementia Joe has nothing on Prime Idiot Trudeau

WXcycles
August 22, 2021 2:40 pm

Funny how green schemes are always an economic and national disaster for the citizen taxpayer and once productive industries. And there’s always a chorus-line of grandstanding political party hacks, idiots and other closet communists rousing it all forth, as the next new leap in European cleverness and initiative.

The whole world should just sanction the EU now. Kick them out of every export market, with a wave of our own protectionist subsidies and grand tax imposts on goods imported from the EU. If they want to go broke let’s help them get there sooner and really save the world before the final decade is over.

They’ll all be fighting each other again before 2035. At least the UK sorta got out of it.

John Tillman
Reply to  WXcycles
August 22, 2021 4:28 pm

They’ve already gone back to enforcing national borders.

niceguy
August 22, 2021 3:43 pm

about $8 billion per GW”

The real issue here is how we got to the point where 1 W costs 8 $. It’s demented!

Curious George
Reply to  niceguy
August 22, 2021 5:25 pm

How so?

John Tillman
August 22, 2021 3:55 pm

Your moronic post is still up. Peak oil hasn’t happened yet.

Global steel production rose in 2017, 2018 and 2019. It fell ever so slightly in 2020.

OK S.
August 22, 2021 4:19 pm

I’ve been trying to find out what exactly is green steel. The best I’ve found is that green steel is some kind of low carbon steel. No carbon steel is called iron. I don’t really understand green steel, though.

Low carbon steel has some uses but it is too weak for most applications where strength is required.

The says it better than I can:  https://www.differencebetween.com/difference-between-low-carbon-steel-and-vs-high-carbon-steel/

John Tillman
Reply to  OK S.
August 22, 2021 4:30 pm

Uncoked steel still has to alloy with carbon somehow, so “Green Steel” still needs the evil element (essential to life) by some means. That means either fossil sources or from the air. The real deal would be to make steel production a sink of atmospheric C.

Curious George
August 22, 2021 5:02 pm

There is a peak temperature around 3 pm almost every day.

August 22, 2021 5:11 pm

John McCarthy, late of Stanford, headed his “Sustainablility of Human Progress” website with, “He who refuses to do arithmetic is doomed to talk nonsense.”

Thank-you Willis, for showing yet once again the disease of mind that infests AGWistas.

Reply to  Pat Frank
August 22, 2021 7:56 pm

Another quote saved

MarkW
Reply to  Willis Eschenbach
August 22, 2021 5:55 pm

Obviously we reached peak steel in 1990, 2001, 2009 and then again in 2018. /sarc

Reply to  Willis Eschenbach
August 22, 2021 6:40 pm

You wrote this howler:

The entire article is irrelevant because steel production has been falling for years due to peak oil and peak steel.

Apparently you made a fool of yourself…. AGAIN!

Willis showed it has been growing for over the last 20 years.

LOL

August 22, 2021 5:32 pm

Thorium MSRs could be used during the night time hours to provide cheap electricity for steel making. Steel from sunken WW2 ships is being stripped because? The steel made before the atmospheric ban on nuclear weapons testing means WW2 steel is not radioactive and needed in some applications of medical and scientific equipment. Apparently all steel made after the bomb tests is slightly radioactive. The CCP is a criminal organization and anyone buying anything from China is helping the CCP. Steel is necessary for national defense and therefore the industry must exist even if expensive. “Free trade” is a good idea within your own borders but does not exist worldwide and should not exist due to the CCP. The ideal situation would be for every country to be self sufficient in food and energy …and steel.

Walter Sobchak
August 22, 2021 5:40 pm

Closer to home, mine anyway, Cleveland Cliffs, an integrated mining and steel making company, opened the Toledo Direct Reduction plant in 2020, which uses natural gas to make hot-briquetted iron from iron ore pellets. The briquetts are about 6.4 cu. in., weigh about 10 lbs and are about 7/8 pure metallic Fe.

The briquets are feed into electric arc furnaces together with scrap to make steel products. Rods, bars, and rolled steel.The electric arc furnaces account for nearly 2/3 of steel production in the United States.

https://www.clevelandcliffs.com/operations/steelmaking/toledo-dr-plant

The difference between the Toledo plant and the Swedish plants is that Toledo uses natural gas which is steam reformed into syngas (CH4 + H2O = CO + 6H) which then reduces Iron Oxide FeO3 into Fe + CO2 + H2O. Energetically this is a downhill lie and is much cheaper than producing H2 from H2O by electrolysis.

AFAIK, the Toledo plant is not subsidized and is intended to make money.

Walter Sobchak
Reply to  Walter Sobchak
August 22, 2021 6:24 pm

That should be 10 oz. not 10 lbs.

Chaamjamal
August 22, 2021 6:04 pm

Brilliant! As always. Thank you Willis.

August 22, 2021 6:43 pm

I was taught that a certain amount of Carbon was needed to make steel and to make it strong and this was added from the cooking coal. So, how do they make it Steel without it?

Reply to  Rich Lentz
August 22, 2021 7:53 pm

Correct
So after they build the nukes and use the power to make hydrogen and capture the resultant CO2 they will then inject this into the process with much escaping to atmosphere…..

On second thoughts never mind

andic
August 22, 2021 6:51 pm

Hydrogen is also one of the most deleterious elements it’s possible to have in a steel. I’d be highly surprised if typical industrial air melt processing could guarantee acceptable levels.

Tom
August 22, 2021 7:20 pm

Willis- My first impression is that using hydrogen to make iron and steel was a no brainer economically. And, congratulations for not mentioning hydrogen embrittlement!

Philip Mulholland
August 22, 2021 7:57 pm

So if you are standing up, a temperature drop of 0.002°C is less than the underlying altitude-driven temperature difference that constantly exists between your toes and your knees …

It doesn’t even reach as far as their brains does it?

Philip
August 22, 2021 8:36 pm

[IF] Europe goes through with this. They’ve just taken themselves out of the steel business and made steel imports so expensive that they won’t get any and therefore will be importing their finished steel goods. Go woke. Go broke.

Gnrnr
August 23, 2021 12:12 am

Apparently hydrogen embrittlement has just magically disappeared……..

Rudi
August 23, 2021 12:23 am

The counter argument is: Fossil energy is a finite resource. Practicing how to live without it will pay off in the future. It is a matter of time perspectives.

Loren C. Wilson
Reply to  Rudi
August 23, 2021 5:17 pm

The time perspective to worry about is the arrival of the next glacial period, not the exhaustion of fossil fuels.

August 23, 2021 2:42 am

I would have thought that the removal of hydrogen from freshly made steel would be easy-ish if they used zone refining similar to that used to make ingots of silicon.

I can see it now, lines of refining machines, stretching into the distance, hot spots repeatedly sweeping over 10kg ingots of steel.

It only takes money to achieve these green ambitions you know!

Perhaps multiplying the cost of steel by, what a 1000 or 10,000 times? A small price to pay to enable the green dream!

Do I need to add a /sarc?