The Institute for Energy Economics and Financial Analysis (IEEFA) has stated that it is becoming even clearer that carbon capture utilization and storage (CCUS) will not play a meaningful role in steel decarbonization as Australia-based companies Rio Tinto, BHP and BlueScope Steel are collaborating to make Pilbara iron ore suitable for direct reduced iron (DRI) processes.
DRI technology is compatible with a switch from natural gas to green hydrogen, providing a route to near-zero emissions steelmaking. DRI-EAF requires a higher grade of iron ore and Brazil-based Vale and Australia’s Rio Tinto and Fortescue are focusing on increasing supply of higher-grade iron ore that is compatible with green hydrogen-based production of DRI, as SteelOrbis previously reported.
According to the IEEFA’s statement, to date virtually all steel companies that plan to build low-carbon steelmaking capacities on a commercial scale have opted for hydrogen-based or hydrogen-ready DRI plants, not CCUS. The 2030 project pipeline of DRI plants has grown to 94 million mt per year, while the pipeline for commercial-scale CCUS on blast furnace-based operations amounts to just one million mt annually. The IEEFA stated that, at this relatively early stage of the steel technology transition, it is already time for steelmakers and iron ore miners like Australia’s BHP to drop the idea that CCUS will play a major role in decarbonizing the steel industry.