• 5 MIN READ

Building a Decarbonized Steel Sector

Steel is woven into every aspect of our lives. It is the backbone of iconic monuments and buildings as well as everyday objects like cars and cookware. We have used steel for nearly 4,000 years because of its durability and versatility. What starts as iron ore is refined, impurities are removed, and carbon is added until we are left with steel. Iron is a very common element in the earth’s crust, but pure iron is much harder to come by; it almost always exists with oxygen (in the form of iron ore), which needs to be removed to turn steel into the strong, easy to use material that we rely on.

Key Takeaways:

  • While we rely on steel in many aspects of our lives, its production releases significant emissions. In 2021, the steel sector released over 62 million tonnes of CO2.
  • There are two primary methods for steel production, integrated mills and minimills. Integrated mills use blast furnaces and basic oxygen furnaces to convert iron ore to steel. Minimills use recycled steel and electric arc furnaces. The majority of steel in the US is produced through this pathway.
  • While the process of steel production is complex, it can be simplified into four main steps: mining and preparing the ingredients, creating iron, steelmaking, and lastly, casting and rolling.
  • As with many industrial sectors, decarbonization solutions for steel production are often dependent on the individual facility. At a high level, fuel switching, carbon management, and efficiency in both the material use and operation of facilities will be key technologies across the sector.

This process of converting iron ore to steel, however, can create significant emissions. Globally, steel contributes to seven percent of total greenhouse gas (GHG) emissions. In 2021, the US steel sector released over 62 million tones of CO2 emissions That’s equivalent to roughly 14 million fossil-fuel cars on the road every year. There are 79 iron and steelmaking facilities in the US today, with most of this activity concentrated in the Upper Midwest and Great Lakes regions. These 79 facilities have the capacity to produce over 121 million tons of steel per year.

Figure 1. Map of US iron and steel production facilities

More information on types of emissions, and why the industrial sector broadly presents a particular challenge for decarbonization, can be found in the first blog in this series. This blog will focus on the direct emissions from the steel sector i.e., emissions from the steel plant, which can be divided into process and combustion emissions. Process emissions result from the chemical transformation of materials to create a final product, whereas combustion emissions result from burning the fuels needed to meet the high heat requirements to process raw materials into finished products. Direct emissions do not include emissions from sources outside the steel plant, such as off-site electricity production, known as indirect production.

How Steel is Made: Steel Production, Emissions, and Emissions Solutions

So how does a lump of iron turn into a stainless-steel frying pan? Like any good omelet, it starts with raw ingredients. For steel, the three main ingredients are iron ore, coal, and scrap steel (i.e., recycled steel).

There are two main production routes in US steelmaking: integrated mill production and minimill production. Integrated mills mainly use iron ore and coal as raw materials to produce steel. The integrated mill production route uses a blast furnace to remove oxygen and other elements from the iron ore resulting in nearly pure iron with trace amounts of carbon. It also uses a basic oxygen furnace to further fine-tune the properties of the steel. Using the blast furnace/basic oxide furnace route is known as primary steel production.

Alternatively, minimills principally use scrap steel as an input and an electric arc furnace to melt the scrap and create new steel products, this is also known as secondary steel production. Close to 70 percent of the steel produced in the US is done through the electric arc furnace route. Using recycled scrap inputs can reduce process emissions from steel production, while electric arc furnaces can use clean energy from the grid. The US already has a high steel recycling rate of upwards of 85 percent, but the availablity scrap steel is finite. With demand for steel only expected to increase with the transition to cleaner forms of energy, it will be critical to reduce emissions from steel production.

Production Process

At a high level, there are four main steps in the production process.

STEP 1: Material Preparation – First, iron ore and coal are mined. Once out of the ground the raw materials are brought to the stacker/reclaimer where they are sorted by grade, or quality. Then the iron ore is sent off to the sinter plant. Here, the iron has impurities removed and is mixed with other recycled materials to create sinter, which is a small cluster of iron ore. The coal goes to the coking plant where it is heated to 1250 C to remove any impurities. This results in coke, a porous substance that is nearly all carbon.

Step 2: Ironmaking – The iron then needs to have oxygen removed. This is called “reduction” and can happen in a few ways. Traditionally, this is done through the blast furnace/basic oxide furnace route: in a blast furnace hot air is blown into a mix of coke, sinter, and lime resulting in molten ’pig iron’, an intermediary material with 4 percent carbon. This process produces CO2 and slag as byproducts. Slag is a mixture of minerals that is removed during the purification process. It can also be used in other sectors, such as cement production. A simplified form of the equation for this chemical transformation of iron ore to iron and CO2 is below.

Equation: FeO (Iron + Oxygen, aka Iron Ore) + CO (Coke) + Heat -> Fe (Pure Iron) + CO2

Alternatively, the iron ore could go to a direct reduced iron (DRI) furnace for reduction into ‘sponge iron’. These furnaces use a pelletized form of iron instead of sinter and are mixed with scrap steel. Typically, they use natural gas instead of coke for combustion. Technologies like DRI that use alternatives to coke, such as coal, natural gas, or biocoal can also achieve reductions in emissions. These technologies usually involve the suspension of iron ore in the DRI furnace, rather than relying on coke, to provide a solid, porous structure favorable for heating and reduction. Additional clean iron-making technologies that target the process emissions from iron reduction can include carbon capture on blast furnace production and DRI when using natural gas or alternative fuels.

Process emissions can also be eliminated by using alternative iron-ore reduction gases, such as hydrogen and electrolysis. Using clean hydrogen as an iron-ore reduction gas eliminates carbon emissions from the steelmaking process. Compared to blast furnaces, DRI has the potential to reduce greenhouse gas emissions from the steelmaking process by up to 99% when paired with carbon-free hydrogen. There are many initiatives and pilot programs aimed at developing this technology. Electrolysis can also be used to reduce iron ore by using electrodes and a liquid oxide electrolyte at high temperatures to separate iron from oxygen and other elements found in iron ore, thus eliminating the need for reduction by a blast furnace.

STEP 3: Steelmaking – The next step is using a furnace to blow oxygen into the molten iron. This reduces carbon content which is necessary to create a stronger material., and again there are a few different production options. In the blast furnace/basic oxide furnace process, the basic oxygen furnace blows oxygen into the molten iron to reduce the carbon content to 1 percent, which is ideal for the strength needed. The steel that is produced is then ready for casting, or depending on the grade, it is treated further before the next step. Another option is an electric arc furnace. These can convert steel scraps or sponge iron from the DRI process into liquid steel. They also produce slag as a byproduct.

Figure 2: Amount of Steel Production in the US by Technology at Individual Facilities

STEP 4: Casting and Rolling – Now that the iron has been reduced into steel, it is ready to be cast and rolled into useful shapes. The liquid steel from the furnace is brought to the continuous casting machine where it is poured into a mold and becomes a slab of steel. This slab then goes to the hot roller where it is heated to 1200 C and rolled out until it reaches the desired thickness. Sometimes, the slab then moves to the cold roller, which allows for more precise dimensions. These rolling processes produce steel in a variety of shapes and sizes depending on the end products. Lastly, finishing treatments such as annealing, galvanizing, or organic coating are applied as needed to create the desired qualities of the steel.

Policy Landscape & Market Solutions 

As with any industrial sector, steel will require its own comprehensive set of technological tools to decarbonize in the coming decades:

  • Pilot demonstrations for zero-emission technologies and lower-carbon steel production methods for commercial deployment post-2030, such as hydrogen DRI for Electric Arc Furnaces, Carbon Capture on Blast Furnaces, and Molten Oxide Electrolysis.
  • Fuel and feedstock switching from fossil fuel sources to hydrogen as an alternative iron-reducing agent for DRI, and electrification to support alternative methods of production such as molten-oxide electrolysis.
  • Buildout of transportation and storage infrastructure for captured CO2 and hydrogen.
  • Materials and operating efficiency including policies and practices to optimize material use, maximize scrap steel recycling and increase circularity, and measures such as waste heat optimization and monitoring and automation for operating efficiency.

As cleaner steel enters the marketplace, supportive demand-side policies can help provide the certainty required for private investment to begin. Pairing public low-carbon procurement policies or corporate buyers’ clubs with standards such as Responsible Steel can help ease uncertainties around risk and create a market for DRI technology and lower-carbon steel for construction projects. Consideration of international trade implications for domestic industry will be important as well, given that carbon border adjustments are being considered in domestic legislation and continue to develop in the European Union.

Supporting the scale-up of clean steel supply will require adequate demand and integrated efforts across the public and private sectors. The first blog in this series describes these policies, applicable across construction materials, in more detail. For a greater foundation of the decarbonization challenges and policy solutions available for the steel sector, watch the Industrial Innovation Initiative’s Steel Sector Overview, which provides more information on the practical experiences of companies working to advance decarbonization across the value chain. 

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Senior Program Coordinator - Carbon Management, GPI

Carrie Danner joined the Great Plains Institute in 2023 and serves as the operations coordinator for the Carbon Management team. In her work, she supports all projects within the program to elevate operations, specifically in the grant making and event planning spaces. Carrie earned a bachelor’s degree from Knox College in environmental studies. Prior to joining GPI, she supported programs at the Conservation Corps of Minnesota & Iowa as their member experience administrator.

Carbon Management Program Associate, GPI

Alana joined GPI in 2024 as a program associate on the Carbon Management team, specifically supporting the Industrial Innovation Initiative, where she helps to advance industrial decarbonization through GPI’s consensus-building approach. Alana previously worked as an account executive at Jamf, where she helped current K-12 education customers improve and scale the management and security of their Apple device deployments. Alana has spent most of her professional years working with Minnesota nonprofits, including two years as an AmeriCorps member with Twin Cities Habitat for Humanity.  She holds a bachelor’s degree in community environmental studies from the University of Wisconsin-Eau Claire.

Ankita Gangotra, Associate, WRI

Dr. Ankita Gangotra is an Associate in WRI’s US Climate Program, researching avenues to decarbonize the industrial sector, focusing on cement and steel decarbonization, environmental trade policies and international cooperation. Prior to joining WRI, Ankita was a postdoctoral research fellow in the School of Foreign Service and the Department of Physics at Georgetown University. Her research looked at the readily available technology and policy options for upgrading low-carbon cement production in the United States. Ankita has an integrated Master's in Electronics Engineering with Nanotechnology from the University of York, UK (2015) and a Ph.D. in Physics from the University of Auckland, New Zealand (2020). During her time in New Zealand, Ankita interned at the Office of the Prime Minister's Chief Science Advisor looking into equity, diversity and inclusion policy options for New Zealand’s science, research and innovation workforce.

Carrie Dellesky, Program and Outreach Manager, Carbon Removal and Industrial Innovation, WRI

Carrie Dellesky is the Program and Outreach Manager for Carbon Removal and Industrial Innovation. She develops strategies to advance policies and practices for scaling up a suite of carbon removal approaches and decarbonizing the industrial sector. She engages allies and builds and expands partnerships to mobilize champions and enhance visibility, action and impact. She also leads communications to amplify research and thought leadership, including messaging, media relations, event planning, social media and digital strategy.

Zachary Byrum, Research Analyst, WRI

Zachary Byrum is a Research Analyst in WRI's U.S. Climate Program, where he provides technology and policy analysis for carbon removal and deep decarbonization. His work focuses on pathways to reduce industrial emissions as well as bolstering technological carbon removal. Prior to WRI, Zach was a research assistant in the Carbon Management Research Initiative at the Center on Global Energy Policy. In the preceding years, he served as White House Intern in the National Economic Council under the Obama Administration and then an assistant analyst at the Congressional Budget Office. Zach holds a Master of Public Administration in Environmental Science and Policy from the School of International and Public Affairs at Columbia University and a B.A. in Economics and Political Science from Goucher College.

Katie Lebling, Associate, WRI

Katie Lebling is an Associate in WRI's Climate Program where she works on research and analysis of technological carbon removal approaches and industrial decarbonization. Before joining WRI, she worked at The Asia Group, and interned at the Woodrow Wilson Center’s China Environment Forum and the Treasury Department’s Office of Environment and Energy. She holds a Master's degree from Johns Hopkins School of Advanced International Studies in Energy, Resources, and the Environment, where she spent one year of the program studying in Nanjing, China, and has a B.A. from Colby College in Biology and Chinese language.

Debbie Weyl, Deputy Director, WRI United States

Debbie Karpay Weyl is the Deputy Director for WRI U.S. She previously served as Manager for the Buildings Initiative at WRI Ross Center for Sustainable Cities. She led an expanding global partnership to accelerate building energy efficiency in cities around the world. She also contributed to program management and development, research, and knowledge exchange for urban energy efficiency and sustainability. Debbie joined WRI from CLASP, a global non-profit organization that improves the environmental and energy performance of appliances, lighting and equipment. From 2011-2016 Debbie managed and developed global programs, led research projects, and facilitated collaboration among international experts and other representatives in the public, private, and non-profit sectors. Prior to joining CLASP, Debbie worked at the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, where she was a contractor supporting building efficiency and other energy efficiency programs in the United States. Debbie holds a Master of Science in Environment and Development from the London School of Economics and Political Science, and a B.A. in Politics (Political Economy and International Relations) from Princeton University.

Angela Anderson, Director of Industrial Innovation and Carbon Removal, WRI United States

Angela Anderson is the Director of Industrial Innovation and Carbon Removal in the Climate Program. She leads WRI's growing portfolio of work in industrial decarbonization and carbon removal and aims to change narratives around “hard-to-abate” sectors and promote the natural and technological interventions required to achieve net-zero targets. Prior to joining WRI, Angela worked as a program director, coalition builder, international advocate, and campaign strategist. She led the Climate and Energy Program at the Union of Concerned Scientists for ten years; facilitated US-NGO engagement in the international climate negotiations while at US Climate Action Network and at the Pew Environmental Trust; and founded Clear the Air, a national coalition to reduce pollution from power plants. Angela holds a B.A. in political science from Colorado State University.

Patrice Lahlum, Vice President of Carbon Management, GPI

Patrice Lahlum is the vice president of the Carbon Management program at the Great Plains Institute. The Institute, headquartered in Minneapolis, MN, works with diverse stakeholders and communities across the country to transform the energy system to benefit people, the economy, and the environment. We strive to combine our unique consensus-building approach, expert knowledge and analysis, and local action to promote solutions that strengthen communities, shore up the nation’s industrial base, and enhance domestic energy independence, all while eliminating carbon emissions. Patrice oversees several initiatives including the Carbon Capture Coalition, Industrial Innovation Initiative, Carbon Action Alliance, and the Regional Carbon Capture Deployment Initiative.

Kate Sullivan, Senior Program Coordinator, Carbon Management, GPI

Kate Sullivan joined the Great Plains Institute in 2019. As Senior rogram Coordinator, Kate uses her analytical and design skills to provide research, writing, and logistical support across the Carbon Management team. Prior to joining GPI, Kate worked as an Energy Counselor in the Center for Energy and Environment’s residential department, assisting homeowners with their energy needs and providing resources for efficiency upgrades. Kate earned her BA in Biology from St. Olaf College with an emphasis in Environmental Studies.

David Soll, Industrial Decarbonization Manager, GPI

David Soll joined the Great Plains Institute in 2023 and serves as Industrial Decarbonization Manager. He oversees the Industrial Innovation Initiative, a coalition advancing decarbonization solutions for the Midcontinent region’s most important industrial sectors. Prior to joining GPI, he taught history and environmental studies at the University of Wisconsin-Eau Claire, where he focused on urban infrastructure and energy conservation. David earned a Master’s in government from the University of Texas at Austin and a PhD in history from Brandeis University.

Jill Syvrud, Senior Program Manager, Carbon Management, GPI

Jill Syvrud joined the Great Plains Institute in 2017 and serves as the program manager for the Carbon Management Program. In addition to overseeing the overall program, Jill directly supports the Industrial Innovation Initiative, a coalition advancing decarbonization solutions for the Midcontinent region’s most important industrial sectors. Jill earned a bachelor of science in biology from the University of Wisconsin–Eau Claire and a master of science degree in science technology and environmental policy from the University of Minnesota’s Humphrey School of Public Affairs. Jill’s past experience includes multiple graduate research assistantships concentrating on technology innovation and sustainable megacities along and a previous position as an administrative and outreach coordination intern with the Midwest Renewable Energy Association.