How best to clean up steel? Bacteria, hydrogen, money
Few materials are more essential than steel, yet steel mills are among the leading polluters. They burn coke, a derivative of coal and belch millions of tons of greenhouse gases. Roughly 2 tons of carbon dioxide rises into the atmosphere for every ton of steel made using blast furnaces.
With climate concerns growing, a crunch appears inevitable for these companies. Carbon taxes are rising, and investors are wary of putting their money into businesses that could be regulated out of existence.
None of this has been lost on the giant steelmaker ArcelorMittal.
For a half-century, Lakshmi Mittal devoted himself to building and running what became the world’s largest empire of huge steel mills, employing nearly 170,000 people.
Now his son, 44-year-old Aditya Mittal, who recently succeeded his father as chief executive, says the industry that has made the family’s name and fortune needs to change its polluting ways.
“The largest challenge the world is going to face over the next 30 years is how we decarbonize,” he said.
The company is spending about $390 million on pilot programs that include making steel with hydrogen and using bacteria to turn carbon dioxide into useful chemicals. The amount is less than 1% of the company’s 2020 revenue. But Mittal, who had been ArcelorMittal’s chief financial officer, said the company had greater technical resources and global scale than most rivals and was well positioned to lead the cleanup.
“We can now imagine that it is possible to make steel without carbon emissions,” he said.
But the future costs of converting a string of blast furnaces into climatefriendly operations are likely to run into tens of billions in Europe alone, the company says.
In recent years, the oil and gas industry has come under pressure from governments embracing increasingly ambitious climate goals. One result is greatly expanded investments in renewable energy. Now many see the regulatory focus turning to the steel industry and other heavy polluters.
Iron and steel are the source of an estimated 7% of global carbon dioxide emissions. While the metal will be needed for the foreseeable future in many products, including electric vehicles and wind turbines, the process of producing steel is now viewed as a potential red flag for investors and even customers.
ArcelorMittal has plants around the world, but the environmental pressures are particularly acute in Europe, where it makes about half its steel. It is expected that the penalties for emissions under Europe’s carbon-trading program and other measures will rise rapidly in the coming years.
In 2019, ArcelorMittal’s global operations made 90 million metric tons of steel, about 5% of the world total, while producing 185 million metric tons of carbon dioxide emissions.