Will Enbridge pipeline lock in CO2 emissions?
A proposal to double natural gas shipments to ArcelorMittal Dofasco for its new lower-carbon steelmaking facility raises a crucial question: Will the project help create a path to a net-zero future or lock in more decades of fossil fuel emissions?
Enbridge Gas and ArcelorMittal Dofasco are proposing to build a pipeline that would double the amount of gas delivered to the steelmaker from about 500 million cubic metres annually to over one billion.
The additional gas is necessary to fuel a new facility that will replace ArcelorMittal Dofasco’s aging and highly polluting blast furnaces. Blast furnaces are a key technology for making iron, the primary ingredient in new steel, but they are heavy emitters of greenhouse gases.
In 2019, the company’s CO2 emissions were 4.7 million tonnes, making ArcelorMittal Dofasco the largest industrial greenhouse gas emitter in Ontario.
The company has pledged to reduce these emissions to zero by 2050. As part of this plan, ArcelorMittal Dofasco will spend $1.8 billion (aided with $900 million in federal and provincial grants and loans) to replace its blast furnaces with a natural gas direct reduced iron (DRI) furnace and a second electric arc furnace to make finished steel.
Instead of coal employed in blast furnaces, the DRI furnace will use natural gas to turn iron ore into pure iron. Far less CO2 will be released in the new process because natural gas emits much less carbon per tonne of iron produced than coal used in blast furnaces.
ArcelorMittal Dofasco estimates the new system will reduce CO2 emissions by about three million tonnes a year, or about 60 per cent.
The company says the DRI furnace will run on gas as a first step, but eventually it will operate on 100 per cent hydrogen. Unlike natural gas, which contains carbon, hydrogen can create iron in the DRI furnace without producing CO2.
This has caused some critics to suggest that ArcelorMittal Dofasco can move even faster to help reduce global climate emissions by shifting directly to hydrogen DRI production, skipping the natural gas stage.
But the company faces a hard reality. Renewable electricity can be used to make green or emissionfree hydrogen, but vast power volumes are needed to produce sufficient hydrogen to make iron and steel. Steel can be made with electric arc furnaces using recycled scrap (ArcelorMittal Dofasco already does this) but relying on scrap alone would not create the high-quality steel demanded by the company’s automotive, food and construction industry customers.
To transition to a hydrogen future, ArcelorMittal Dofasco would need to place massive new electricity demands on Ontario just when agriculture, home heating and electric vehicles are also expected to add to provincial power needs.
Rather than wait for hydrogen, ArcelorMittal Dofasco has decided to go ahead with gas in the shortterm, achieving large CO2 emission reductions by shutting down its blast furnaces in 2028. That’s why it needs the new gas pipeline.
But company officials say there is no firm date for the transition to hydrogen, and it may not happen until sometime after 2035.
Without a target date for the hydrogen transition, ArcelorMittal Dofasco could blow a hole in Canada’s carbon emission targets by operating the DRI plant with natural gas for a decade or more.
So, is there a path forward? Hamilton is expected to be the province’s single-largest region for industrial hydrogen and has a vital interest in helping to secure ample supplies of this crucial commodity. It’s important for all the major decision-makers — city council, the steel industry, electricity planners, utilities, and other levels of government — to ensure there is adequate power for the hydrogen transition.
It might involve a high-level task force, or some other collaborative mechanism, but key local and provincial energy sector leaders need to come together to develop a hydrogen transition plan with a target date for implementation.
With a climate emergency facing the country and planet, such a collaboration could play a critical role to ensure a smooth and timely shift to hydrogen steelmaking.