New value chains for green steelmaking

Steel is an indispensable material for the industrialized world. Demand for it is met by production facilities built all over the world. These sites have developed over many years, particularly in Germany. As green steel production routes are established, these value chains might change and will have to be evaluated in the future with regard to technical and economic advantag-es and disadvantages, among other things.

The reason for this reassessment is the need to reduce the massive CO₂ emissions currently generated by steelmaking operations. This can be achieved by switching the reduction of iron ore in the conventional blast furnace process to alternative process routes, e.g. one termed “direct reduction process”. Instead of coal and coke, natural gas or green hydrogen is used as reducing agents. In addition to a direct reduction plant, this route also requires an electric arc furnace (EAF) as the final steelmaking step.

Industrial implementation necessitates the construction of new plants. In view of the energy and raw material demands of the process, the availability of renewable electrical energy for hydrogen production must be examined in addition to the infrastructural conditions. 

In the BMBF-funded “TransHyDe” project, Fraunhofer IKTS examined the value chain of green steelmaking (Fig. 1) in more detail, building on extensive preliminary work in the area of process modeling of the direct reduction route. The existing models were extended to include the influence of the plant location. This made it possible to evaluate how the process chain is divided between the country where the iron ore min-ing takes place and that of the steelmaking proper. Different options were compared both energetically and economically. As possible locations of the direct reduction plant (DRP), 

• Iron ore mine (mining country),
• Coastal region (mining country, or Germany) and
• Steel mill (Germany)

were selected. Furthermore, location- and material-specific energy requirements and costs for process and transportation steps were included in the model.

The results show that a joint location of DRP and EAF enables the thermal coupling of both process steps by feeding direct reduced iron as a product of the DRP into the EAF without any additional cooling step. Without local coupling, this heat can-not be utilized within the process, which means that the ener-gy demand for steelmaking is higher when the DRP is located at the mining site (Fig. 2). However, the transportation and especially hydrogen costs are also of decisive importance for economic evaluation. Therefore, depending on the mining country under consideration, different process routes may be economically advantageous (Fig. 1). Also, aspects of industrial policy, such as the desire for resilience of Germany as an indus-trialized country, must also be taken into account. In follow-up projects with industrial partners, these findings are now being incorporated into the optimization of specific steel production chains.