The decarbonisation of the steel industry provides Britain with an opportunity to stimulate domestic production and take a lead in the new Green Industrial Revolution according to a report by Syndex UK and the Materials Processing Institute.

The report comes in the wake of the Business and Energy Secretary Kwasi Kwarteng’s announcement of an ambitious blueprint to deliver the world’s first low-carbon industrial sector, with over £1 billion to cut emissions from industry, schools, and hospitals.

The new Industrial Decarbonisation Strategy sets out the government’s vision for building a competitive, greener future for the manufacturing and construction sector. Part of the government’s path to net zero by 2050, today’s measures will create and support 80,000 UK jobs over the next 30 years whilst cutting emissions by two-thirds in just 15 years.

This new strategy will be underpinned by supporting existing industry to decarbonise and encouraging the growth of new, low carbon industries in the UK to protect and create skilled jobs and businesses in the UK.

The report launched today, entitled Decarbonisation of the Steel Industry in the UK, predicts the global steel industry will grow by 50 per cent up to 2050, while new green industries will create fresh market opportunities, such as offshore wind, electric vehicles, and hydrogen infrastructure.

It says that with the right policies in place this country can cut its reliance on imported steel by almost half – but the UK must take advantage of its research and innovation capabilities that can deliver the transition to a low carbon future.

However, the scale of the challenge in decarbonising the industry remains significant. Steel production is the world’s second biggest emitter of carbon dioxide after concrete, with an average of 1.85 tonnes of CO2 emitted for every tonne of steel produced worldwide. To comply with the Paris Agreement, producers must cut emissions by 90 per cent.

With the UK preparing to host the UN Climate summit COP26 later this year, the report sets out an ambitious but practical proposal based upon the development of a DRI-hydrogen, electric arc furnace-based solution.

This process replaces fossil fuels in the Direct Reduced Iron (DRI) stage with hydrogen produced by renewable energy, enabling production of virtually emission-free steel.

The report says that hydrogen DRI technology seems the most adaptable solution for the UK industry and meets all decarbonisation milestones under the Paris agreement.  Advantages include limited technological risk, immediate impact on CO2 emissions, and a process able to produce a full range of steel.

It adds that the transition to a DRI/hydrogen solution, alongside investment in increased scrap melting through electric arc furnaces, seems more secure as it can be developed in tranches, starting with the implementation of proven technology – allowing the continued use of blast furnaces until their end of life.

It describes the green benefits of reshoring steel production, as steel sections produced within the UK result in 50 per cent less CO2 emitted than steel sections sourced from the EU.

The report, authored by Chris McDonald, Chief Executive of Teesside-based innovations and research centre, the Materials Processing Institute, Stephane Portet, Head of Syndex UK and Ireland, and Marcel Spatari, Steel industry Practice of Syndex, adds that decarbonising steel requires investment and innovation in the fields of delivering greater availability of low carbon renewable energy, hydrogen technology, plus carbon capture and storage.

Chris McDonald said: “In this vital year of COP26, this paper’s ambitious but practical proposal for a DRI-hydrogen, electric arc furnace-based solution would take a decade and help Britain meet all decarbonisation milestones whilst delivering a smooth and just transition for the workforce.

“The steel industry is a special and strategic industry that underpins domestic economic activity, infrastructure and sovereign capability in any country. Britain is at a decision point and we must commit to zero carbon, high-productivity steelmaking that includes a future for steel communities.”

Stephane Portet, Head of Syndex UK and Ireland, said: “The solution proposed in this paper would maximise the use of the current assets, including the blast furnaces, but at the same time act immediately for the decarbonisation of steel making in the UK.  The investment required would be limited compared to all the other solutions.  It does not lock the UK into a specific technological roadmap and would allow implementation of the best technology available in the future. Finally, this would enable the production of a wide range of steel and support the development of the downstream capabilities which will be key for a transition without job losses. This simply ticks all the boxes.”

Roy Rickhuss CBE, General Secretary of Community, said: “In this year of COP26, our Government must commit to supporting a fair process of transition to low-carbon steelmaking. There’s no time to lose because our main European competitors are years ahead of us, so this proposal from leading experts must inject urgency and be seriously considered by all stakeholders. Backing our sector to decarbonise is a test of the Government’s commitment to British industry, to the green industrial revolution, and to supporting industrial towns and communities.

“The report says that developing shared DRI-Hydrogen facilities can benefit all UK steelmakers and support the continued operation of blast furnaces at the same time as reducing emissions. Importantly the strategy advocated by Materials Processing Institute and Syndex leaves the door open for other solutions as the technology develops and allows for a gradual and phased transition which protects all of our downstream assets.

“We welcome that the experts recognise the need to achieve a just transition, and that they believe such a transition can be delivered with no redundancies. This is important because avoiding redundancies is a red line for the unions if we are to support any process to decarbonise steelmaking. We take confidence from the experts’ belief that with the right framework of Government support, and the necessary commitment of the shareholders, our steel industry can grow and create thousands of new jobs.”

Roz Bulleid, Deputy Policy Director of the Green Alliance, said: “The government has some big decisions to make on decarbonising heavy industry and its approach to steel will be an important test of its commitment. We’ve largely got the technologies needed but must find ways to deploy them before UK businesses slip too far behind key competitors. There’s a real opportunity here for the government to show leadership ahead of the COP: we need a clear plan to transition to a low carbon, resource efficient steel industry, one that is fit for the future and can secure long-term jobs in steelmaking communities and throughout supply chains.”