Technology and material efficiency scenarios for net zero emissions in the UK steel sector

Abstract

With the UK's legislation of a 2050 net zero emissions target, there is urgent need for radical industrial decarbonisation. The steel sector represented 12% of UK industrial emissions in 2016 and is therefore a critical target for mitigation. Mainstream scenario analyses variously assume use of unproven Carbon Capture and Storage (CCS) or reductions to steel demand in order to reach a 1.5 °C compatible budget by 2050. This analysis aims to: a) assess the mitigation potential of current technology options (excluding CCS) towards a cumulative budget aligned to net zero and assuming constant steel demand; b) to evaluate the potential of material efficiency to close any mitigation gaps, (where material efficiency is providing the same useful ‘service’ with less input of energy-intensive materials); and c) to discuss the importance of sectoral budget assumptions and other uncertainties in estimating the scale of future mitigation required by the industry and the policy implications of this. We modelled four key technology scenarios including steel plant retrofit, replacement of steelmaking technologies to best practice standards, fuel shifts to greater Electric Arc Furnace (EAF) production, and implementation of selected novel technologies, under different ambition levels. Technology scenarios could reduce cumulative Greenhouse Gas (GHG) emissions (2016–2050) by as much as 44% against a constant baseline, whilst coupled technology and material efficiency scenarios could achieve reductions of as much as 53%. We also find that whilst grid electricity decarbonisation and earlier demand reduction can achieve additional mitigation, there may still be a need for some CCS capacity in the long-term to address residual emissions. In the most ambitious case, absolute GHG emissions from the steel sector reduced by 80% by 2050 against 2016 levels, assuming grid decarbonisation. We found that the most effective interventions were through established technologies, such as retrofit, replacement and EAF production, since they were immediately available, with the condition they are implemented faster than previously observed. Given the commercialisation constraints of novel technologies, structural shifts such as material efficiency and EAF production were considered highly important. However, structural changes are necessarily more complex to influence via policy, and there is little precedent for structural change by design in the UK. Our results show that only complementary scenarios combining material efficiency and technology options would achieve a level of mitigation near to net zero in the UK. We conclude that it is possible to achieve net zero emissions in the UK steel sector, but that this would require greater and earlier levels of material efficiency and some degree of CCS removal capacity.