Download (1620Kb)
Total Page:16
File Type:pdf, Size:1020Kb
Original citation: Sridhar, Seetharaman and Li, Zushu. (2016) Can there be a sunrise in steel town? Ironmaking & Steelmaking . 10.1080/03019233.2016.1211150 Permanent WRAP URL: http://wrap.warwick.ac.uk/80953 Copyright and reuse: The Warwick Research Archive Portal (WRAP) makes this work by researchers of the University of Warwick available open access under the following conditions. Copyright © and all moral rights to the version of the paper presented here belong to the individual author(s) and/or other copyright owners. To the extent reasonable and practicable the material made available in WRAP has been checked for eligibility before being made available. Copies of full items can be used for personal research or study, educational, or not-for profit purposes without prior permission or charge. Provided that the authors, title and full bibliographic details are credited, a hyperlink and/or URL is given for the original metadata page and the content is not changed in any way. Publisher’s statement: “This is an Accepted Manuscript of an article published by Taylor & Francis in Ironmaking & Steelmaking on 9 August 2016 , available online: http://dx.doi.org/10.1080/03019233.2016.1211150 ” A note on versions: The version presented here may differ from the published version or, version of record, if you wish to cite this item you are advised to consult the publisher’s version. Please see the ‘permanent WRAP url’ above for details on accessing the published version and note that access may require a subscription. For more information, please contact the WRAP Team at: [email protected] warwick.ac.uk/lib-publications Can there be a sunrise in steel town? Seetharaman Sridhar and Zushu Li WMG, University of Warwick, Coventry ABSTRACT A sustainable UK steel industry is vitally important to the UK’s future growth prospects. This article first analyses the grand trends and challenges that the UK steel industry is facing. Then alternative iron making processes are briefly reviewed with regard to its flexibility in raw material and energy and its reduction in CO2 emissions. It is concluded that in the long-term, the scrap- based EAF route can be considered as a viable process route for the UK steel industry. For the current integrated process, its sustainability can be achieved by substantially improving its energy / material efficiency and by focusing on the creation of value-added steel products. It also points out that ensuring the sustainability of the UK steel industry requires a clear strategy, substantial capital expenses and support from the government and the industry itself. The UK has to invest in / re-shape steel-related research creating new competences for the viability of the industry. Key words UK steel industry, ironmaking, steelmaking, CO2, process and product innovation INTRODUCTION The last 12 months have been tumultuous if not cataclysmic for the UK steel industry. Key innovations in the integrated process for making steel were made in the UK but the industry is now struggling to survive amidst high raw- material prices, high energy costs and falling prices for commodity steel products amidst cheap foreign imports. 1 UK steel production is through two process routes, the integrated route (10.165 Mt in 2014) and EAF route (1.955 Mt in 2014) [1]. The integrated route (e.g. Scunthorpe and Port Talbot steelworks) is based on the production of iron from iron ore and coke, and steel from BOF (basic oxygen furnace) steelmaking, while the EAF (electric arc furnace) route (e.g. Tata Steel Speciality at Rotherham and Stockbridge, and Celsa Steel and Liberty in South Wales) uses scrap as the main raw material. The energy consumption through the integrated process was estimated to be 10.5 to 11.5 GJ/tls (tonne liquid steel), which is ~80% higher than that by EAF route (2.1 to 2.4 GJ/tls) [2]. Energy costs and materials costs account for 36% and 40% of the total production costs of hot rolled coils through the integrated route. Future demand for steel in the UK is estimated to be about 300 kg of steel per person per year; which is about 20 Mtpa for the whole UK [3]. Domestic production of steel is vitally important to the UK’s future growth prospects, and to the UK’s aspirations for the manufacturing and construction sectors - it is the critical part of UK materials supply chain. There is a clear case to protect steelmaking capacity in the UK. This article first analyses the trends and challenges that the UK steel industry is facing, and then examines possible solutions for the viability of this industry from a technical point of view. TRENDS AND CHALLENGES AFFECTING THE UK STEEL INDUSTRY Faced with little/no natural resources nor a national energy strategy the UK steel industry is being affected by grand trends and challenges, for example, in strict environmental regulation, new energy/materials sources, global over- capacity, and ever increasing customer requirements for high quality steel products. In other words, improvements in productivity to maximize yield, and reduce process costs are dwarfed by the changes in raw material prices and energy costs and fluctuations in the market for steel products (Figures 1 to 3 [4,5]). Thus, it can be argued that when the steel industry `does well` in modern times this is caused by a temporary trend in e.g. iron ore cost or some large infrastructural efforts in some part of the world (and not due to innovative 2 transformations in the steel plants). The question then becomes, how does one enable steel manufacturing to become resilient towards trends? Logically the solution would entail (I) flexibility in raw material and energy to manufacture iron at the front end, and (II) a viable strategy with regards to the products that are produced. The former may become ever more important as the UK exits the EU and, as a result of the fallout, economic imports of any kind may become challenging. The latter, i.e. a viable product strategy can be realised by new product development and more importantly flexibility of so called late stage differentiation in product (see the section “PRODUCT DIVERSIFICATION”). With the technology available today we are, in the UK, limited to strategically targeting products where we would have a competitive advantage due to local supply chain needs. This could be for example, strip for construction applications utilising advanced coating processes, products for the domestic automotive industry (electric steels for electric vehicles, light weight steels and steel/polymer hybrids etc) and specialty steel for aerospace and automotive drive train applications. A need for a domestic supply chain for such high value products may become essential for sustaining the sectors that depend on steel as UK exits the EU and imports may become more expensive. Although the steel industry is pretty lean and efficient, steel production is still energy-intensive, consuming fuel (mainly coal and coke) and electricity and accounting for 6.7% of anthropogenic CO2 emissions globally. In order to keep global warming to well below 2 °C by the middle of the 21st century compared to pre-industrial levels, the participating 195 countries in the `Paris Agreement`, by consensus, agreed to reduce emissions and carbon output as part of the method for reducing greenhouse gas `as soon as possible`. The EU Commission’s climate change target, summarised in their roadmap for Moving to a Low Carbon Economy in 2050 is a reduction in emissions of 80- 95% by 2050 compared to 1990 for European industry. This is far beyond the reach of the steel sector as the actual energy consumption (and also the CO2 emission) is only 25 to 30% higher than the theoretical minimum for the integrated process. This target of emission reduction can only be achieved by 3 transformative processes and in combination with Carbon Capture and Storage (CCS). CCS is widely viewed as a crucial approach to meeting global and national climate change targets, although large-scale CCS is still in its infancy. It involves capturing CO2 emitted from high-producing sources, transporting it and storing it in secure geological formations deep underground. While some of these have been operated successfully for decades, progress in applying large-scale CCS to carbon-intensive industry both in the UK and globally has been slow. Initial projects require large upfront investments, although the expectation is that costs will rapidly fall for second generation projects once the primary infrastructure is in place. CCS projects in the EU have been significantly delayed due to various reasons such as public awareness and acceptance, infrastructure, lack of business case, lack of a legal framework etc. There may be a long way for the CCS technology to be practically in use in the UK. The reduction of carbon footprint can also be achieved by using clean/renewable energy to replace the fossil-based energy in the steel manufacturing. The clean/renewable energy can be wind power, hydropower, solar energy, geothermal energy, bioenergy, nuclear power, shale gas etc. US steelmakers have, in recent years, reaped the benefits of the shale gas revolution, which substantially reduced the gas price there. UK energy is becoming cleaner and greener with wind, solar and other renewables generating more electricity as UK energy from coal hit zero for several times in May 2016. Although it is early days for shale gas in the UK, work has started to extract abundant shale gas from previously unproductive rocks as the first fracking operation in the UK was just approved on 23rd May 2016. In the foreseeable future, cheap electricity from renewable energy or non-fossil energy (e.g. shale gas) is likely to be available, helping create a cleaner/brighter UK steel industry.