Inside a warehouse in the northern Swedish city of Luleå, Helena Sundberg grabs a handful of dark grey, marble-sized pellets from a pile. These are chunks of sponge iron, so-called because of its porous, honeycomb-like microscopic structure.
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Sundberg is site and visitor manager at HYBRIT, a Swedish conglomerate piloting “fossil-free” steel here. She says this iron will one day be made into steel and is then used in any number of modern-day items.
“Strollers, building material for steel-clad walls,” she said. “We have produced watches from it.”
SSAB’s coal-based steel mill in Luleå, HYBRIT’s fossil-free plant in Luleå, Sweden, makes steel with almost no carbon emissions. Photo: Reid Frazier / The Allegheny Front
Steel has traditionally been made with coal, which emits large amounts of carbon dioxide. Steelmaking accounts for 10 percent of global CO2 emissions, according to the International Energy Agency. HYBRIT built this facility four years ago as a laboratory for making steel with hydrogen, a common industrial gas that emits zero carbon.
The hydrogen is used at HYBRIT to refine reddish pellets of iron ore into almost pure iron, a key step in the steelmaking process. The technology behind the process has been known for decades, said Martin Pei, chief technology officer for SSAB, the Swedish steel maker behind the HYBRIT project.
“But to make it work 24/7, safely…nobody has succeeded in the past,” Pei said.
SSAB plans to use the technology developed and studied at HYBRIT to replace its coal-based steel mills by the end of the decade. In doing so, the company will cut Sweden’s carbon dioxide emissions by 10 percent. CO2 is the main driver of climate change.
“From the technology perspective, we are confident this will work. The challenge moving forward is to make this a large-scale implementation,” Pei said.
Pei predicts this hydrogen-based steelmaking process can be exported to other countries around the world.
“In the long run, when this is shown at large scale, my personal belief is that this will be spread,” he said.
A new method of steelmaking that requires clean energy
Hydrogen is typically made with fossil fuels, in a process that creates lots of CO2.
But HYBRIT makes its hydrogen from electrolysis, a process in which an electrical current is run through water, splitting the water molecules into hydrogen and oxygen. And since its electricity comes from renewable energy, thanks to northern Sweden’s abundance of hydroelectric power, it has virtually no carbon footprint.
“We completely decarbonized the steelmaking process,” Pei said.
HYBRIT then uses the hydrogen to process iron ore pellets as the first step in making steel. The hydrogen removes oxygen from the iron ore, leaving behind sponge iron. The sponge iron is then melted down in an electric furnace – also powered by clean energy – and processed into steel.
The traditional coal-based steelmaking process produces large amounts of CO2. With hydrogen, the only byproduct is H20 – water.
SSAB’s coal-based steel mill in Luleå, Sweden, will be replaced with zero-carbon steel by the end of the decade. Photo: Reid Frazier / The Allegheny Front
Pei says SSAB helped start the HYBRIT plant to respond to the growing demand for climate action. These include policies like the European Union’s emissions trading system, which will raise the price of carbon emissions for steel producers in the next few years.
“We saw this quite clearly as a company that the society will now focus more on the drive to reduce emissions due to understanding the damages created by climate change,” Pei said.
Pei says that this type of steel will be more expensive to make in the beginning but that some customers, like Volvo, are willing to pay a premium for it.
“In 2015, after the Paris Agreement, it has become more and more clear that our customers that are using steel are now asking for this type of fossil-free steel,” he said.
Clean steel around the world?
What will it take to expand to other countries, including the U.S., the world’s fourth-largest producer of steel?
Kajsa Ryttberg-Wallgren, chief growth officer with the Swedish clean steel startup Stegra, says her company is on the lookout for locations around the world. Stegra is building the world’s first commercial-scale green steel plant in Boden, Sweden, near HYBRIT’s pilot plant, using similar fossil-free technology.
Ryttberg-Wallgren says her company is looking for places with abundant renewable energy nearby, which is not the case in most of the U.S.
“The U.S. in general, when you look at it from a high-level perspective, it doesn’t check all the boxes,” said Ryttberg-Wallgren.
She said one possible exception is Texas because of its large amounts of wind and solar energy. But traditional steelmaking areas, like western Pennsylvania and the Great Lakes, don’t fit the bill.
“You need to be close to the [clean] energy source. And they are not where they are located today,” she said.
That includes U.S. Steel’s Mon Valley Works near Pittsburgh. Japan-based Nippon Steel, which is trying to buy U.S. Steel, says it will re-invest a billion dollars in the coal-based steel made at Mon Valley if its bid to buy U.S. Steel is approved by the U.S. government. Both President Joe Biden and President-elect Donald Trump said they would oppose the deal.
Ryttberg-Wallgren says hydrogen-based steel could be more feasible in the U.S. if policies here encouraged more renewable energy.
The Biden administration successfully pushed through renewables-friendly policies, like the 2022 Inflation Reduction Act, which included subsidies for clean energy and clean hydrogen. It also set aside $1 billion for two steel companies to develop low-carbon steel.
One is Sweden’s SSAB, to build a hydrogen-based steel plant in Mississippi. According to the company, the project is still subject to negotiation between the Department of Energy and SSAB.
The other is Cleveland-Cliffs, for a plant in Ohio to use natural gas to process iron ore instead of coal. The plant, which is in the initial planning stages, could eventually be converted to hydrogen.
Cleveland-Cliffs CEO Lourenco Goncalves told investors earlier this year that hydrogen was game-changing for the industry.
“Going forward, we expect a lot of progress over the next decade with emphasis on hydrogen,” he said.
The U.S. steel industry already has a lower carbon footprint than steel industries in other countries because most of its steel is produced out of scrap metal in electric arc furnaces. But the industry still produces about 30 percent of its steel using traditional, coal-based blast furnaces, such as U.S. Steel’s Mon Valley Works.
Cleaning these up would be good for the climate, but also good for public health in local communities near steel mills, said Nick Yavorsky, a senior associate at Rocky Mountain Institute, a progressive think tank.
A recent report from Industrious Labs, an environmental group, found pollution of coal-based steel, including nitrogen oxides (NOx), sulfur dioxide (SO2), and fine particulate matter (PM2.5), cost the U.S. up to $13 billion a year in health costs.
“Communities that live by these mills have been exposed to environmental pollution for decades,” Yagorsky said.
The Trump question
This transition for the steel industry faces uncertainty from a second Trump administration. Trump has called Biden’s climate policies a ‘scam” and vowed to repeal the Inflation Reduction Act, though he’s been light on specifics.
This worries Yong Kwon, a policy advocate for the Sierra Club.
“I worry that because so many members of the administration are not concerned or have stated that they don’t really take climate change seriously, that this will simply not be a priority” for the incoming administration, he said.
Kwon and others say the most important thing the U.S. can do to clean up its steel industry is to build more renewable energy as soon as possible. The Stegra steel mill in Boden will use about 1,000 megawatts, according to the company. That’s roughly the output of a conventional nuclear reactor.
The Biden administration has put out mainly financial carrots for industry to lower its emissions– like tax credits for clean energy and grants for clean steel; Europe relies more on the stick of carbon regulations. Which is better?
SSAB’s Martin Pei says having both would be best.
“Ideally, working with both – in a combination – would be even more powerful.”
–This story was supported by the MIT Environmental Solutions Journalism Fellowship.
