Fraunhofer-Institut für System- und Innovationsforschung ISI

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  • Publication
    Technological change and industrial energy efficiency. Exploring the low-carbon transformation of the German iron and steel industry
    (Utrecht University, 2017)
    Arens, Marlene
    Climate change is a key challenge of our time. The iron and steel industry emits 6.5 % of global anthropogenic CO2 that is likely to drive global warming. Greenhouse gases, among these CO2, are to be reduced to 5-20% of today's level in industrialised countries. Thus, the steel sector must make significant contributions. The emissions originate from the consumption of fossil fuels and low-carbon alternatives to carbon intensiv iron and steelmaking seem not to be at hand. Thus this thesis analyses in detail past energy intensity trends and derives explanations for the trends, focusing from 1950 to 2035 on the German iron and steel industry as an important representative. It also assesses future pathways to reduce CO2 emissions in iron and steelmaking. Energy consumption data by energy carrier on the process level are evaluated from 1991 to 2007. The impact of a rising share of secondary (recycled) steel on the energy consumption of the German iron and steel industry is shown. Then diffusion rates for key energy efficient technologies are derived since their introduction and their impact on energy intensity is estimated. Drivers for and barriers to their uptake are assessed using a mixed-method approach. Emerging alternative ironmaking technologies are assessed. Finally, four production pathways are set up estimating energy consumption and CO­2 emission levels up to 2035. The thesis finds that the reduction of the specific energy consumption in the German iron and steel industry between 1991 and 2007 was mainly driven by an increase in the share of secondary steel. Energy efficiency improvements only contributed with 0.1% per year. Energy intensity on the process level only steadily decreased in rolling. In all other processes altering energy intensity trends were found. The reduction of the specific energy consumption in the past six decades were mainly driven by three technologies, i.e. secondary steelmaking (21%), basic oxygen furnaces (12%) and continuous casting machines (6%). Newer energy efficient technologies only contributed with 4%. Investments in energy efficient technologies are only undertaken by companies if these pay-off within a maximum of two to three years. No evidence was found that the industry had undertaken exceptional action to reduce the specific energy consumption as it compromised in a voluntary agreement. Low-carbon alternative ironmaking technologies will not be ready on time to reduce the CO2 emissions from the steel industry until 2035. One promising option would be hydrogen-based direct reduction once the production of hydrogen from renewable energies is available for large industrial applications. Neither a switch to natural gas nor an increase of electricity from renewable energies would lead to strong CO2 reductions if the current production mix in steelmaking remains. Current climate targets for 2035 - if set as equal proportional targets - could only be fulfilled by the sector if primary steelmaking based on the carbon-intensive blast furnaces expires. The thesis concludes that transforming the iron and steel industry into a low-carbon industry requires large joint efforts from iron and steel companies and governments.