This is because the sector burns through an enormous amount of coal. The fossil fuel is traditionally used both in blast furnaces to purify iron ore and in basic oxygen furnaces to turn that purified iron into primary steel.
In the U.S., 12 blast furnaces are still producing iron ore this way, but the country’s steelmakers have largely shifted away from making primary steel. Instead, they increasingly rely on electric arc furnaces, a much cleaner technology that uses electricity to melt iron and scrap steel and turn it into fresh steel.
About 70% of the country’s steelmaking capacity today uses electric arc furnaces. All of the new capacity planned in the U.S. will come in the form of facilities that use electric arc furnaces, per Global Energy Monitor’s report.
In theory, steelmakers can run this electric equipment on clean power and pair it with a coal-free iron production process called direct reduction to create carbon-free primary steel. All of the new ironmaking capacity planned in the U.S. will use direct reduction, the report says, likely including Hyundai’s $6 billion plan to make what it describes as “low-carbon” steel in Louisiana. The country will more than double its capacity for direct reduction of iron in the coming years, the report found.
For now, U.S. facilities that use direct reduction will mainly rely on natural gas to purify the ore. Doing so can halve carbon emissions compared with using a coal-based blast furnace. The holy grail from a decarbonization standpoint is to eventually use carbon-free hydrogen in place of gas in the reduction process.
However, despite plans for cleaner facilities, steelmakers don’t intend to retire their dirtiest assets. Several of the dozen coal-fired blast furnaces still operating are slated to undergo costly relinings before 2030 — effectively committing to operating for many more years. A retirement plan has been announced for only one.
