Greener steel: Scaling up the initiative

Last week, there were two significant developments in the global effort to reduce the environmental impact of steel production. It was reported that Boston Metal had secured $ 262 million in venture funding for its technology focused on electric-based steel and metal production. In addition to this, Sweden's H2 Green Steel had successfully gathered € 1.5 billion in equity to construct its inaugural plant utilising hydrogen for steel production.The task of decarbonising the steel industry is anticipated to be both challenging and expensive. Achieving this transformation on a meaningful scale could potentially reshape one of the world's largest industries. Currently, the steelmaking process contributes to approximately 8% of emissions within the energy sector. Presently, the production of one ton of steel results in the release of nearly two tons of CO2 emissions.This critical challenge can be examined by breaking it down into various numerical scales, ranging from smaller to larger quantities. To start, consider thousands, specifically, one thousand. Global Energy Monitor has identified 1,016 steel plants in 89 countries, collectively boasting an annual capacity of 3 billion tons. This represents a mere 7% of the total number of steel plants worldwide, which is significantly less than the number of coal-fired power plants. Moreover, it pales in comparison to the over one billion automobiles currently in operation. Quantifying emissions from this group is a feasible task, and the potential market for technologies aimed at decarbonizing steel production is well-defined.Moving on to the scale of millions, it should be noted that Boston Metal's series C funding round is not intended for constructing a series of full-scale production facilities, or even a single one. Instead, the company intends to utilise these funds to expand its team and demonstrate its technology in commercial applications. In the steel sector, hundreds of millions of dollars represent a starting point for achieving scalability rather than a final destination.The next scale to consider is billions. H2 Green Steel's private placement, involving a minimum of 15 investors, is directed toward establishing a large-scale production facility. Nevertheless, this equity capital alone will not suffice, as the company has also secured commitments for over € 3.5 billion in debt financing. While H2 Green Steel's production aspirations are ambitious, they do not match the industry's overall scale. Their objective is to produce 5 million tons of steel by 2030, which is only a fraction of the total output of the entire sector. In 2021, global steelmakers produced 1.95 billion tons of steel, a quantity twice as large as that produced just two decades earlier and over ten times the global production in 1950. H2 Green's production target would not rank them among the top 50 steel producers in terms of volume for the year 2021.Also read: India and Russia to launch Eastern Maritime Corrido                                Rosatom, Gazprom Neft agree to northern sea route