How is "green" steel made?

The shortage of scrap production in China also restricts the scale of short-process steelmaking. Domestic scrap supply has always been in a tight state, the overall scrap production is insufficient, in 2020 is 260 million tons, for scrap demand there are some gaps can not be met, while the annual increase in scrap production of about 20 million tons, but China's crude steel production has reached 1 billion tons per year, scrap production can not meet the short process of raw material demand.

The incomplete steel recycling system is also one of the reasons for the insufficient production of scrap steel, China's scrap steel recycling and processing industry started late, the development time is short, in 2012, the Ministry of Industry and Information Technology formulated and issued the access conditions for scrap steel processing industry, as of 2020, a total of 478 enterprises to become the Ministry of Industry and Information Technology access enterprises; At the same time, the relevant departments also encourage all kinds of capital to enter the recycling, sorting and processing of renewable resources, and support steel enterprises to cooperate with scrap recycling enterprises to build integrated scrap processing and distribution centers; In general, China's scrap steel processing industry is still in the early stage of development, and the power of scrap supply is still quite limited.

There is also a mismatch between the application of short-process steelmaking technology and China's power structure and steel product demand. First, the average steel production time of the fourth generation electric furnace is 55-60 minutes, and the smelting cycle is longer than that of the converter. Second, the power consumption is 500KWH/t, which poses greater pressure on the local power grid; Third, the current short-process production is mainly suitable for rebar, and can not meet the diversified production needs of iron and steel products in our country.

However, with the degree of urbanization reaching a higher level, the increase of scrap in circulation, the superposition of China's power structure transformation and carbon trading market, the production process will gradually change to a short process, and become the fundamental means for the steel industry to achieve carbon neutrality. In terms of urbanization rate, compared with the development process of developed countries, with the urbanization rate of developed countries reaching more than 70%, after long-term accumulation, the economic circulation link began to produce a large amount of scrap steel, scrap supply increased, cost decreased, and short-process production represented by electric furnaces developed rapidly. At the same time, combined with the transformation and adjustment of China's power structure under the "dual carbon" goal, with the increase in the proportion of non-fossil energy power generation, the steel industry as a high-energy-consuming industry, the transformation to a short process means that it can enjoy more carbon emission reduction benefits brought by clean power. Finally, after the steel industry enters the national carbon trading market, the carbon price increase will indirectly increase the cost of the long process and encourage steel enterprises to increase investment and application of the short process.

Technology upgrade: low-carbon production, CCUS technology to assist the steel industry to reduce carbon

The process of iron making is a chemical reaction process in which carbon monoxide is used as a reducing agent to reduce high price iron to iron. The process of steelmaking is to adjust the proportion of alloying elements through oxidation reaction to form steel with specific physical and chemical properties. In the oxidation process, greenhouse gases are released and carbon emissions are generated. From the above two reaction processes, it can be seen that whether it is a long process or a short process, carbon emissions are unavoidable in the current production process.

Since the process of steel production cannot completely eliminate carbon emissions, in addition to the transformation of the long process to the short process, other supporting source reduction and sink enhancement technologies also need to be applied to the production process. These technologies include improving pellet ratio, oxygen enrichment of blast furnaces, improving waste heat and energy utilization efficiency, direct reduced iron DRI, hydrogen enrichment metallurgy, full hydrogen metallurgy, CCUS technology, electrolytic iron ore, etc., mainly through auxiliary production process to improve energy efficiency and direct absorption of carbon emissions to achieve carbon reduction, but at present, many technologies are immature and high cost. It is difficult to be the main means of carbon reduction in a short period of time.

Financial support: The importance of green finance

The low-carbon transformation of the steel industry requires trillion-level investment, and green finance is essential to help the steel industry achieve carbon neutrality. The low-carbon transformation of the steel industry may include the transformation of electric furnace technology, pellet instead of sintering, direct reduction of iron, hydrogen enrichment to improve the energy efficiency of blast furnaces, improve the utilization efficiency of waste heat and energy and the proportion of self-generated electricity, etc., which requires about trillion level of investment according to Warburg Securities. This level of investment is difficult to complete by enterprises alone, and it will inevitably need the help of green finance.