Steel is the backbone of the modern economy, essential for building skyscrapers, wind turbines, planes, trains and automobiles. It’s also incredibly dirty, responsible for about 7 percent of global carbon emissions.
Experts have long regarded the steel industry as a hard-to-abate sector — a corner of the economy where phasing out planet-warming emissions is particularly tough.
Most steel plants emit carbon twice: They heat up coal to create coke, and then burn the coke in massive blast furnaces to melt iron ore.
Over the past 12 months, however, the outlook for the industry has changed significantly. Electric arc furnaces, a newer technology that uses scrap metal and electric current instead of iron ore and coke, are on the rise around the world.
About 43 percent of planned steel plants will use electric arc furnaces, up from 33 percent just a year ago, according to a recent study by Global Energy Monitor. (The news site Carbon Brief has in-depth coverage.)
Though steel manufacturing methods vary, making steel with an electric arc furnace using scrap metal, as is common, produces about 14 percent as much carbon dioxide as a traditional blast furnace, according to the report.
The main steel maker in New Zealand just announced plans for a new $180 million electric furnace outside Auckland, which will reduce the country’s steel-related carbon emissions by almost half.
ArcelorMittal, one of the biggest steel companies in the world, is building a $72 million electric furnace in Luxembourg. And U.S. Steel recently broke ground on a $3 billion mill in Arkansas that will feature two new electric arc furnaces.
The shifting mix of steel production is not yet enough for the sector to do its part to keep overall global warming below 1.5 degrees Celsius, according to estimates by the International Energy Agency. But it represents major progress in the fight against climate change.
How we got here
Cleaning up steel emissions is one area where the United States has taken the lead. More than 70 percent of American steel is now produced using electric arc furnaces.
That figure is poised to grow because of government subsidies, including the Inflation Reduction Act.
“There’s been some really good policy, believe it or not, coming out of D.C. that is incentivizing cleaner steel production,” said Philip Bell, president of the Steel Manufacturers Association.
Steel is also an important component in much of the new clean energy infrastructure that is being built with surprising speed around the country.
The rest of the world is trying to catch up. Europe last month approved more than $3 billion in subsidies for two of the continent’s biggest steel makers to build electric furnaces.
“They’re trying to make their steel industries look more like ours,” Bell said. “In Europe you’re seeing a tremendous amount of subsidies and incentives to convert inefficient, high-emission blast furnaces to electric arc furnaces.”
Cleaning up the steel industry around the world won’t be easy.
China and India are by far the world’s biggest steel producers, and they have plans to build blast furnace steel plants at a higher rate than other countries, according to the Global Energy Monitor report.
China’s economy is still largely driven by coal, and it doesn’t yet have the scrap metal supply chain needed for electric arc furnaces. An estimated 88 percent of China’s current steel production comes from blast furnaces.
In India, which has been making steel for over 1,000 years and is a major global producer, the electric grid often isn’t reliable enough for electric arc furnaces.
And in Europe, some countries are subsidizing blast furnace steel plants — which are more labor-intensive than arc furnaces — in a bid to preserve jobs.
What’s more, while electric grids in the U.S. and other developed countries are gradually using less oil and gas, it will be years before electric arc furnaces are powered by renewable energy alone.
Nevertheless, the shift underway in the steel industry is proof that the right combination of money, policy and resolve could help even hard-to-abate sectors clean up their acts.
Taxpayers are subsidizing fossil fuels more than ever
Countries around the world paid a staggering $1.3 billion to make fossil fuels more affordable in 2022, almost triple the bill from two years earlier, according to a report released today by the International Monetary Fund.
The jump was mostly a result of stubbornly high oil and gas prices since Russia invaded Ukraine.
John Kerry, the U.S. special envoy for climate change, has described fossil fuel subsidies as the “definition of insanity,” and the I.M.F. has pressured countries to ditch them for decades. Climate concerns aside, the subsidies are considered an inefficient way to help the poor. And as the world swelters under extreme heat, the urgency of the problem has grown.
Phasing out subsidies can lead people and companies to consume less fossil fuels if it’s done gradually, combined with other policies. But the way many countries quit subsidies often causes social unrest — and forces governments to backtrack.
The I.M.F. report calculated a much higher subsidy total of $7 billion when indirect costs were included — especially the amount that governments should charge to account for global warming and local air pollution. — Manuela Andreoni
The weather report
Iowa escaped much of this summer’s brutal heat, but temperatures shot up toward 100 degrees Fahrenheit this week. Residents are also facing humid conditions caused by moisture released from cornfields, a phenomenon known locally as “corn sweat.”
“I’ve worked in a few cornfields in the past, and I can tell you firsthand it does get kind of moist in there,” said Dylan Dodson, a meteorologist with the National Weather Service in Des Moines.
The latest heat wave has affected over 100 million people in the central United States and brought muggy conditions, with heat indexes at times reaching 120 degrees. Twenty states are blanketed by the “heat dome.”
Today, over one-third of Americans are expected to experience a dangerous heat index. Temperatures will begin to fall on Friday in the Midwest, leaving the Deep South to sweat it out through the weekend.
— Judson Jones