26 Brigitte Wolkinger et al.
of iron and steel decarbonisation is presented in Mayer, Bachner, and Steininger
(2019). This chapter aims to make an important qualitative contribution to this
discussion by revealing risks perceived and stated by different stakeholder groups,
which might emerge when it comes to the implementation of ‘climate neutral’
steel production technologies, taking into account the interrelated transition of
the energy supply sector.
In Austria, the iron and steel industry and energy supply sectors comprise
nearly half of the country’s GHG emissions, both within the ETS (Emissions
Trading System) and outside the ETS. These two sectors contribute 16% to real
gross domestic product (GDP). Within Austria’s economy, iron and steel form
15.5% of total GHG emissions and contribute 2% to domestic value added
(Anderl et al., 2017a; Statistics Austria, 2018b). The iron and steel sector also
stands out because of the high risks associated with a low- carbon transition due
to its exposure to geo- political developments, its dependence on global (feedstock) markets (especially for coal and gas, iron ores and scrap), the extraordinarily long economic lifetime of investments, and prevailing overcapacity issues.
For the steel industry there is little scope for significantly reducing carbon emissions while continuing with the current production method (Mayer, Bachner,
and Steininger, 2019). The sector therefore faces several options: either its
replacement with new business activities based on alternative materials such as
wood or polymers (demand- side measures); a switch to hydrogen- based steel
production (as fuel, feedstock or in electrolysis); the use of zero- carbon electricity; the use of biomass for feedstock (charcoal) and carbon capture and storage
(CCS); or carbon capture and use (CCU) – or a combination of all these
options. Hydrogen- based steel production is a major consideration for Austria’s
largest steel producer. As this would require a large amount of zero- carbon electricity, the transition of the Austrian electricity sector is being systematically
considered as an interrelated pathway.
The role of the iron and steel sector in a low- carbon transition
Austria’s long tradition of high- quality steel production renders the case of a
low- carbon transition for the sector particularly complex. Since 1970 steel
output has doubled, now amounting to eight million metric tons per year. Each
ton of steel produced is associated with process emissions which emerge from
chemical reactions during processing of iron ores (‘oxygen reduction’), thus they
differ from combustion emissions. The theoretical minimum process emission
intensity of the currently applied technology, a blast furnace (BF ), is about 1.3
tons of CO 2 per ton of steel (Scholz et al., 2004; Kirschen, Badr, and Pfeifer,
2011), with Austrian production being slightly above that at 1.5 tons of CO 2
per ton of steel (Anderl et al., 2017b). Hence, further efficiency efforts would be
restricted to a maximum reduction of 13% in CO 2 process emissions. Although
the emission intensity of a single ton has significantly improved over recent
decades, total CO 2 process emissions have not declined since output of the steel
sector increased much faster. Hence, the sector is still a major contributor to
of iron and steel decarbonisation is presented in Mayer, Bachner, and Steininger
(2019). This chapter aims to make an important qualitative contribution to this
discussion by revealing risks perceived and stated by different stakeholder groups,
which might emerge when it comes to the implementation of ‘climate neutral’
steel production technologies, taking into account the interrelated transition of
the energy supply sector.
In Austria, the iron and steel industry and energy supply sectors comprise
nearly half of the country’s GHG emissions, both within the ETS (Emissions
Trading System) and outside the ETS. These two sectors contribute 16% to real
gross domestic product (GDP). Within Austria’s economy, iron and steel form
15.5% of total GHG emissions and contribute 2% to domestic value added
(Anderl et al., 2017a; Statistics Austria, 2018b). The iron and steel sector also
stands out because of the high risks associated with a low- carbon transition due
to its exposure to geo- political developments, its dependence on global (feedstock) markets (especially for coal and gas, iron ores and scrap), the extraordinarily long economic lifetime of investments, and prevailing overcapacity issues.
For the steel industry there is little scope for significantly reducing carbon emissions while continuing with the current production method (Mayer, Bachner,
and Steininger, 2019). The sector therefore faces several options: either its
replacement with new business activities based on alternative materials such as
wood or polymers (demand- side measures); a switch to hydrogen- based steel
production (as fuel, feedstock or in electrolysis); the use of zero- carbon electricity; the use of biomass for feedstock (charcoal) and carbon capture and storage
(CCS); or carbon capture and use (CCU) – or a combination of all these
options. Hydrogen- based steel production is a major consideration for Austria’s
largest steel producer. As this would require a large amount of zero- carbon electricity, the transition of the Austrian electricity sector is being systematically
considered as an interrelated pathway.
The role of the iron and steel sector in a low- carbon transition
Austria’s long tradition of high- quality steel production renders the case of a
low- carbon transition for the sector particularly complex. Since 1970 steel
output has doubled, now amounting to eight million metric tons per year. Each
ton of steel produced is associated with process emissions which emerge from
chemical reactions during processing of iron ores (‘oxygen reduction’), thus they
differ from combustion emissions. The theoretical minimum process emission
intensity of the currently applied technology, a blast furnace (BF ), is about 1.3
tons of CO 2 per ton of steel (Scholz et al., 2004; Kirschen, Badr, and Pfeifer,
2011), with Austrian production being slightly above that at 1.5 tons of CO 2
per ton of steel (Anderl et al., 2017b). Hence, further efficiency efforts would be
restricted to a maximum reduction of 13% in CO 2 process emissions. Although
the emission intensity of a single ton has significantly improved over recent
decades, total CO 2 process emissions have not declined since output of the steel
sector increased much faster. Hence, the sector is still a major contributor to