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This is the full transcript for season 7, episode 4— Green steel: Structural change — of the Quartz Obsession podcast.
Gabriela: Green tea has a variety of health benefits. Green houses use humidity, sunlight, warmth to grow plants. But green steel, I don’t know, is it steel, you’ve painted green? I’m actually just grasping at straws on that last one, Britney. Am I on the right track?
Britney: Not quite green-colored steel, but now you’ve got me thinking about green pipes from Super Mario, the ones that they jump over and transport in, and also Flappy Bird.
Do you remember when you had to move the bird through green pipes? That’s what I’m thinking of. But that’s not quite what green steel is.
Gabriela: I guess we’ll figure it out somewhere along the way..
Britney: Yeah.
Gabriela: I’m Gabriela Riccardi, the host of Quartz Obsession Season 7, where we’re taking a closer look at the technologies and ideas that define our lives.
So, steel yourselves, listeners, because today I’m talking to Britney Nguyen from Quartz about green steel.
What is green steel?
Gabriela: Obviously, green steel is not steel that you just turn green for St. Patrick’s Day, like the way that we do for rivers. That was last month, anyway. So, honestly, what is green steel? Just educate me here.
Britney: So, green steel means that it was steel produced in a way that cuts carbon emissions from the process. Steelmaking is actually one of the world’s dirtiest industries. It’s known as a hard-to-abate industry, and that includes cement and petrochemicals as well. Altogether, these industries are responsible for about 20% of global carbon emissions, and traditional steelmaking itself contributes to 8% of global CO2 emissions.
Gabriela: OK, so how does it do that?
Britney: So in traditional steelmaking, iron ore is mined from the ground. That needs to be reduced to iron oxide. So, it’s heated with coal or coke in a blast furnace to separate iron from the oxide. So, the carbon monoxide in coal takes out oxygen and that becomes CO2. That’s one source of carbon leakage in the steelmaking process, and another source of CO2 emissions is in the steel mill where a lot of heating and cooling happens. And this is done to create different characteristics of steel, such as how strong it is, how flexible it is, how well it resists rust. So steel produced for an electric engine is going to be different, it’s going to have a different composition than steel produced for, like, front car parts, or steel used to build railroads, but both steps are really energy intensive and involve a lot of fossil fuels, a lot of heating of fossil fuels. And of course, that releases CO2.
This process was explained to me by the Swedish engineer that I talked to a few years ago for a story I did at Business Insider on this Swedish company, it’s called H2 Green Steel, and they’re building this green steel factory in this town called Boden. It’s in the north of Sweden, outside the Arctic Circle, and they’re building this steel factory that we’ll get into.
But I talked to Olof Hernell, he’s the chief digital officer there, and he explained this process to me. I thought it was so interesting when I did the story, which wasn’t even about green steel, it was about hiring there.
Gabriela: I kind of love that just like, around the perimeter of the Arctic Circle, we’re like, building a factory from the ground up that’s going to totally revolutionize our steel practices.
How much do we rely on steel?
Gabriela: And that makes me wonder, Britney, you’re kind of gesturing here at how much steel the world makes. And it’s obviously a material that like so many of our structures, so much of our infrastructure, so many of our buildings, they all rely on. Do you have any numbers around the way that we produce steel? How much non-green steel do we make, if you can estimate that at all, and what kind of effect does that have on the planet?
Britney: Each year, about 2 billion tons of steel is produced globally.
Gabriela: Wow.
Britney: Yeah, a lot of it. And it’s in everything, like you said. So, honestly, 2 billion tons sounds like a lot, but I just can’t even imagine that. I guess it’s on our roads and just all over the ground and the buildings that we make. So yeah, each year about 2 billion tons of steel is produced globally.
There’s a report from the European Parliament that I was reading that said producing one ton of steel through the traditional steelmaking process emits about 1 85 tons of CO2 on average.
Gabriela: Holy cow.
Britney: Yeah, so it’s almost double the amount of CO2 that’s being emitted for each ton of steel. That report was from December 2020, so at the time it said in 2018, for example, the global annual production of steel amounted to about 1.8 gigatons of CO2 emissions, and that was mostly steel produced in China and in the EU from countries like Germany, Italy, France. And of course, CO2 emissions are a huge driver of climate change. It’s all over the news, how we’re breaching the limit set by the Paris Agreement of how warm the Earth can get.
So, yeah, that’s definitely the biggest impact, the CO2 emissions that come from the steelmaking process. It’s driving climate change, and that’s not great news for the environment.
Gabriela: So as the globe is putting all of this energy into fighting some of, you know, our dirtiest practices that contribute to climate change, it feels almost Herculean to try to tackle this whole steel industry.
You know, I’m starting to realize, like, steel is totally ubiquitous. It makes up our homes, it makes up our schools, our hospitals, our office buildings. We build our cars out of it, we make trains from it, buses from it, it almost feels like we wake up in one steel box at home, we get inside another moving steel box, we end up at another steel box.
We obviously need to think outside of these steel boxes — move on to green steel and these techniques that are being pioneered to make our steel more sustainable.
What is green steel and how is it made?
Gabriela: So how is green steel made?
Britney: I’ll go into H2 Green Steel’s process that was explained to me by Olof and Marita Nilsson who works on their hydrogen technology team, mainly with electrolyzer technology at H2 Green Steel as an alternative to traditional blast furnaces, which is what steel is produced in.
They use this process called DRI, which stands for direct reduction of iron. It operates at a lower temperature. It’s a technology that already exists today, but usually runs on natural gas. But they’ve found that it can also run on hydrogen. So iron ore is reduced with hydrogen instead of with coal or coke.
And hydrogen, of course, lends itself to H2 Green Steel’s name. It’s H2. So you get hydrogen oxide when it’s reduced. So as I mentioned before, when iron ore is reduced, you get iron oxide, then the carbon in the coal takes out the oxide, that becomes carbon dioxide, or CO2. But then when you reduce it with hydrogen, you get hydrogen oxide, and that’s another name for water. So basically you’re getting iron and water.
Gabriela: So as the byproduct, we’re going from carbon dioxide to just That’s amazing! So they’ve just found a way to, like, swap out coal, put in hydrogen instead, and like, we’ve got a totally clean product coming out of this. That feels totally revolutionary.
Britney: Through the process, they hope to reduce carbon emissions by 95%, so there will be a tiny bit of carbon still somewhere in the process. But again, you know, when you’re producing a ton of steel, you get almost twice the amount of carbon emissions from it. So yeah, Olof explained to me, you know, through this process that they hope to take that number down to about 100 kilos of carbon.
Gabriela: What were we talking before?
Britney: That was two tons of CO2 per ton of steel. So with this process, it would be below 100 kilos of CO2.
Gabriela: Oh my god.
Britney: Yeah.
Gabriela: That just sounds so dramatic.
Britney: It does. 95% is huge.
Gabriela: Yeah! And you think about it, like, I can’t believe that just making this one fundamental material that we use and, like, all the products that quite literally surround us. We’re casting off double the amount of pollution as we get of product and instead we’re going to reduce the amount of pollution by 95%.
That’s just like, that sounds tremendous to me.
Who else is working on green steel?
Britney: Yeah. This isn’t like a new concept, but at H2 Green Steel, it’s the first attempt to, like, really commercialize this, take this large scale. And so it’s really exciting to look into it. And of course, they’re not the only company working towards this.
It’s not yet a huge effort, but there is another company in Sweden. It’s called SSAB and they actually have a demo plant in the north of Sweden. I think it’s lower than the Boden plant that H2 Green Steel is working on, but they have already demonstrated this technique, this technique of using hydrogen to reduce iron ore.
And they actually produce steel in this way for Volvo to use in truck manufacturing. I think they did that in, like, August 2021 and they use their HYBRIT technology and that stands for hydrogen breakthrough iron making technology.
Gabriela: Wow.
Britney: So even though this factory is still in production and these efforts are still being made, it’s something that people have been working on and are working on and it seems promising.
So yeah, it’s very exciting. It’s a cool space.
Gabriela: So yeah, this is just fascinating to me. So, you’ve obviously touched on this one method as, like, kind of our best shot at commercializing green steel and producing it at scale. I know there are some other methods in the works. In the U.S., I know that there’s work where one firm wants to replace coal with electrons.
So instead of hydrogen, they’re looking to electrons in an electrical process. In Brazil, they’re doing a bit of a swap where some steel mills are using what’s called biochar, which is made from agricultural waste. So we’re looking at a more circular, reusable process. But most notably, we’re talking about this process that’s being pioneered in Europe, and particularly in Sweden, where we’re turning to hydrogen instead of coal in our furnaces to produce green steel.
So, can you take me a little bit through, like, the relatively short history of green steel? When were some of these techniques introduced, invented, can we get into the history?
How did the green steelmaking process come about?
Britney: So as I touched on before, SSAB has their demo plant that they used to produce steel for Volvo. That was around August 2021, H2 Green Steel was founded in 2020.
So as you said, these are relatively new companies. And yeah, I’m glad you touched on the U.S. I believe we’re talking about Big River Steel in Arkansas. They’ve been producing steel, not with hydrogen, but with electricity, like you said, for almost a decade. These efforts have been in place for a while now, but I think it’s just now that it’s growing on a commercial scale in these recent years and it’s still in the future.
So even in China, there’s a steel maker called HBIS and they said last May that they had successfully produced steel through the DRI process. And Boston Metal as well is another U.S. company that is looking to electricity to reduce and melt iron ore. So yeah, there have been a couple small initiatives around producing green steel in the past few years, but nothing yet at the level of the steel mill that H2 Green Steel is building in Boden. This is more, I feel, of a futuristic project. I mean, even though, you know, like I said before, this knowledge of, “Hey, we can use hydrogen in this process,” it’s been in the works, but I think the history of green steel is more of a futuristic concept.
It’s kind of exciting, so…
Gabriela: Fascinating.
Britney: Yeah.
Gabriela: We’re jumping on it early. I love it.
What are the drawbacks involved in green steel?
Gabriela: Obviously, there’s a lot of challenges ahead just in developing the technology, adapting it to scale, getting all kinds of manufacturing industries to adopt it. Are there any drawbacks to green steel that we can see right now? For the climate, for steel producers, for anyone else?
Britney: So of course with anything good, it seems that money is always kind of an issue there.
So one of the downsides of replacing coal with hydrogen obviously would lead to higher steel prices. The European Parliament estimates that it would increase prices about a third. However, the report said that it actually expects that price gap to narrow in the coming years, and by 2030, it could even disappear.
So that’s five years from now.
Gabriela: Wow.
Britney: Yeah, so this is 2020 numbers, but according to the report in terms of production, one ton of steel costs about 400 euros. That includes about 50 euros required for the coal. So if you replace that coal with hydrogen, that would be about 180 euros worth of hydrogen at the current best price. So it is more expensive.
Gabriela: Okay.
Britney: But one of the reasons why they think this price gap could close soon is because of carbon emission pricing. And that’s an effort by governments to encourage driving down the use of carbon and carbon emissions. It’s a method that is being used to encourage companies to cut down, especially after the Paris Agreement, which I mentioned earlier, and this commitment by all these countries that we have to curb our CO2 emissions because it’s driving climate change.
So, that’s one of the ways that they could cut down this price. Another thing is producing the hydrogen. So, at H2 Green Steel, actually, their factory is integrated. So, they plan to have, like, three separate parts of the factory. And one of those parts is the hydrogen-making. So, when you produce hydrogen, it also uses natural gas. So, they have a system to produce hydrogen with electricity instead.
When will green steel become a reality?
Gabriela: So electricity keeps coming up. I love that they’re, you know, like sort of circumventing a system by bringing all parts of the production in house. It sounds like there’s a couple of different routes that we can take to tackle this price differential. Like you mentioned before, it might just be the work of governments to offer subsidies, tax breaks, or other financial incentives to just kind of close that price gap.
So, you know, companies all over the world that are manufacturing things with steel and are looking at, “Well, here’s the old steel, the old dirty steel. That’s, well, you know, that’s a nice bargain compared to this beautiful, glistening green steel that’s just a little more expensive.” I love that we’ve got, like, a couple paths here to close that price gap and make green steel make a lot of sense, not just for the environment and for the planet, but,you know, also not drive people away because it’s just a little bit more costly.
Britney: Yeah, for sure.
Gabriela: So we feel like we’re in this moment where we’re just at the beginning. Even the story of green steel’s history seems to be pointing towards the future. Future development, future adoption, future ubiquity? So, what are some of your predictions for what the future of green steel looks like?
Britney: Again, currently the global production of steel is at two billion tons. That demand is expected to rise over the next few years. There was a report that I read that expects it to rise by 30% by 2050. And so with H2 Green Steel’s, efforts. So right now they’re working on their factory. They hope to start producing 2.5 million tons of steel starting in, like, 2026, and then eventually they want to double that to 5 million tons a year. But zooming out, that’s only about 5-6% of Europe’s demand itself. And then going back again to that huge 2 billion tons number, that’s just a blip in the global appetite for this product.
Gabriela: It feels like a giant steel boulder that we’re trying to chip away at with a tiny, tiny little pickaxe.
Britney: Thinking about how many steel producers would it take to make this switch, how long is it going to take? That also depends on the funding that can be secured by these companies. How many companies are going to pop up in the next few years? In Sweden, in Europe, in the U.S… how do we get people on board for this?
And then again, going back to the money issue, how are steel prices going to change? What incentives are we going to use to drive companies to seek alternative materials to carbon?
Gabriela: So how many steel producers do we think we need to switch to sustainable manufacturing? Let’s pull out like a pen and paper.
Britney: Oh gosh.
Gabriela: Can you make any kind of estimate or it’s just, you know, we’re talking about gargantuan numbers here. Steel surrounds, us as we talked about, our steel boxes.
Britney: Yeah. I mean, I would take that 2 billion tons number. Let’s just assume that a bunch of companies are going to be exactly like H2 Green Steel producing about 5 million tons a year.
I don’t have a calculator on me. I think the hope there right now is to show that this effort, the work that they’re doing, is possible, that we can produce steel in a more sustainable way. And that has a domino effect for the other hard-to-abate industries. Like I mentioned before, so in cement, petrochemicals, in aviation, even all these industries that we know are emitting a lot of CO2.
And I think one of the things that I really liked from my conversation with Olof that he told me that I’ve thought about a lot is that the difference between the CO2 emissions from steel and other things that we do in our everyday lives, our consumption, our travel, they’re different things. So, you know, we can reduce our travel. We can reduce the amount of driving that we do. We can switch to public transportation. We can cut our flights. You know, they have those flights that you can see how much carbon you’re cutting if you take a specific flight. I’ve seen that on my end. That’s becoming a bigger thing now, which I think is very interesting.
And then also like we can change the way we eat. So I have friends I know who stopped eating red meat or reduced their consumption of it following No Meat Mondays because It’s a huge emitter of CO2. So all these behaviors we can change, but Olof said, you know, we can’t stop building bridges and houses and vehicles. We can’t stop building these things. I think looking for alternatives and proving that they are possible is very exciting.
Gabriela: It seems thrilling, honestly. We’re not locked into, like, these existing boxes of how we think about it. Think about steel revolutions dating back hundreds and hundreds of years. Why should we be running steel mills, the same way that we did, you know, in the 1800s, there’s room for evolution and revolution and thinking further ahead for the good of the climate, the good of the planet, and the good of our lives.
Britney: Yeah. And this is something else that I was thinking about the whole time I was looking into this.
So of course it sounds great, you know, changing these industries that have been in place for over a hundred years. The way that we produce things. And I think a big part of making that change, big part of the effort, is also education. Teaching people not just, “Oh, we’re cutting carbon emissions, but showing that this is still going to keep jobs.”
You can evolutionize the methods that are already in place, and as someone who is from the rural south and who knows that these industries are big down there and people are afraid of losing these jobs. I think we could meet in the middle and sort of show that, you know, we’re not trying to eliminate you. We’re trying to evolutionize and I think there’s nothing wrong with that.
There’s a way, I think, to make everyone happy about the environment. And about things that they have spent a lot of their lives doing.
Gabriela: That feels like an important point.
Britney: Yeah.
Gabriela: Relying less on dirty steel isn’t going to close factories or abolish jobs. It’s just going to change them a little bit and make it so that we’re almost investing in an industry for it to be able to sustain itself for longer. Exist peacefully in the context of our environment and our planet for much longer than if we were continuing to pump carbon dioxide into the atmosphere with every ton that we produce.
Britney, this has just been so fascinating to hear about. I didn’t think that I wanted to wander mentally into, like, steel mills and think about what we’re going to be shoveling into the furnaces there, but I’m totally fascinated by it now. I really look forward to the day that my stainless steel refrigerator, or watch… I can say that that’s my green eco-friendly product.
Britney: Yeah, it’s exciting to think about. For me too, I mean, even though I wasn’t able to get super sciencey or mathematical with calculating the amount of green steel mills we need to save the planet, it’s still a really fascinating topic and something that I hope we see more of, for sure, in the future.
Gabriela: Calculations or not, you got me convinced. Thank you again, Britney. This has been such a treat.
Britney: Thank you for having me and thank you to everyone who was curious enough to click on this episode about green steel!
Gabriela: Britney Nguyen covers tech for Quartz. This episode was produced by Ready Freddie Media. Additional support from Juan Palacios, Quartz Executive Editor Susan Howson, and Head of Video David Weinstein. Special thanks to Olof Hornell. and Marina Nillsson from H2 Green Steel. Our theme music is by Taka Yasuzawa and Alex Suguira.
If you like what you heard, follow us on Apple Podcasts, Spotify, or wherever you’re listening, and tell your friends about us. Are you doing anything for Earth Day? Try sharing this episode with five equally Earth minded friends, who could share it with five of their friends, who could share it with five of their friends. And maybe we can make the world a little bit greener. Then, head to qz.com/obsession to sign up for Quartz’s weekly obsession email and browse hundreds of interesting backstories. I’m Gabriela Riccardi. Thanks for listening.
Britney: I wanted to be a scientist when I was younger. I wanted to be a chemist because I was very intrigued by why I wasn’t allowed to swallow mouthwash. Like I wanted to understand the way things were made. And so for me when the story came along and then now when I was looking into this podcast was really exciting because this is kind of full circle. I did journalism because I was not good at science. The reason I didn’t become a chemist is because I’m not good at equations, unfortunately.