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The Explosive Growth of Steel Production in China: Why It Matters

China and Steel Growth

There is no material more fundamental to industrial civilization than steel. Modern buildings, ships, cars, planes and bridges would all be unthinkable without steel, and as pointed out by Allwood and Cullen in their fine recent book on materials production we currently have no viable substitute materials that could perform steel’s multiple functions. We are still very much living in the iron age.

Global production of steel has now reached almost 1.5 billion tonnes each year. The geographic make up of steel production however has changed profoundly in the last decade. In the year 2000 China produced 15% of the world’s steel. Today almost half of the world’s steel is made in China, with Chinese steel production increasing by over 500% since 2000. The astonishing levels of steel consumption in China is illustrated by the fact that 60% of rebar, used in buildings to reinforce concrete, that is produced each year is now consumed in China.

Image

 

Energy requirements of steel manufacturing in China

Last year China produced 708 million tonnes of steel. On average each tonne of steel produced in China requires the equivalent of 0.69 tonnes of coal in energy consumption. In other words China’s steel industry consumes the equivalent of 500 million tonnes of coal each year, and this being China more or less all of the energy used to make steel comes from coal. China’s steel industry consumes almost 7% of the world’s coal, and if China’s steel industry was a country it would rank 6th globally in total primary energy consumption, ranking above both Germany and Canada. A comparison of this level of energy consumption with current global consumption of wind and solar energy is sobering. 

As with all comparisons of energy consumption, methods and calculations should be laid out transparently. Here I will compare the total primary energy consumption of China’s steel industry with global primary energy consumption of wind and solar. In 2012 wind and solar electricity production was 614 TWh (trillion watt hours). However to make a more apples to apples comparison we should ask how much coal would be needed to produce this electricity. Using this approach current annual global energy consumption from wind and solar works out as 200 million tonnes of coal equivalent (using EIA’s conversion methodology and BP’s assumptions for the average thermal efficiency of power plants).  Therefore growth in global energy consumption from wind and solar since 2000 has been approximately half of the increase in energy consumption by China’s steel sector alone. A stark illustration of how little has been achieved in the transition to low carbon energy.

This rapid growth in Chinese steel consumption poses another problem. We are not only fundamentally dependent on steel production, but as Vaclav Smil points out steel production is more or less fundamentally dependent on the large scale use of coal, with no prospect of a transition to low carbon methods of steel production in the short to medium term. Calls to fully dismantle the coal industry must consider how we can make steel without coal, because currently no methods seem particularly feasible. Globally about 1 billion tonnes of coal is used to produce steel, representing 14% of total coal production, with steel and iron production equating to over 6% of global carbon dioxide emissions. This figure is much higher than that of the aviation industry, yet have you ever read an op-ed calling steel manufacturing a rogue industry?

The vast disparities in steel consumption in the world today suggest that a significant increase in overall steel consumption is inevitable and probably desirable. We are however reaching the limits of how efficiently steel can be produced, and despite multiple opportunites to improve the rationality of steel use it appears clear that we will need to mine hundreds of millions of tonnes of coal each year to produce steel for decades, and more likely, generations to come. These realities should be borne in mind by those who claim there are no significant barriers to 100% renewable energy.

Data sources

World Steel Association

BP Statistical Review of World Energy

Content Discussion

Robert Hargraves's picture
Robert Hargraves on November 26, 2013

A good, modern book that presents analyses of the problems and approaches is Sustainable Materials: with both eyes open, by Julian Allwood and Jonathan Cullen. It’s in much the same style as David MacKay’s Sustainable Energy: without the hot air. You can buy it or read it online. http://www.withbotheyesopen.com/.

Schalk Cloete's picture
Schalk Cloete on November 26, 2013

Good points. I think everyone who has seriously considered our longer term energy future (aside from a few 100% renewable energy dreamers) acknowledge that we will most probably still be burning large quantities of fossil fuels by the end of this century.

Fossil fuel applications such as direct industrial heat (e.g. steelmaking), air travel, heavy shipping, heavy machinery and load-following powerplants will be very difficult to replace by any alternative energy source. These applications account for roughly half of all fossil energy consumption and we have to be very realistic about how we will treat these energy applications (which really underpin our industrial civilization) in the energy transition. 

Ed Dodge's picture
Ed Dodge on November 26, 2013

Keep in mind that carbon is a fundamental ingredient in steel.  So when coal and coke are used in the steel production it is not simply as a heat source, one needs to combine iron with carbon to produce the steel alloy.

http://www.worldcoal.org/coal/uses-of-coal/coal-steel/

Ed Dodge's picture
Ed Dodge on November 26, 2013

Keep in mind that carbon is a fundamental ingredient in steel.  So when coal and coke are used in the steel production it is not simply as a heat source, one needs to combine iron with carbon to produce the steel alloy.

http://www.worldcoal.org/coal/uses-of-coal/coal-steel/

Jean-Marc D's picture
Jean-Marc D on November 26, 2013

That’s just what Vaclav Smil says in the paper Robert references.

Nathan Wilson's picture
Nathan Wilson on November 26, 2013

The difficulty of replacing fossil fuels in these applications (steel & concrete making, aviation fuel) means that it is all the more important for us to reduce fossil fuel use in those areas where it is most feasible:

  • Efficiency of new homes and building.
  • Baseload electricity (ie. nuclear is more desirable than renewables with fossil backup or coal with partial CC&S).
  • CC&S for electrical peaking plants.
  • CC&S for steel & concrete plants.
  • Electrification and carbon-free (e.g. H2 and NH3) fuels for automobiles and trains.
  • Carbon-free fuels for trucks, heavy machinery, combined heat & power, industrial & building heating.
donough shanahan's picture
donough shanahan on November 27, 2013

In the simpliest of terms steel is simply very low amounts of carbon mixed with iron. When you produce iron out of a blast furnace (pig iron) it will typically contain say 4% carbon and you want to reduce this typically to a range of 0.1-2% carbon. You do this in a steel shop by blowing oxygen through liquid pig iron.

The purpose of coke (coal gets converted to coke) in a blast furnace is to provide a carbon source so that iron ore can be reduced (from say Fe2O3). Many of the iron ore and coke reactions are exothermic as is the consumption of coke by the oxygen in the hot blast. Due to using carbon as the reducing agent, you get some carried over into your iron. As I said the next step is to get rid of the excess carbon.

donough shanahan's picture
donough shanahan on November 27, 2013

The main driver for low carbon steelmaking in Europe is ULCOS. The proposals here except for direct electrolysis are reliant on carbon capture. However the expectations are

The results of ULCOS II can potentially be rolled out into production plants some 15 to 20 years from now.”

Reducing the carbon emissions from steel and the energy used to make it are thus decades away at best.

 

Stephen Nielsen's picture
Stephen Nielsen on November 27, 2013

In even the short term future the high amounts of energy needed for steel manufacture is going to become a non issue.

Exponentially advancing materials science is rapidly replacing steel with materials that are stronger, more flexible, more easily manufactered and require far less energy to form, shape and utilize.

graphene

composites

super strong plastics

All anyone has to do is place the term “new materials to replace steel” into any search engine – literally thousands of results

Robert Wilson's picture
Robert Wilson on November 27, 2013

Stephen

Evidence free asertions and telling me just search google is not very helpful. Perhaps you could actually provide some links instead of this kind of time wasting comment.

Tim Havel's picture
Tim Havel on November 28, 2013

This article should have mentioned the fact that about 85% of all steel waste is recycled in the USA. Even in the area of steel manufacturing itself, there are now signs it could be done a lot more sustainably: http://www.technologyreview.com/article/515411/eco-friendly-steelmaking/

donough shanahan's picture
donough shanahan on November 28, 2013

From what I am aware of, overall recycling rates are in the 30-40%.

If this works it would be fantastic. The only other way for carbon free steel is via carbon capture and this is proving difficult. The economics of steel may not support CCS. The problem with this technology as with any steel disruptive will be scale. The energy use of traditional electrolytic processes for say Aluminum is huge but overall savings are reached due to better quality and lower overall costs.

The problem has always been for steel making that electrolysis of Iron ore while attractive on the energy and capital side (no coke ovens, sinter plant or blast furnace), the process required extortionate amounts of energy and expensive, non-recoverable electrolyte. Resolving the latter would seem to be the route the researchers are after and if they can crack it, fantastic.

 

 

 

Robert Wilson's picture
Robert Wilson on November 28, 2013

Tim

Recycling of steel is vitally important, and this is one of the things I mean by more rational use of steel. However the continuing increase in demand for steel makes it clear that is very difficult to stop digging up a couple of billion tonnes of iron ore, and probably more, each year. A close to steady state where we can largely get steel from recylicing is desirable, but is many, many decades away.

Robert Wilson's picture
Robert Wilson on November 28, 2013

Just when I was feeling optimistic. China’s cement production is something astounding as well. I haven’t looked into it in a long time, but now that you have prompted me I might see if I can get something written on the subject.

In general these debates are centred too much around electricity. When you start adding up all the stuff we don’t know how to decarbonise you quickly realise it adds up an uncomfortably large number. And potentially we won’t a find a solution either. No end of problems.

Nick Grealy's picture
Nick Grealy on November 29, 2013

Good to see Robert W back after a sabbatical (?).

Natural gas, as per usual, supplies some anwers here.  http://www.businessweek.com/news/2012-12-30/shale-gas-revolution-spurs-wave-of-new-u-dot-s-dot-steel-plants-energy

Using DRI instead of coal helps a lot.

Secondly,  the abundance of natural gas promises new materials in carbon fibre and graphene for example, that could replace steel in many applcations.  Greens certainly ignore the industrial uses of natural gas, which account for a third of gas use.  No carbon fuel means no steel or cement but gas instead of coal cleans both up a lot.  Meanwhile no natural gas means no plastic and no fertilisers either.

donough shanahan's picture
donough shanahan on November 29, 2013

Overall the emissions for cement industry are usually given a number similar but slightly higher than steel. In and around 5-7% of total worldwide emissions is a figure I see a lot. Around 50% of these emissions come from the chemcial reactions inherent in the process with around 40% coming from the energy source. 

http://epubs.scu.edu.au/esm_pubs/1447/

Robert Wilson's picture
Robert Wilson on November 29, 2013

Nick

Please state your financial interest in natural gas.

 

Nick Grealy's picture
Nick Grealy on November 29, 2013

Does anyone else here have to perfrom financial self autopsy?

I support natural gas.  It’s the best thing since sliced bread.  As for my financial interest, it’s a problem: it’s not nearly as big enough as I’d like.

Nick Grealy's picture
Nick Grealy on November 29, 2013

Does anyone else here have to perfrom financial self autopsy?

I support natural gas.  It’s the best thing since sliced bread.  As for my financial interest, it’s a problem: it’s not nearly as big enough as I’d like.

Robert Wilson's picture
Robert Wilson on November 29, 2013

Well Nick,

You are paid to promote natural gas. I don’t think it is a big ask for people to declare these things on a discussion forum.

Robert

Nick Grealy's picture
Nick Grealy on November 29, 2013

I’m paid to a great extent because I have an opinion and that my enthusiasm for shale predates me getting paid. I would be doing this from my laptop in between cab fares, although not as often.  Or would I then have to declare an interest in lower petrol prices?  Or God forbid I drove a CNG fueled cab.  That would make everything I say suspect.  BTW, if I wanted to hide my funding, a rather obvious place many people here seem to start is with their name. How come anonymous commenters aren’t held to that standard.

 Anyway to the matter at hand:  If we produce steel, it’s better to do it with gas instead of coal.  Isn’t it? Is that wrong to point out?  It’s also probably good to look at carbon fiber replacing steel in some applications.  They could actually make it from carbon captured from coal I assume, although I imagine, not being a scientist though, that natural gas is a more efficient route.

Finally carbon fiber will make vehicles, planes, engines and things lighter and thus more energy efficient to push around.  That’s good too isn’t it?

 

donough shanahan's picture
donough shanahan on November 30, 2013

While DRI is an interesting technology that can use gas, it has been around for decades and still the predominant technology is a blast furnace supported by sinter and coke ovens. In the USA, a small few blast furnaces has been converted to use natural gas instead of pulverised coal as the injectant at the tuyere, the latest furnaces to be rebuilt are still using the same setup due to the sheer cost already sunk into an integrated steel works. The chance for DRI was when China was massively expanding its fleet and it did not make it. I have a funny feeling that most DRI projects will only be viable as greenfield projects.

donough shanahan's picture
donough shanahan on November 30, 2013

It is ‘better’ to use coal instead of gas but from a technical point, DRI has barely broken into the market despite a massive greenfield build across the world. The capital already sunk into a brown field site means that dri is rarely suitable for such and it also produces higher carbon iron which is a further technical hurdle for existing plants. 

So despite that fact that DRI is a better process, it really came to late to the party and its advantages were not enough to lead into into a major process. 

Simon Friedrich's picture
Simon Friedrich on December 3, 2013

Government needs to rethink its allocation of research dollars if we are to reduce greenhouse emissions from these important energy intensive industries. The Federal government has over the decades invested billions of dollars on biofuels research, development and demonstrations. These are energy sources that can only increase greenhouse gas emissions.  Basic industries such as steel have received pittance over same period.  Alternative process pathways for these energy intensive industries to radically reduce greenhouse gas emissions require research investments that even consortium of industries will not fund without long term government support.

Nathan Wilson's picture
Nathan Wilson on January 16, 2014

Odd that there is no mention of hydrogen.  Zubrin’s book, “The Case for Mars” mentions reducing iron ore with hydrogen as an option for Mars.  It should work fine on Earth too.  Obviously, hydrogen costs more than fossil fuels, and is only expected to come close when made from nuclear power.  Perhaps there is no cost advantage compared to the aqueous electrolysis mentioned in Donough’s comment below.

Robert Wilson's picture
Robert Wilson on January 17, 2014

Nathan

The title of the book you mention “The Case for Mars” hints at why I have not mentioned hydrogen, or some other proposed methods. Almost all of these are literally at the so costly and technically challenging that we would only consider doing them on another planet stage.

Blast funace primary coal production is over a century old. During this time these processes have become ultra efficient, pushing the boundaries of what is theoretically achievable in terms of energy efficiency. Even if we were to have breakthroughs in one or more of these technologies, we would still be looking at two to three decades before they gain any real market share. And after that it would take a significant period for these technologies to diffuse due to the inertial nature of these things. So, it would take something drastic to change my conclusion that we are probably looking at fossil fuelled steel making for decades, and more likely, generations to come.

Jean-Marc D's picture
Jean-Marc D on January 17, 2014

Well there’s a lot of capital invested in the existing blast furnace, also the Chinese did love coal until very recently when they began to have some pollution concerns (but that does not stop them from planning many more coal plants), they comparatively produce little gas.

So nobody had a really major reason to invest into DRI, therefore the lack of developement is not the proof it’s not viable. In a future with a *real* motivation to replace the standard blast furnace, it could have a place. The question is if that day will really come and if we’ll have enough gas.

Nathan Wilson's picture
Nathan Wilson on January 21, 2014

Note that the DRI process mentioned upthread uses syn-gas (H2 and CO, made from natural gas) to reduce iron ore to metallic iron.  Apparently it is actually used today in India.  So I feel partially vindicated since hydrogen is doing part of the work.

Of course I do not dispute the multi-decade timeframe that a large-scale transition in global steelmaking would require, nor do I dispute that for coal-producing countries the coal route is no doubt cheaper, and there is no doubt that sustainable H2 will cost more than syn-gas from frac’ed natural gas.

So the situation with steel is similar to peaking electricity: other technologies are possible, but none are likely to match the cost of the fossil fuel route (ignoring hydro, which is small).

Jean-Marc D's picture
Jean-Marc D on January 22, 2014

An interesting aspect of DRI is that’s it’s partly a carbon capture program. Opposite to most CC options, it has a decent answer to the “how to do store the captured carbon” part of the problem.

Nathan Wilson's picture
Nathan Wilson on January 22, 2014

Are you talking about the carbon that alloys into the iron?  It only stays if the end product is cast iron; for normal steel or wrought iron, most of the absorbed carbon must be removed in subsequent processing (by exposure to oxygen or air, to form CO2).

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