Steel And Chemical Companies Are Preparing To Decarbonize, But They Want Governments To Commit

Representatives from steel and chemical companies—two of the worst greenhouse-gas emitting industries—say they have clean alternatives under development, but they need government policies that won’t undercut their efforts.
“Policy is so very important,” said Andreas Bode of BASF, the world’s largest chemical company, “as different policy measures can be promoting the implementation of these technologies or hindering.”
BASF has lowered emissions as much as it can using conventional processes, said Bode, manager of its carbon management program. “Since we are at the thermodynamic limits of our processes, we have to have completely new processes.”
BASF is developing a furnace that uses clean electricity, instead of natural gas, to break petroleum down into the starter molecules for many chemicals. BASF is also working on a way to use clean electricity to crack natural gas to form hydrogen, a potential clean fuel, with solid carbon as a byproduct instead of gaseous CO2. And BASF plans to use CO2 to make the sodium acrylate used in diapers.
“In the R&D phase we need 10-15 years, and in the scale-up phase we need another 10 years, and this all in a high-risk environment for implementing such investments,” Bode said in a Center for Strategic and International Studies webinar.
Policies have to be responsive, Bode suggested, citing the German Renewable Energy Act that radically reduced the price of renewable energy worldwide.
“The cost of (renewable energy) production has been brought well down and it is competitive,” he said, “but meanwhile there are so many taxes and duties to be paid for using renewable energy that this is rather a hurdle.”
Chemical production is one of the three most-polluting industries, said Rebecca Dell of ClimateWorks Foundation, along with cement and steel.
The conventional process for making steel depends at its heart on a technology developed in the Iron Age: heating iron in a manner that emits a lot of carbon dioxide. Boston Metal is refining molten-oxide electrolysis, which can produce steel using clean electricity, emitting only oxygen.
That effort also benefits from abundant, inexpensive renewable energy, said Adam Rauwerdink vice president for business development at Boston Metal.
“If you’re going to electrify steel production, transportation, any of these, you need that clean and renewable energy,” Rauwerdink said, “so that’s something that’s very, very supportive of all the work that’s being done to electrify, to clean up electrification and electricity use.”
The steel industry also needs policies to be globally conscious, he added. Steel production is a global commodity because each nation wants to maintain its own industry for national security reasons. That puts all those nations in competition.
“And so if you’re going to promote, on a global basis, a clean solution, you need to think of ways of making fair playing fields across borders and how you’re going to deal with that. That’s certainly a very, very complex issue but will be critical long term.”
The Buy Clean California Act could be a model for such policies, Dell said. It requires state agencies, including public universities, to consider the carbon footprint of building materials used in their construction projects.
“This law doesn’t discriminate in any way about where the material is produced,” she said. “It just says that there is an emissions requirement performance that the material has to meet. And so this is a way of structuring a policy that doesn’t create any incentive for offshoring. There’s no way for the emissions to leak as long as your accounting protocols are robust. And so whether you make your steel in China or in California doesn’t matter. All that matters is the emissions.”
Such a policy would work well for U.S. steel, Dell added, because the U.S. steel industry tends to be cleaner than its counterparts in other nations.
But it could be much cleaner once its technology moves out of the Iron Age.
“Up front, certainly when you come to economics, the goal of our company is to try to reach a point where our (clean) process is on par directly with the incumbent process,” Rauwerdink said.
“So that’s our goal in terms of engineering and implementing the technology. Certainly there’s a gap to cover before we get there. But as you look globally at the development there’s both direct steel policy and there’s energy policy that benefits us.”
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