Decarbonizing steel production: the roadmap to Green Steel | Deeptech Briefing
Transforming the steel industry may be the ultimate climate challenge. Explore how deeptech is shaping the future of steel.
Hey there,
Greetings and welcome back to the Deep Tech Briefing!
Today, we'll be discussing the future of steel production and how Deeptech startups are paving the way for a more sustainable industry.
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If you're short on time, here's what you need to know:
🟡 Why steel?
Steel is the foundation of our buildings, vehicles, and industries, with its production and consumption rates often seen as indicators of a nation's development.
“As countries around the world seek to build and expand cities and infrastructure, they all have one voracious appetite: steel.”
- World Economic Forum
To give you an idea of the demand side, by 2026, the global steel industry is projected to reach a production level of 2.2 billion tonnes.
Here are two projections of demand in millions of tonnes over time.
However, steel products, particularly in buildings, machinery, and vehicles, often have a very long lifespan.
So, over 75% of all steel ever produced is still in use.
This means that today only about 1/3 of production can come from recycling, but with a growing trend.
Therefore, fresh steel must be produced in large quantities for a rapidly growing global market.
However, the production of steel is also a significant contributor to global carbon emissions, accounting for approximately 8% of all greenhouse gas emissions.
🟡 Problem
Producing more steel while emitting the least amount of CO2 possible.
🟡 Solution
Green Steel: steel produced without the use of fossil fuels.
🟡 Why now?
In recent years, there has been growing interest in the development of green steel, which is produced using renewable energy and has a much lower carbon footprint than traditional steel.
Green steel is seen as a key part of the transition to a more sustainable, low-carbon economy, and has the potential to significantly reduce carbon emissions from the steel industry.
Essentially, green steel is the manufacturing of steel without the use of fossil fuels.
Meanwhile, in the background, there is strong demand from corporate consumers who are willing to pay a premium for Green Steel, with a strongly growing market estimated to reach +6B by 2032 according to GlobalNewswire.
🟡 Deeptech startups into play
Startups in this space are raising increasing sums from venture capital investors.
For example, Swedish startup H2 Green Steel has received billions in debt financing from major public and private banks.
Boston Metal, based in the United States, raised a Series C in January with ArcelorMittal among its investors, one of the world's largest steel producers.
🟡 Barriers and Future Scenarios
Setting aside technological risks for a moment (after all, we're talking about deeptech), in the short to medium term, the innovations most likely to reach the market will leverage hydrogen as an alternative energy source.
Therefore, one of the biggest barriers to green steel production is the availability of low-carbon and low-cost hydrogen.
However, the production of green hydrogen is currently gaining momentum thanks to significant investments by governments and major energy producers, such as electricity companies.
The growing availability of green hydrogen could accelerate the production of green steel, ultimately leading to a more sustainable and low-carbon future for the steel industry.
To deeper navigate through the problem-solution space, startups, and market dynamics press the button below.
See you next week,
The Scenarionist Team
Disclaimer
Be aware: this is not investment advice! This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. DYOR - Do Your Own Research. The technologies and companies mentioned are not part of our investments, nor do they pay us for promotional purposes. References are listed in alphabetical order.
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