The old industrial economy has come out from behind the desk to meet its counterpart in the New Energy Economy. Case in point: Nucor
NUE
Corp.’s $2.7 billion investment in West Virginia. The steel mill will be completed by 2024 and will rely heavily on green energy to power its facility.
Steel is the cornerstone of the green economy. It goes into everything from wind turbines to solar farms to electric vehicles. But steel making is a carbon-intensive pursuit, and the industry is trying to reduce its CO2 emissions. The measures include using recycled scrap and renewable energy to power the plants — either generated for the sites or purchased through long-term contracts. But the most significant move would be to use clean hydrogen — and less coal — to make steel.
“The green economy is being built on steel, and Nucor is proving that it can be produced in a sustainable way that can help the world meet its climate goals,” says Leon Topalian, chief executive of Nucor. “For more than 50 years, Nucor has been built on a sustainable model of recycling steel to produce new steel and steel products … Our new sheet mill in (West Virginia) will have unmatched capabilities that will enable the continued expansion of high-quality, low carbon steel …”
The West Virginia plant, which will initially employ 800 people, will be among its cleanest. It will serve markets in the Midwest and Northeast, two of the largest steel-consuming regions in the country. Nucor says that its carbon intensity is less than one-third of today’s world steelmaking average. The Charlotte, N.C.-based company says that it is committed to cutting its CO2 levels by 35% by 2030 from a 2015 baseline. Beyond that, it plans on being a net-zero manufacturer.
Almost all steel is produced using iron oxide and metallurgical coal that is put in blast furnaces set at 1100 degrees Celsius to remove water and other chemicals. It produces a pure-carbon source called coke that is ultimately used to make steel. The steel sector is responsible for as much as 7% of the globe’s greenhouse gas emissions. However, a lot of time and money is going into making that steel using hydrogen — not ‘met coal.’ West Virginia is in the bidding to become a “hydrogen-hub” that would get about $8 billion from the 2021 infrastructure law.
As for Nucor, its mission is to cut the carbon intensity at its plants, necessitating that it use more renewable energy. To that end, American Electric
AEP
Power and Wheeling Power are building green plants to serve Nucor. “Having renewable energy in the mix was a key factor in Nucor Corporation’s recent decision to locate its $2.7 billion steel mill in the state,” Chris Beam, president of AEP’s subsidiary, Appalachian Power said. The utility says that clean power plants will attract other eco-aware corporations.
Nucor previously launched a line of net-zero carbon steel products that it branded Econiq. By doing so, it is telling its customers that they are part of a low-carbon supply chain. The target audience: the automotive, construction, and renewable industries. General Motors
GM
is its first corporate customer to buy such steel.
Green Hydrogen Heats Up
ArcelorMittal is another steel company with high sustainability goals. It aims to reduce its carbon intensity by 25% by 2030 and be net-zero by 2050. Its “XCarb” initiative seeks to reduce carbon emissions from the blast furnaces used to produce industrial metals and steel. Further, ArcelorMittal just bought a recycling company called John Lawrie Metals, which has access to scrap steel from oil and gas operations located in the North Sea.
But the most significant step the company can take is to increase the proportion of hydrogen it feeds into furnaces. It is developing a project at its site in Hamburg, Germany, that would run on hydrogen and produce 100,000 tons of steel.
“However, where insufficient levels of renewable energy are available,” the steelmaker says, “the industry will need to use ‘blue’ hydrogen, derived directly from fossil fuels or industrial gases and combined with carbon capture and storage to ensure carbon neutrality.”
Today, natural gas reforming is used to make 95% of all hydrogen. The goal, though, is to create it from renewables using water electrolysis that splits the hydrogen and oxygen. So-called green hydrogen produces no pollution. The International Energy Agency says that the cost of green hydrogen could fall 30% by 2030.
Siemens, which is building an electrolyzer facility in Germany, has said that getting green hydrogen to scale will take time. Meantime, the Fortescue Metals Group wants to make 15 million tons of green hydrogen per year by 2030 before expanding that to 50 million tons per year.
“That future is right upon us,” says Andrew Forrest, chief executive of Fortescue, at a web event. “Developing countries want to see this happen. They do not want to be hogtied by oil and gas companies. Think you will put carbon back into the ground? This is the perennial lie. There’s only one solution: clean hydrogen, which produces no carbon.” ‘Blue hydrogen’ produced from natural gas “just kicks the can down the road …
“Can we please stop stressing about going green,” Forrest continues. “To all the West Virginia coal workers and all the coal workers across North America: The (green economy) needs your skills. It can pay you better. It can give you long-term security. If you don’t change, your jobs are on the line — no matter what subsidies get thrown at them. Your jobs cannot be replaced if you have a customer.”
ArcelorMittal says that if the industrial revolution had not touched off steel making, the sustainability era would have done so — the need to recycle the product and use more green energy to make it. Indeed, this is the point where the old and new economies cross paths and where they can find common ground. Nucor’s investment in West Virginia typifies that message — a venture giving coal country new life.
.
