If all the steel the world uses were made from recycled scrap, it would instantly reduce the world’s industrial carbon emissions by about 8%. That would be like India going net zero tomorrow. The technology to do this is more than 100 years old1 – so why don’t we?
The short answer is that there is nowhere near enough scrap. The World Steel Association (worldsteel) estimates that about one third of steel today is made from scrap, and two thirds directly from iron ore. More importantly, they also estimate that 85% of all available end-of-life scrap, worldwide, is already recovered and recycled. If those numbers are correct, then even if every last tonne of available scrap could be recovered and recycled it would only be enough to meet about 36% of today’s demand for steel2. The remaining 64% would still have to be made from iron ore.
But are those numbers correct?
Suppose, as some people have claimed, that only 50% of available end-of-life scrap is currently recovered and recycled, rather than 85%. If that were the case and if it is possible to increase that to 100%, then around 50%3 of today’s demand for steel could be met immediately, simply by improving scrap collection and recycling.
Whatever today’s end-of-life scrap recycling rate, a separate but extremely important question is what is happening to the scrap that is not immediately recovered? Is it building up in a massive end-of-life steel stockpile that is it still available for recycling, or is it permanently lost? If it is still available – just ‘hibernating’, in the jargon – then there should be enough unused scrap accumulated over the last few decades to meet most if not all of today’s needs, at least in the short term. All we have to do is find it, and recycle it.
If there’s a lot of scrap currently going to waste, then it is also trivially simple to define a technical specification for ‘low greenhouse gas (GHG) emission’ steel production to incentivise recovery and recycling – we can just use the carbon footprint. The easiest and fastest way to reduce the carbon footprint of steel will be to make it using more scrap. International trade regulations, government procurement and private sector steel consumption could favour such low carbon production. The value of scrap will increase, and collection and recycling would be expected to increase accordingly.
If most of the world’s demand for steel can be met from scrap in the next decade or two, then investment in new technologies for making steel from iron ore will be essentially wasted. There is no case to invest hundreds of billions of dollars – potentially, trillions – in developing and building new primary steelmaking capacity if those plants will be redundant in just 20 years. Even less so if the steel they produce will be more expensive than current, coal-based blast furnace production.
In short, if the real global recycling rate for scrap steel is closer to 50% than 85%, and can be readily increased, then there’s a real risk that hundreds of billions of dollars of private and public money is about to be wasted on a costly and misguided effort to produce low GHG emission steel from iron ore.
Conversely, if the real number is in fact close to 85%, and if that is already close to the maximum that can be realistically achieved, then public subsidies and policies favouring scrap-use are largely pointless. It would tell us that the economics of steelmaking already ensure that as much scrap as possible will be recovered and recycled, and that scrap use is limited almost entirely by availability, which will change over time without the need for any policy intervention.
So what is the correct number?
I’m going to try to answer that question in the following, bite-sized articles, which will be added to over time. No technical knowledge will be assumed, and wherever possible data will be supported by references to publicly available sources of information. First up, we need to get the terminology straight, starting with an apparently simple question, ‘What is Scrap?’. And then we’ll take it from there…
Footnotes
- Wikipedia: Electric arc furnace ↩︎
- Steel production = 1910 Mt. Assuming 5% yield loss this required 1910 x 100/95 metallics input, of which one third (33.3%) was scrap = 670 Mt scrap input, of which 50% (335 Mt) is assumed to be pre-consumer and 50% (335 Mt) end-of-life ((EOL), with an assumed 85% EOL steel recycling rate. If the EOL recycling rate increases to 100% then the quantity of EOL steel recovered goes up to 335/0.85 = 394 Mt. Total scrap recovery would then be 335 Mt (pre-consumer) + 394 Mt (EOL) = 729 Mt. That gives a recycled content, again assuming 5% yield loss, of 729/(1910 x (100/95)) = 36%. ↩︎
- If the EOL recycling rate increases from 50% to 100% then EOL steel recovered goes up to 335/0.50 = 670 Mt. Total scrap recovery would be 335 Mt (pre-consumer) + 670 Mt (EOL) = 1,005 Mt. That gives a recycled content, again assuming 5% yield loss, of 1005/(1910 x (100/95)) = 50% ↩︎