Demand for "green" steel in the Asia-Pacific region may reach 6.1 million tons: RMI
According to a new report from the Rocky Mountain Institute (RMI) clean energy think tank, private sector demand for green steel in seven countries in the Asia—Pacific region could reach 6.1 million tons per year by 2030.
Of these, ore-based steel is estimated to account for 80% of demand, while scrap-based steel accounts for the remaining 20%. According to Kallanish's forecasts, the total demand for steel in the seven analyzed countries – Japan, South Korea, Vietnam, Indonesia, Malaysia, the Philippines and Thailand – will reach 241 million tons per year by the end of the decade.
If public procurement meets emissions targets for 2030, governments will be able to meet additional demand in the region for near-zero-emission steel in the amount of 11.5 million tons per year. However, according to RMI estimates, by 2030, only 2.5 million tons of environmentally friendly ore—based steel production will be commissioned in the Asia-Pacific region, excluding China.
"This gap creates opportunities for new environmentally friendly supply projects, some of which can be completed by importing environmentally friendly iron from economically competitive regions such as Australia, in addition to domestic production," the report notes.
Metallurgists throughout the region are exploring a range of decarbonization solutions. These include the injection of environmentally friendly hydrogen to reduce the use of coking coal in blast furnaces, or the replacement of coal with environmentally friendly hydrogen to produce DRI, which is then melted in an electric arc furnace.
The eco—friendly H2 DRI - EAF technology, combined with renewable energy sources, is currently the leading large-scale and commercially viable technology to eliminate almost all emissions from iron production, RMI notes. If all the analyzed countries replaced cast iron with environmentally friendly DRI based on H2, this would collectively reduce CO2 emissions by the equivalent of 211 million tons per year, which is 64% of the total steel emissions in these countries, the report says.
Despite the projected demand for environmentally friendly steel, a number of barriers affect buyers, including "supply chain difficulties, unclear product definitions and standards, and premiums for near-zero-emission steel products," RMI notes. It recommends demand aggregation mechanisms, as well as government actions and government incentives, which are "crucial for the expansion of the green market" in the region.
"A combination of supply and demand incentives combined with strict emission standards is necessary for large-scale