Steel built the Rust Belt. Green steel could help rebuild it.
In the Mon Valley of western Pennsylvania, steel was once a way of life, one synonymous with the image of rural, working-class Rust Belt communities. At its height in 1910, Pittsburgh alone produced 25 million tons of it, or 60 percent of the nation’s total. Bustling mills linger along the Monongahela River and around Pittsburgh, but employment has been steadily winding down for decades.
Though President Trump promised a return to the idealized vision of American steelmaking that Bruce Springsteen might sing about, the industry has changed since its initial slump four decades ago. Jobs declined 49 percent between 1990 and 2021, when increased efficiency saw the sector operating at its highest capacity in 14 years. Despite ongoing supply chain hiccups and inflation, demand continues growing globally, particularly in Asia. But even as demand for this essential material climbs, so too does the pressure to decarbonize its production.
Earlier this month, the progressive Ohio River Valley Institute released a study that found a carefully planned transition to “green” steel — manufactured using hydrogen generated with renewable energy — could be a climatic and economic boon. It argues that as countries work toward achieving net-zero emissions by 2050, a green steel boom in western Pennsylvania could help the U.S. meet that goal, make its steel industry competitive again, and employ a well-paid industrial workforce.
“A transition to fossil fuel-free steelmaking could grow total jobs supported by steelmaking in the region by 27 percent to 43 percent by 2031, forestalling projected job losses,” the study noted. “Regional jobs supported by traditional steelmaking are expected to fall by 30 percent in the same period.”
In a world struggling to keep global climate change below 1.5 degrees Celsius (2.7 degrees Fahrenheit), the traditional coke-based process of making steel, which uses coal to power the furnaces that melt iron ore, remains a big problem. The industry generates 7.2 percent of all carbon emissions worldwide, making it more polluting than the entire European Union. Old-school steel manufacturing relies on metallurgical coal — that is, high-quality, low-moisture coal, which still releases carbon, sulfur dioxide, and other pollutants. About 70 percent of today’s steel is made that way, much of it produced cheaply in countries with lax environmental regulations. However, only 30 percent of U.S. production uses this method.
Technological improvements and pressure to reduce emissions have led to increased use of leftover, or “scrap,” steel during production. When products made of traditional, coke-based steel have reached the end of their useful life, they can be returned to the furnace and recycled almost infinitely. This reduces the labor needed to produce the same amount and quality of steel as traditional production methods, and it accounts for about 70 percent of the nation’s output.
The scrap is melted in an electric arc furnace and uses hydrogen, rather than coke, to process iron ore. It requires less energy than traditional methods, particularly if renewable energy powers the furnace and generates the hydrogen. Nick Messenger, an economist who worked on the Institute’s study, believes this approach could revitalize the Rust Belt by placing the region at the forefront of an innovation the industry must inevitably embrace.
“What we actually show is that by doing that three-step process and doing it all close to home in Pennsylvania,” he said, “each step of that process has the potential to create jobs and support jobs in the community” — from building and operating solar panels and turbines, to operating electrolyzers to produce electricity, to making the steel itself.
The study claims a business-as-usual approach would follow current production and employment trends, leading to a 30 percent reduction in jobs by 2031. A transition to hydrogen-based electric arc manufacturing could increase jobs in both the steel and energy industries by as much as 43 percent. The study calls western Pennsylvania an ideal location for this transition, given its proximity to clean water, an experienced workforce, and 22,200 watts of wind and solar energy potential.
To make it work for the Mon Valley, the study notes, manufacturers must get started as soon as possible. The quest for green steel isn’t just an ideological matter, but a question of global economic power. “There’s a huge new race, in a sense, to get in on the ground floor,” Messenger said. “When you’re the first one, you attract the types of capital, you attract the types of businesses and entrepreneurs and industries that cause that kind of flourishing boom to happen around this particular sector.”
The Ohio Valley’s fabled steel mills may be looking, if cautiously, toward a decarbonized future. Two years ago, U.S. Steel canceled a $1.3 billion investment in the Mon Valley Works complex, citing, in part, its net-zero goals and the need to switch to electric arc steel production. Of course, the biggest challenge is that while the Mon Valley has massive wind energy potential, very little of it has been tapped. But thanks to the Inflation Reduction Act, federal subsidies and tax breaks could give clean energy developers a boost.
The Biden administration has shown faith in green steel through a series of grant programs, subsidies and tax credits, including $6 billion in the Inflation Reduction Act to decarbonize heavy industry. But Europe has the advantage. Nascent projects in Sweden, Germany, and Spain dot the European Union, with the United Kingdom close behind. Some are using hydrogen, but others are experimenting with biochar, electrolysis, or other ways to power the electric arc process.
In the United States, a company called Boston Metal is experimenting with an oxide electrolysis model, hoping to make the U.S. a leader in green steel technology. This model eliminates the need for coal by creating a chemical reaction that emulates the reaction that turns iron ore into steel. The company is in the process of licensing the process to steel manufacturers, and Adam Rauwerdink, the company’s senior vice president of business development, hopes to see its first adopter by 2026.
Rauwerdink believes the world is moving away from traditional steel manufacturing and that U.S. companies will be playing catch up if they don’t adapt. He has seen more and more companies and investors get on board in the past five years, including ArcelorMittal, the world’s second biggest steel producer. It invested $36 million in Boston Metal this year. He considers that investment a clear sign that the race for green steel is on, and it’s time for manufacturers to embrace the technology — or get left behind.
“Historically, you would have built a steel plant near a coal mine,” he said. “Now you’re going to be building it where you have clean power.”
This story was originally published by Grist with the headline Steel built the Rust Belt. Green steel could help rebuild it. on May 11, 2023.