KUALA LUMPUR, Oct 19 (Bernama) -- The steel industry is set to undergo a significant transformation as decarbonisation efforts accelerate, according to the latest Horizons report from Wood Mackenzie, the global insight business for renewables, energy and natural resources.
Titled Metalmorphosis: how decarbonisation is transforming the iron and steel industry, the report highlights the emergence of new metallic hubs and the reshaping of steel production and global trade patterns.
Wood Mackenzie's latest report says electric-arc furnace (EAF) technology, increased use of green feedstock, and evolving carbon policies will play a crucial role in this transformation.
According to a statement, low-carbon intensive EAF production accounts for 28 per cent of global steel output, projected to rise to 50 per cent by 2050, in which an investment of US$130 billion will be required to achieve this goal. (US$1=RM4.76)
Furthermore, the shift towards less carbon-intensive steel will drive the demand for greener feedstocks such as Direct Reduced Iron (DRI) and high-grade scrap.
Wood Mackenzie predicts that the share of these feedstocks in total metals demand will increase from 36 per cent to 54 per cent by 2050, leading to new production, processing and trading hubs for low-carbon iron and scrap.
As DRI production and trade rise will create investment and revenue generation opportunities across the value chain, Wood Mackenzie forecasts a doubling DRI capacity within 30 years, requiring an estimated US$80 billion investment.
Wood Mackenzie indicates that the location of new green DRI centres will be determined based on their proximity to low-carbon hydrogen production. This is particularly important given the uncertainties surrounding the transportation and storage of traded hydrogen.
Decarbonising the iron and steel industry, which currently accounts for approximately eight per cent of global carbon emissions, is a challenging but achievable goal.
With the right levels of investment and policy support, this transformation has the potential to redefine trade patterns and the value chain.
-- BERNAMA
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