Steelmaking, a process that has shaped industries worldwide, traditionally relies on iron ore and coal as primary raw materials. However, growing environmental concerns, fluctuating resource prices, and the need for energy efficiency have led the steel industry to explore alternative raw materials. By shifting to more sustainable inputs like recycled scrap, bio-based carbon, and hydrogen, steelmakers are reducing their carbon footprint, cutting costs, and driving innovation across the sector. This shift marks a pivotal transformation in steel production—one that promises to redefine its future for a greener, more resilient world.

Why Explore Alternative Raw Materials?

Steelmaking is one of the most energy-intensive industries, historically responsible for significant greenhouse gas emissions due to its reliance on coal in blast furnaces. As global emissions regulations tighten and consumers demand sustainable products, the industry faces increasing pressure to reduce its environmental impact. Alternative raw materials present a compelling solution. Not only do they reduce reliance on coal and iron ore, but they also promote recycling, energy efficiency, and the possibility of carbon-neutral production processes.

Key Alternative Raw Materials in Modern Steelmaking

Recycled Scrap Steel

Recycled steel has long been a key component in electric arc furnace (EAF) steelmaking, which is widely considered more environmentally friendly than traditional blast furnace methods. Steel is one of the most recyclable materials, and using scrap steel reduces the demand for virgin iron ore and coal, lowering CO₂ emissions by up to 90%. Increased use of scrap steel helps close the loop on material waste, creating a circular economy where old steel products are reused to create new ones, preserving resources and reducing waste.

Hydrogen as a Reducing Agent

Hydrogen has emerged as a revolutionary alternative to coal for reducing iron ore in steelmaking. Traditional steelmaking uses carbon as a reducing agent, which results in CO₂ emissions. In contrast, hydrogen reduction produces water vapor as a byproduct, effectively eliminating carbon emissions from the process. Known as hydrogen direct reduction, this technology has been successfully piloted in Europe, with companies like Sweden’s SSAB and Germany’s ThyssenKrupp leading the way. Although still in its early stages, hydrogen-based steelmaking could pave the way for zero-carbon steel production.

Bio-Based Carbon Sources

Bio-based carbon sources, such as charcoal from sustainably managed forests or agricultural biomass, are gaining traction as alternatives to fossil carbon. These materials act as reducing agents similar to coal but come from renewable sources, thereby contributing to a lower net carbon footprint. In countries like Brazil, where charcoal is sourced from eucalyptus plantations, bio-based carbon has become a viable replacement for coal in certain applications. When sourced responsibly, bio-based carbon offers a sustainable pathway for reducing greenhouse gas emissions in steel production.

Direct Reduced Iron (DRI) with Natural Gas

Direct Reduced Iron (DRI) technology uses natural gas as a reducing agent instead of coke, significantly reducing CO₂ emissions. This process, also known as gas-based DRI, produces “sponge iron,” which can be further processed in electric arc furnaces. DRI is especially relevant in regions where natural gas is abundant and cost-effective. While DRI still relies on fossil fuels, it generates fewer emissions compared to traditional coal-based processes and can serve as a transitional solution on the path to fully renewable alternatives like hydrogen.

Plastic Waste and Other Industrial Byproducts

In recent years, steelmakers have experimented with using plastic waste and other industrial byproducts as supplementary reducing agents. By repurposing waste materials, steel producers reduce reliance on virgin raw materials and divert waste from landfills. For example, some blast furnaces incorporate finely shredded plastic as a partial substitute for coke, which provides both an energy source and a means of recycling plastic waste. Although challenges remain in terms of emissions and scalability, the use of plastic waste represents an innovative approach to reducing the industry’s environmental footprint.

Benefits of Using Alternative Raw Materials in Steelmaking

Lower Carbon Emissions

The steel industry is responsible for about 7-9% of global CO₂ emissions, and adopting alternative raw materials can significantly reduce this impact. Replacing carbon-intensive coke and coal with hydrogen or bio-based carbon drastically cuts greenhouse gases, helping companies meet regulatory requirements and contribute to global climate goals. With hydrogen-based and bio-carbon steelmaking, the industry can achieve carbon-neutral production, setting a new standard for sustainable practices.

Enhanced Resource Efficiency

By utilizing recycled steel, plastic waste, and bio-based materials, the steel industry maximizes resource efficiency and reduces dependency on finite resources like iron ore and coal. This shift not only conserves raw materials but also fosters a circular economy where waste is minimized, and resources are reused, leading to more resilient supply chains and lower production costs.

Cost Savings and Risk Mitigation

Fluctuating costs and supply chain disruptions are persistent issues in the steel industry. Adopting alternative raw materials like recycled scrap or DRI reduces dependency on iron ore and coal, whose prices can be volatile. Additionally, using local or renewable sources for materials, such as natural gas for DRI or bio-based carbon, can help steelmakers mitigate risks associated with resource scarcity and political instability.

Alignment with Sustainability Goals

Today’s consumers and investors are increasingly drawn to companies that demonstrate a commitment to sustainability. By investing in alternative raw materials, steel manufacturers align themselves with environmental, social, and governance (ESG) goals, improving their reputation and attracting sustainable financing opportunities. A proactive approach to sustainability also gives steel companies a competitive edge as industries worldwide prioritize greener supply chains.

Challenges and Considerations in Adopting Alternative Materials

While alternative raw materials hold significant promise, their adoption presents certain challenges. Hydrogen-based steelmaking, for example, requires large amounts of renewable energy, which may not be feasible in all regions. Infrastructure for producing and transporting hydrogen is also in early stages, requiring substantial investment and government support.

Moreover, the use of bio-based carbon requires responsible sourcing practices to avoid deforestation and biodiversity loss, while relying on recycled steel depends on the availability and quality of scrap. Implementing these alternatives at scale will require significant capital, infrastructure upgrades, and careful resource management to ensure long-term sustainability.

The integration of alternative raw materials into steelmaking represents a groundbreaking shift toward a more sustainable and resilient future. By embracing innovative materials like hydrogen, bio-based carbon, and recycled scrap, the steel industry is not only reducing its carbon footprint but also enhancing efficiency, stabilizing costs, and aligning with global sustainability goals.