Steel

Steel production is one of the highest-emitting industry sectors, responsible for approximately 7% of global carbon dioxide emissions. There is a clear global interest – both environmental and geopolitical – in increasing recycled steel outputs.

Steel recycling feedstocks

The IEA estimates that the direct emissions and carbon intensity of steel production must reduce 90% by 2050 in order to limit global warming to 1.5°C. Compared to ore-based steel manufacturing, steel created using recycled scrap has approximately 78% less carbon emissions per tonne. The expansion of steel recycling operations is therefore of vital importance to global decarbonisation efforts. At the same time, trade tensions and the centrality of steel to numerous sectors of the modern economy are also driving policymakers, industry, and consumers alike to seek out secondary steel alternatives.

Steel is an attractive option for circular economy initiatives owing to its abundance, infinite reusability through smelting cycles, and straightforward material recovery process. The recycling input rate (RIR) for steel was 30% globally in 2022. This figure has remained relatively stable, fluctuating between 30–36% over the past decade. However, there remains a significant disparity between post-consumer steel recycling rates and RIR because demand consistently surpasses the annual amount of scrap generated (approximately 630–650Mt) from end-of-life steel produced historically.

There are two main methods to produce steel: Basic Oxygen Furnaces (BOF) and Electric Arc Furnaces (EAF). EAF is the preferred method for recycled or secondary steel production as it consumes less energy, has a lower emissions output, and can use 100% scrap steel as feedstock – with a typical charge exceeding 80% scrap content. In BOF, scrap steel is mainly inputted as a coolant or supplement to primary raw materials, chiefly coal, and can only be added at a rate of up to 25% per charge.

Scrap steel feedstock is typically sourced from three main groups, with distinct price points and qualities. Pre-consumer scrap is made up of residual leftovers generated in steel mills during primary production processes, and ‘industrial’ scrap, similarly, is produced during downstream manufacturing, including trimmings, and defective or surplus products. ‘Obsolete’ or post-consumer scrap, on the other hand, consists of end-of-life consumer products and appliances. Post-consumer steel scrap can be collected from sources ranging from small household consumables to large-volume items like construction materials, industrial equipment, or vehicles.