**1. Introduction**

In Sweden, the industrial sector is responsible for over a third of the total energy demand. In 2017, the iron and steel industry was the largest industrial consumer of fossil fuels (natural gas, oil, coal and coke) and the resulting CO2 emissions corresponded to 38% of the total industrial CO2 emissions in Sweden [1]. In line with the global effort of keeping the temperature increase to well below 2 ◦C, Sweden introduced a nationwide climate policy framework which entered into force in 2018. Through this new framework, Sweden has formally committed to net zero greenhouse gas emissions by 2045 compared to the level in 1990, translating into at least 85% reduction in emissions with the remaining emission reduction to be taken by bio-carbon capture and storage (CCS), land-use change and measures in other countries. After 2045 Sweden is to achieve net negative emissions [2]. The Swedish steel-producing sector is facing the challenge of changing current energy carriers and implementing low carbon technologies to meet these targets.

To reach substantial cuts in emissions from the energy-intensive industries has proven to be challenging [3]. Bataille et al. [4] categorize the general decarbonization options for the energy-intensive industries by a decision-tree with three main branches, (i) dematerialization or recycle/reuse, (ii) substantial changes of existing processes, (iii) maintaining existing processes with CCS or using an alternative heat source. Johansson et al. [5] investigate measures for the Swedish steel industry that enable becoming climate neutral and conclude that in order to reach deep emissions cuts, efficient energy use must be combined with alternative technologies such as fuel replacement and CCS. Wang et al. [6] investigate the deployment of biomass in the Swedish integrated steel plants applying an energy and mass balance model. The findings by Wang et al. show that using biomass to replace coal in one single blast furnace (the blast furnace located in Luleå), would decrease the CO2 emissions of the entire Swedish steel industry by 17.3%. Yet, this would require 6.19 TWh of biomass, which correspond to about 4% of current (2017) annual biomass harvests from the Swedish forest industry, while there are several sectors that will compete over the biomass resource. Furthermore, Mandova et al. [7] use a techno-economic model to estimate the carbon dioxide emissions mitigation potential of bio-CCS in primary steelmaking across the European Union (EU). They demonstrate that up to 20% of the EU CO2 emission reduction target can be met entirely by biomass deployment, and up to 50% by bio-CCS. Lechtenbohmer et al. [8] investigate electrification of the energy-intensive basic materials industry in the EU by means of an explorative method and conclude that electrification of the production of basic materials is technically feasible, yet, can have major implications on the interaction between the industries and the electric systems.

Fischedick et al. [9] have developed a techno-economic model to assess the potential of alternative processes for primary steel production, e.g., blast furnace with CCS (BF/CCS), hydrogen direct reduction, and direct electrolysis of iron ore. The study is made for Germany and the model is run for scenarios up to the year 2100. According to the study, the 80% emission reduction target defined by European Commission (EC) for the iron and steel industry can only be met with early implementation of alternative technologies such as hydrogen direct reduction and iron ore electrolysis, together with a strong climate policy and additional material efficiency measures.

The findings by Fischedick et al. [9] are confirmed by Arens et al. [10] who analyze four future pathways to a low-carbon steel production industry in Germany up to 2035 with emphasis put on estimating technical options, specific energy consumption and CO2 emissions in the German steel industry. Even though Arens et al. [10] have a different time perspective than Fischedick et al. [9] they conclude that, in order to reduce carbon dioxide emissions from steel production to near zero, alternative steelmaking processes (hydrogen direct reduction, steel electrolysis) need to be developed while CO2 reduction in short-term (heat recovery, scrap usage and the use of by-products to produce base chemicals) also need to be realized. Although the above works give important knowledge on the available options for abatement of carbon emissions from steel production, there is a lack of studies which shows how a transition from today's steel industry to a near zero-emitting steel industry could be allocated in time.

Therefore, using Sweden as an example, this study aims to further investigate the potential development of the iron and steel industry to become carbon neutral (by 2045, as it is the Swedish target year for carbon neutrality) with respect to the dynamics of the transition, i.e., which technology options to use and when it is reasonable to assume these can be implemented in the form of decarbonization pathways. We consider recent developments in the Swedish iron and steel industry as well as a general literature review on emission reductions options in the iron and steel industry. In addition, barriers and risks associated with developed pathways are put forward and discussed.

The outline of the paper is as follows: Section 2 gives an overview of the Swedish steel industry. Section 3 presents the method and assumptions. Section 4 presents the results. The paper ends with discussion and conclusions in Sections 5 and 6.

#### **2. CO2 Abatement in the Steel Industry**

Sweden is one of the EU's leading producers of ores and metals; ore extraction is about 48 Mton annually of which 83% is refined into iron ore pellets. Furthermore, 77% of the iron ore extractions are exported, which correspond to about 17 Mton [11]. In Sweden, two different steel production

technologies are currently applied: the ore-based steelmaking process using blast furnaces/basic oxygen furnaces (BF/BOF), and the scrap-based steel production applying electric arc furnaces (EAF) [12]. These processes have a di fferent structure of the main inputs and energy intensity. The average annual production of crude steel in 2017 was around 4.9 Mt. Two-thirds of the steel production stems from the BF/BOF technology, which currently takes place in two locations (Luleå and Oxelösund) by one single company (SSAB, Stockholm, Sweden). SSAB is accountable for more than 90% of the CO2 emissions from Swedish steel production, and about 80% of these emissions originate from iron ore reduction. Within the BF/BOF process, iron ore is reduced to pig iron using reducing agents in a blast furnace. Furthermore, in a basic oxygen furnace (BOF) pig iron together with ferrous scrap is processed and transformed into crude steel. As a first step toward carbon-neutral steel production, SSAB has decided to replace the blast furnace in Oxelösund with an electric arc furnace by 2025 [13], when the current blast furnace is scheduled to be retired due to age. EAF requires ferrous scrap and electricity as major inputs. Oxygen and natural gas are used to generate complementary chemical heat for the melting. Based on the configuration of the EAF plant, the availability of scrap and the desired quality of the end product, this process may require some quantities of pig iron from the BF or, optionally, direct reduced iron (DRI). Secondary steelmaking with EAF results in producing lower steel quality compare to virgin steel since scrap steel retains contaminants, such as copper. Steel produced in an EAF tends to be of lower quality than virgin steel because it retains whatever contaminants that were present in the scrap steel, such as copper. Although the EAF is less energy- and CO2-intensive, high-quality virgin steel demand will remain.

The specific technological decarbonization options for the steel industry are found in Table 1, including information on CO2 intensity, costs and technology readiness level (TRL) [14].


**Table 1.** Specifications of current commercially available and new transformative low CO2 production processes for steel production in greenfield production facilities.

> 1 Capture emission points: BF, TGRBF.

To assess the techno-economic potential of the CO2 emissions reduction in the steel industry the following CO2 emission reduction measures were selected and investigated: top gas recycling blast furnace (TGRBF); carbon capture and storage (CCS); substitution of pulverized coal injection (PCI) with biomass; steelmaking process with hydrogen direct reduction of iron ore (H-DR) and an electric arc furnace (EAF); and a secondary steel production route with EAF, where fossil fuels

are replaced with biomass. Furthermore, the abatement measures are combined in three pathways to investigate the potential development implementation of these technologies over time towards zero-emission steelmaking.

The top gas recycling blast furnace concept relies on both removing the CO2 from the top gas and reinjection of the remaining gas to the blast furnace. This technology enables a decrease in carbon dioxide emissions from the blast furnace since the demand for coke reduces and an opportunity of CO2 storage. The TGRBF could be modified to an existing blast furnace [32].

As long as the blast furnace process uses coke and coal as fuels, CO2 emissions are unavoidable, but they could be reduced by means of biomass-derived fuels and reductants applications. The following potential biomass applications can be specified: replacement of fossil fuels in sintering or pelletizing; substitute for coke as a reducing agen<sup>t</sup> and fuel in the blast furnace; substitute for pulverized coal injected (PCI) as a fuel in the blast furnace; substitute for coal-based char utilized for recarburizing the steel; and reduction of pre-reduced feeds [33]. The biomass substitution rate varies between applications. Since the replacement of PCI with biomass is the most feasible application [34], this option is investigated in the present study.

However, in order to achieve deep CO2 emission cuts down to zero or beyond zero, the steel industry must either capture the CO2 emissions or shift to another means of iron reduction (hydrogen direct reduction, steel electrolysis). The deployment of CCS in a steel plant is in this work considers the integration of post-combustion capture, which can reduce carbon dioxide emissions from existing plants without major modifications. According to Eurofer [15] a full-scale deployment of the TGR and CCS technologies is assumed possible after 2020. The potential for CO2 reduction is around 5–10% from TGR alone, 50–60% with TGR technology combined with carbon storage (TGRBF + CCS), and over 80% with TGR with biomass-based BF and carbon storage (TGRBF charcoal + CCS) [35,36].

Currently, the main focus for CO2 mitigation of the steel industry in Sweden is to develop the hydrogen direct reduction of iron ore. In the present study, we assume hydrogen replaces coke as the main reductant in the reduction process and hydrogen is produced via electrolysis. Iron ore is converted into direct reduced iron (DRI) during the H-DR process and further compressed to hot briquetted iron (HBI), since HBI is less reactive than DRI and allows the problems associated with shipping and handling to be overcome. The principal market for HBI pellets is the electric arc furnace (EAF), but HBI also finds use as a feedstock in basic oxygen furnace (BOF). HBI pellets produced by the hydrogen direct reduction (H-DR) steelmaking process could decrease CO2 emissions from ironmaking by 90% compared with iron production in a blast furnace, and by 80% compared with a direct reduction of iron using natural gas, as a reducing agent. The hydrogen direct reduction steelmaking process is expected to be feasible from 2040 [37]. The alternative secondary steel-making process is based on the conventional EAF, however, the chemical energy and carbon required to complement the electrical energy is taken from biomass.
