*3.1. Techno-Economic Pathways Concept*

In this study, the concept of techno-economic pathways is used (Figure 1). The pathways are characterized as series of techno-economic investments connecting current steel industry configurations to a desirable low-carbon future [38]. The pathways reveal sectoral-level changes through technological characteristics.

**Figure 1.** Schematic overview of the techno-economic pathways concept used in this work.

The pathway analysis follows the following steps:


Three mitigation pathways (Pathways 1–3) as defined in Table 2 are investigated for the Swedish steel industry applying a selected combination of the CO2 abatement measures listed in Table 1. As a reference, we also compare these pathways to current steel process configuration, for which 65% of the steel production is based on the conventional primary steelmaking process using blast furnace and basic oxygen converter (BF/BOF) and 35% of the steel is produced in conventional electric arc furnaces (EAF). For Pathways 1 and 2 the total annual production of the Swedish steel industry is assumed to remain at 4.9 Mtonne (average steel production of Year 2017) between 2020 and 2045. For Pathway 3, an ore based metallic production growth is assumed, i.e., hot briquetted iron pellets produced via H-DR process. The export of HBI pellets is arbitrarily assumed to reach 6 Mt in 2045, which, since the iron content in HBI pellets is higher than in iron ore pellets, corresponds to approximately 50% of LKAB's

iron ore pellets export in 2017. Table 2 shows the combination of CO2 abatement measures assumed for primary and secondary steelmaking and production rate level in the investigated pathways. The share of primary steelmaking is assumed to decrease compared to the current level for all pathways due to replacement of one of the blast furnaces by EAF in 2025 [13]. However, for Pathways 2 and 3, from 2040 the share between primary and secondary steelmaking is assumed to be on the current level [26]. The configurations do not include processes of steel casting, hot rolling, cold rolling and coating due to their relatively less energy consumption and carbon emissions.

**Table 2.** Overview of the process configurations as well as production rate assumption for pathways investigates.


*3.2. Data*

The assessment of the energy consumption and CO2 emissions is based on the specific energy consumption and carbon dioxide emission intensity per ton steel, as outlined for the investigated process configurations in Table A1 in Appendix A. Emissions arise from the combustion of biomass are discarded from the emission estimates (i.e., assuming that the biomass is sustainable from a carbon accounting point of view). The Swedish climate goal to ge<sup>t</sup> 100% of renewable electricity by 2040 [2] and the current (2017) CO2 emission grid factor is already low, equaling 0.069 kgCO2/kWh [40]. The CO2 emission associated with electricity is assumed to fall linearly from 0.069 kgCO2/kWh in the current year to zero by the year 2040. (see Appendix A, Table A2). An economic analysis based on steel production cost is conducted for technologies used in the investigated pathways. The total steel production cost is determined as the sum of capital and variable operating costs, where variable operating cost includes the cost of reducing agent, fuel and other costs associated with running the steel process (see Appendix A, Table A3).
