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He says that finding the right solution quickly to the challenge of producing iron and steel in a more sustainable way is vital, given how abundantly such metals are used and because manufacturing plants are likely to last for decades.

In the steel industry, dominantly, iron is first produced by smelting iron ore at very high temperatures in a blast furnace powered by fossil fuels — specifically coke (a form of carbon made from coal).

Then, steel is made through a secondary process that takes the molten iron and removes impurities in a basic oxygen furnace or electric arc furnace.

“Steel underpins almost all the structures and machines that we use every day, and demand for these metals is expected to persist well into the future,” Prof. Shen, a Fellow of the Australian Academy of Technological Sciences and Engineering, says.

“An iron-and-steel-making plant lasts for decades, so when you build one you are actually locking in the level of greenhouse gas emissions for many years into the future.

“So that is why it is so important to find viable solutions to the problem as fast as we possibly can, to produce greener versions of quality iron and steel that also maintain the levels of supply needed for the global market. That’s the only practical pathway for change.

“These green metals have the same properties as ‘normal’ iron and steel. That is, they are just as strong, just as durable and look the same,” adds Prof. Shen.

“So car manufacturers, builders and engineers can use these in exactly the same way with no compromise in safety or performance.”

Here, Prof. Shen helps explain the various options to transform the iron and steel-making industry and what challenges still need to be overcome, in terms of decarbonisation potential and, more importantly, production cost.

The size of the problem

Iron and steel production is responsible for around 7-9% of global CO₂ emissions.

That’s more than any other industrial sector, including aviation (approx. 2.5%) and shipping (approx. 2.3%), and even mining (4-7%).

And as populations grow and urbanisation accelerates, the global demand for steel and iron shows no sign of slowing. This makes the need for greener production of these metals so important.

'Green iron' and 'green steel' are general terms used to describe those that are produced using significantly less fossil fuels, and in some cases, even none at all.

The pathways to green iron and steel

There are several main pathways being explored and developed for producing green iron and steel, each with its own characteristics, advantages, and challenges.

Hydrogen-based direct reduced iron

One promising route for dramatic emissions cuts is hydrogen-based direct reduced iron (H-DRI) paired with an electric arc furnace (EAF).

In this process, the iron ore reacts with green hydrogen to yield pure iron, almost entirely eliminating carbon dioxide emissions. The iron is then converted into steel in an electric arc furnace powered by renewable electricity.

While this approach promises emissions reductions of 80-90%, it currently depends on a steady and affordable supply of all high-grade iron ore, green hydrogen and renewable energy — resources that face significant cost and extreme supply constraints in most regions.

Waste-steel recycling

Another approach is simply to melt and recycle scrap steel in electric arc furnaces.

This technique, when powered by green electricity, bypasses the need for iron ore reduction and therefore can reduce emissions to nearly zero. It is also one of the most mature and widely available “green steel” methods today.

However, its scalability is limited by the availability and quality of steel scrap. Fast-growing economies often need more “new steel” than recycled material can provide, especially for major infrastructure projects.

This process can also be done with polymers injected. This , by leveraging high temperature reactions in electric arc furnace steelmaking.

However, substantial investment is required in new infrastructure and adaptations to existing steel plants.

Iron ore electrolysis

A frontier technology is the electrolysis of iron ore, in which renewable electricity splits iron ore directly into iron and oxygen, removing the need for carbon-based fuels altogether.

If powered by clean energy sources, this could allow for truly zero-emission ironmaking, although efficiency and commercial-scale feasibility are still in the early-stage experimental phase.

Blast furnaces reinvention by Renewable Injectant and Sustainable Burden technologies

Most steelmakers propose upgrading existing blast furnaces with renewable injectant and sustainable burden (RISB^TM) technologies, combined with carbon capture, utilisation and storage.

This process,  by Prof. Shen, substitutes part of the coal input with renewable feedstocks and also traps some of the resulting carbon dioxide that would still be emitted (but much less), for storage or industrial use.

The RISB^TM technology has proved its effectiveness in industry practice in helping decarbonise existing sites without a full rebuild.

Although some residual emissions will still occur, this process is a viable solution for substantial decarbonisation of existing large-scale plants, with the lowest cost and highest feasibility.

Prof. Shen's team is working with the global leaders across the entire supply chain including steelmakers (Baowu, BlueScope), iron ore producers (Rio Tinto), and fuel producers (BHP), as well as many SMEs.

The benefit to society

Producing iron and steel with vastly lower emissions can obviously make a significant impact in terms of fighting against climate change.

In addition, switching from coal-dominated processes to clean energy slashes industrial pollution. This results in cleaner air and water, reducing rates of respiratory illness and improving community health — particularly for those living near factories and industrial ports.

Economically, the move toward green iron and steel promises to unlock new industry, exports, and skills.

Regions rich in renewable energy resources, like outback Australia, can support renewable fuels production and supply chain hubs, generating high-value manufacturing jobs.

Investment in green steel enables these regions to diversify beyond raw mineral exports and capture more value through advanced manufacturing. In doing so, economies grow not just from more jobs, but from building expertise and intellectual property in clean industrial technologies.

Overcoming the challenges

Despite the promise, several challenges must be overcome for green iron and steel to become the global norm.

Many new technologies remain at the pilot or demonstration stage, and scaling up to meet the enormous global appetite for steel presents a huge technical and logistical challenge.

The cost of a reliable supply of green hydrogen and renewable electricity is still higher than conventional energy, making green steel as much as 20-50% more expensive than its traditional counterpart for now.

The supply of scrap metal, a key feedstock for the cleanest and cheapest green steel process, is also limited — especially in fast-developing regions.

“We know that steelmaking is the world’s biggest industrial CO₂ polluter. Producing just this one metal alone causes up to 9% of global emissions," says Prof. Shen.

“Most of the pollution from making steel comes just from ironmaking, the step of turning iron ore into iron, mostly in blast furnaces that burn coal.

“If we want truly green metals, fixing this ironmaking step, which is coal-based, is the main challenge, rather than mining and mineral processing, which are largely electricity-based.

“The best way to develop new technologies for heavy industries is to use a step-by-step R&D method that starts with safe and low-cost computer simulations to test and refine ideas, followed by lab experiments to confirm the results, and finally large-scale plant tests to show the technology works in practice," he adds. 

“We call this approach NLP, meaning we do numerical experiments, lab experiments, and then plant tests. This is much more efficient than the old trial-and-error method, which is expensive and often misses the best designs.

“To make it work, accurate and fast computer models are needed to simulate how materials and reactions behave in the first stage and throughout the process.

“All of this is why researchers and industry are trying to find new, feasible and cleaner ways for ironmaking – to cut out coal, which is the key to a net zero future of green steel."