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17 December 2024
With a 100-year history making steel in Australia, Port Kembla Steelworks (PKSW), located in the Illawarra region of New South Wales, is an integrated iron and steelmaking operation using blast furnace-basic oxygen furnace (BF/BOF) technology.
According to worldsteel, approximately 70 per cent of all steel today is produced from BF/BOF technology. And in terms of efficient operation, worldsteel places PKSW in the ‘top 15% BF/BOF performers’ for the emission intensity of blast furnace-based operations. For BF/BOF steelmakers, the path to significantly lowering emissions further is a complex one, whereby the right enablers need to be in place to support the transformation for iron and steelmaking processes.
This case study gives a snapshot of the options being explored to reduce PKSW steelmaking GHG emissions intensity and footprint—and, as a result, to helping the Company make progress toward its goal to achieve net zero greenhouse gas emissions by 2050, a goal that is highly dependent on several enablers. For more information on our net zero goal and enablers, visit our Steelmaking page.
PKSW is a major part of BlueScope’s business in Australia, which employs around 7,000 people across approximately 100 sites, being a mix of manufacturing plants, roll-forming facilities and distribution centres across the country.
For decades, BlueScope’s PKSW has adapted to the needs of customers and the community, while constantly transforming as advances in technology have become viable for implementation. The Steelworks is seeking to deliver the next wave of customer growth, efficiency and productivity improvements through new technologies, robotics, automation, and digital resources.
A major supplier to a nation
In 2022, Port Kembla became the first site in the Asia Pacific region, and the fourth steelmaker in the world, to obtain certification from ResponsibleSteelTM, the global steel industry's first sustainability standard and certification program.
Certification, granted to the Steelworks and other BlueScope Illawarra sites, includes a rigorous audit of 12 sustainability principles covering environmental, social and governance issues, and ensures that steel manufactured at the Steelworks is produced and sourced responsibly.
A major focus for our climate action work is decarbonising steelmaking operations at our three major sites - each of which use different technologies and raw materials. The North Star mini mill in North America operates low emission electric arc furnace (EAF) steelmaking technology. The integrated steelworks in Glenbrook, New Zealand and PKSW, Australia use higher emission ironmaking and basic oxygen furnace (BOF) style steelmaking processes. Y
We are actively exploring options for longer term, large-scale decarbonisation, to realise our vision of lower emissions steelmaking. In developing our decarbonisation pathway, five key enablers are vital to success - technology evolution, raw materials supply, firmed affordable renewables, hydrogen and natural gas availability, and public policy. Our approach to decarbonisation for each of our three steelmaking sites will differ based on the local business context and unique set of operating environment challenges for each, balanced against the needs of and commitments made to stakeholders.
You can read more about steelmaking terms and technologies, and our net zero goal and enablers. on our Steelmaking page.
Did you know?
In 2018, BlueScope set a mid-term target to reduce emissions intensity across our steelmaking plants by 12 per cent by 2030. In FY2024, BlueScope reported a 12.0 per cent reduction in aggregated steelmaking emissions intensity against our FY2018 baseline (1.639 down to 1.443 tCO2e per tonne crude steel), which aligns with our 2030 target. This was primarily driven by the ramp-up of a third EAF at North Star, and operating and process efficiencies at PKSW and Glenbrook.
Looking ahead, the 2025/6 commissioning and ramp up of a new EAF in New Zealand, together with debottlenecking at North Star and general efficiency improvements across all steelmaking sites, will contribute to further lowering steelmaking emissions intensity. For more on PKSW's and BlueScope's emissions trends, see our Climate Action Report.
1 FY2024, the GHG emissions calculation approach for steelmaking was updated to align with recently updated National Greenhouse and Energy Reporting Scheme (NGERS) and worldsteel requirements for estimating carbon content in ferrous feed. This has resulted in an update to the baseline and each subsequent reporting period.
2 In FY2024 we made updates to historical data to correct previous overstatements of scope 2 emissions from FY2018, which included a restatement to our FY2018 target base year and 2030 target year emissions intensity.
The path towards significantly lowering our PKSW iron and steelmaking emissions is a complex one for Australia. Good progress has already been made through many process and operations improvements and energy efficiencies. While these are steps in the right direction, innovative iron and steelmaking processes will be required in order to achieve a major shift in reducing Scope 1 and Scope 2 steelmaking GHG emissions. According to common practice, we characterise steelmaking GHG emissions in accordance with the GHG Protocol: direct emissions from our operations are referred to as Scope 1; and indirect emissions from the energy we buy are referred to as Scope 2.
We have embarked on an Australian Direct Reduction Iron (DRI) Options Study, a comprehensive analysis of the options available to decarbonise iron and steelmaking processes at Port Kembla Steelworks, and the enablers required for each option.
We are also working with steelmaking partners thyssenkrupp Steel Europe, Tata Steel Europe and POSCO on developing low emissions technology pathways that may be suitable for the Steelworks.
This diagram outlines the work underway for the most prospective technology pathways being considered, along with projects underway to explore these opportunities.
In summary, to achieve its target emissions goals, the Steelworks has two technology options, both fed by a Direct Reduced Iron (DRI) ironmaking process, which relies on hot gases (natural gas or hydrogen), rather than a coal-based blast furnace for turning raw materials into iron.
DRI-ESF-BOF the best option
Based on comprehensive research, a DRI-ESF-BOF iron and steelmaking process is the best option for Port Kembla's Steelworks, as it would enable the ongoing use of Australian Pilbara ores. However the ESF technology has not yet evolved to the extent required. Developing this technology is the subject of BlueScope’s collaboration with Rio Tinto and BHP to develop Australia’s first pilot ESF.
Longer term, we need the technology, supported by action across other critical enablers which are vital to its success.
One option incorporates electric smelter furnace (ESF) technology. While it can use electricity instead of coal/coke as a fuel, an ESF is not an EAF. An ESF does the job to efficiently receive an expanded range of low and medium-grade quality iron ores from the DRI (more grades than before), with the ESF molten iron output suitable for further refining in either a BOF or EAF to produce liquid steel. ESF technology is used in ferro-alloy and non-ferrous industries however it is unproven for ironmaking at large scale and not tested on many traded iron ores, including Australia’s Pilbara iron ores.
One option involves using iron from a DRI ironmaking process to supplement scrap as feed to a new electric arc furnace, replacing the existing BF/BOF technology. The alternative of replacing the BF/BOF process using a predominantly scrap fed EAF (like North Star) could not be currently supported by the scrap volume produced by Australia's relatively small industrial base. Read our North Star case study and NZ EAF case study about the benefits and requirements of the EAF steelmaking approaches underway in our North America and New Zealand businesses.
BlueScope has entered an important collaboration with iron ore producers BHP and Rio Tinto to jointly investigate the potential to develop Australia’s first ironmaking ESF or ‘melter’ pilot plant.
The collaboration aims to demonstrate that it is feasible to produce molten iron from low grade Pilbara ores using renewable power when combined with DRI process technology. If successful, it could help open a potential pathway for steelmakers to realise near-zero GHG emissions intensity operations.
To unlock the enablers that underpin the DRI-ESF technology, which include effective partnerships and policy, BlueScope is taking action to address the following significant challenges:
Most DRI manufactured today requires natural gas or coal. DRI-ESF-BOF iron and steelmaking will require up to 40 times the amount of natural gas consumed at PKSW today. There are significant barriers to obtain these volumes at a competitive price due to strong export demand and lack of Australian domestic supply. 1
There is insufficient transmission and electricity capacity in the Illawarra region of Australia to support the transition to lower emissions steelmaking. Accordingly, investments to upgrade transmission networks and the availability of competitively priced firmed electricity are priorities for lower emissions steelmaking.
The electricity required to transition to a natural gas or hydrogen DRI pathway is 2 times (for natural gas) and up to 15 times (for hydrogen) the electricity consumption at Port Kembla today.1.
Effective policies are essential to support appropriate cost-competitive firmed renewable electricity, sufficient quantities of cost competitive gas, and developing a green hydrogen supply chain.
1 Based on BlueScope analysis
Alongside this work, BlueScope’s teams continue to explore emerging technologies which may form part of the decarbonisation pathway, for example: biochar, hydrogen, Carbon Capture & Storage, and electrolysis.
While we pursue our extensive work on all critical enablers to a net zero transition, the PKSW team is progressing plans to continually improve PKSW's current steelmaking process until technology evolves sufficiently for alternative ironmaking and steelmaking processes to be viable.
An important element of bridging the gap is relining the Steelworks' currently out-of-service (No.6) Blast Furnace, and returning it to service to replace No.5 Blast Furnace which is approaching its end of life. With No.6 Blast Furnace in service, this will provide us time to develop, pilot and operationalise future technologies, and encourage the development of the required enablers needed for a low emissions future at the Steelworks.
Like the last 100 years, steelmaking at Port Kembla continues to constantly evolve to meet customer and community expectations. With a diverse set of programs underway to unlock low emissions steelmaking, the future of manufacturing steel in Australia remains strong.
More information
Our Sustainability Report Suite provides transparent and meaningful disclosure about our sustainability performance across a range of topics.
Download BlueScope’s second Climate Action report.
View our case studies that demonstrate our strength in steel.
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