Economic potential for substitution of fossil fuels with liquefied biomethane in Swedish iron and steel industry – Synergy and competition with other sectors

• In Sweden, the iron and steel industry (ISI) is a major source of greenhouse gas (GHG) emissions. Most of the emissions result from the use of fossil reducing agents. Nevertheless, the use of fossil fuels for other purposes must also be eliminated in order to reach the Swedish emissions reduction targets. In this study, we investigate the possibility to replace fossil gaseous and liquid fuels used for heating in the ISI, with liquefied biomethane (LBG) produced through gasification of forest residues. We hypothesize that such utilization of fuels in the Swedish ISI is insufficient to independently drive the development of large-scale LBG production, and that other sectors demanding LBG, e.g., for transportation, can be expected to influence the economic potential for the ISI to switch to LBG. The paper investigates how demand for LBG from other sectors can contribute to, or prevent, a phase-out of fossil fuels used for heating purposes in the ISI under different future energy market scenarios, with additional analysis of the impact of a CO2 emissions charge. A geographically explicit cost-minimizing biofuel production localization model is combined with heat integration and energy market scenario analysis. The results show that from a set of possible future energy market scenarios, none yielded more than a 9% replacement of fossil fuels used for heating purposes in the ISI, and only when there was also a demand for LBG from other sectors. The scenarios corresponding to a more ambitious GHG mitigation policy did not achieve higher adoption of LBG, due to corresponding higher biomass prices. A CO2 charge exceeding 200 EUR/tonCO2 would be required to achieve a full phase-out of fossil fuels used for heating purposes in the ISI. We conclude that with the current policy situation, substitution of fossil fuels by LBG will not be economically feasible for the Swedish ISI.

Ämnesord

TEKNIK OCH TEKNOLOGIER  -- Maskinteknik -- Energiteknik (hsv//swe)

ENGINEERING AND TECHNOLOGY  -- Mechanical Engineering -- Energy Engineering (hsv//eng)

TEKNIK OCH TEKNOLOGIER  -- Naturresursteknik -- Annan naturresursteknik (hsv//swe)

ENGINEERING AND TECHNOLOGY  -- Environmental Engineering -- Other Environmental Engineering (hsv//eng)

TEKNIK OCH TEKNOLOGIER  -- Industriell bioteknik -- Bioenergi (hsv//swe)

ENGINEERING AND TECHNOLOGY  -- Industrial Biotechnology -- Bioenergy (hsv//eng)

TEKNIK OCH TEKNOLOGIER  -- Naturresursteknik -- Energisystem (hsv//swe)

ENGINEERING AND TECHNOLOGY  -- Environmental Engineering -- Energy Systems (hsv//eng)

Nyckelord

Biomass gasification

Biomethane

Energy market scenarios

Iron and steel industry

Process integration

Supply chain optimization

Carbon dioxide

Competition

Emission control

Fossil fuels

Gas emissions

Gasification

Greenhouse gases

Heating

Power markets

Reducing agents

Steelmaking

Supply chains

Energiteknik

Publikations- och innehållstyp

ref (ämneskategori)

art (ämneskategori)