When the decarbonization target must be achieved according to the specified deadline, various efforts will also be made, including through a transition phase. The transition phase in the iron and steel industry is from low carbon production to neutral carbon production. There are a number of factors that influence towards this goal, especially the readiness of the market to buy iron and steel products produced from the production process and also the readiness of fuel and reducing agents for blast furnaces in the iron and steel industry. Charcoal is a fuel and reducing agent derived from biomass which has great potential for use in this transition phase. Charcoal as a carbonization or biomass pyrolysis product has a high calorific value, high fixed carbon and is stable.
Meanwhile, carbon neutral production conditions will be achieved when iron and steel production in the industry uses 100% renewable energy. The use of an electric furnace (EAF/Electric Arc Furnace) can be done as long as the electricity is produced from renewable energy sources. Likewise, the use of hydrogen fuel in blast furnaces (with electrical energy for plant operations also from renewable energy) is also able to achieve carbon neutral production conditions, and even the use of hydrogen fuel in blast furnaces is considered to be the ultimate goal in decarbonization of the iron and steel industry. With the target of achieving net zero emissions by 2050 and the average service life of blast furnaces being 20 years, the iron and steel industry's efforts to achieve the target must be well formulated and programmed. Even if efforts to replace blast furnaces do not follow this target time, it will put the achievement of net zero emissions by 2050 in jeopardy.
In fact, currently it is still far from achieving this goal because the construction of blast furnaces - basic oxygen furnaces (BF -BOF) is still being carried out, which should be EAF (Electric Arc Furnace) or currently only around 30% of the global iron and steel industry uses this EAF. Even the International Energy Association (IEA) highlighted this critical issue to achieve the Paris Agreement's net-zero target by 2050. CO2 intensity in this industry has only slightly decreased so that the use of renewable energy becomes increasingly important and accelerated.
A case example is the Japanese iron and steel industry. As a steel producer of more than 85 million tons per year with main use in domestic construction projects and automotive manufacturing and with more than 25% (more than 21 million tons) being exported, the Japanese steel industry has a significant influence on the global market. The dominant dependence on coal is the main problem of decarbonization and moreover, Japan is also the third largest coal importer in the world. Furthermore, decarbonization in Japan is considered inadequate because the Japanese steel industry lags behind other major world steel producers. Japan is a G7 country that does not implement a coal phaseout period.
Nippon Steel has even been labeled a climate laggard or slow to respond to the climate crisis in the Asian region. This is because the decarbonization strategy is inadequate or not in accordance with the IPCC's 1.5°C warming pathway or the IEA's net-zero pathways. This condition threatens national and global decarbonization targets and puts Japan's steel industry at risk. Meanwhile demand for low-carbon steel is increasing rapidly because steel industries and governments around the world are committed to reducing carbon emissions from fossil fuels. The Japanese steel industry needs to immediately decarbonize to remain competitive in the global market. Decarbonizing by investing in low-carbon steel production will address these risks and can position the Japanese steel industry as a leader in the green transition of the global steel industry.
Regarding the issue of fuel or renewable energy sources, biomass has a strategic position and role, namely in blast furnace operations, charcoal, which is a product of biomass carbonization, is used as a fuel and reducing agent, while in electricity production for iron and steel plant operations, biomass can be used as a renewable energy sources or biomass power plants. This is why the availability of biomass is very important so that the creation of energy plantations as a source of biomass is very necessary. Not only is the plantation a source of energy, it can also play a role in the production of food and feed, both of which are very beneficial for human life. And of course optimizing the use of the plantation by utilizing all parts of the tree (whole tree utilization) also provides maximum financial / economic benefits and with good management it will also provide benefits or improve the environment. And ideally by 2050 the steel industries will use electric arc furnaces / EAF, 100% hydrogen in blast furnaces and even a combination of carbon capture, to achieve net zero emissions in 2050 or even negative emissions so it is very good for the climate.
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