The prospects for carbon capture and storage (CCUS) in the steel industry are looking increasingly bleak, according to a recent report. Major steelmakers and miners are still touting it as a solution to reducing greenhouse gas emissions, but the reality is that few projects are likely to become operational due to financial, technological, and environmental risks. Even the world’s only operational commercial-scale CCUS plant for steelmaking in the UAE only captured 26.6% of emissions in 2023.
Furthermore, recent setbacks, such as the cancellation of a multi-billion dollar CCUS project in Canada and faulty monitoring equipment at a flagship project in Norway, are casting doubt on the feasibility of CCUS at scale. The high cost of CCUS remains a major obstacle, especially for coal-based blast furnace steel plants that require multiple points of carbon capture.
Instead, steelmakers are turning to direct reduce iron (DRI) steelmaking, a mature technology that can run on green hydrogen. The 2030 project pipeline capacity for DRI plants has reached 96 million tonnes a year, far surpassing the limited capacity of CCUS for blast furnace-based operations. The cost of green hydrogen, though high now, is expected to decline with economies of scale and renewables cost reduction, making it a more attractive option for low-carbon steel production.
Steelmakers are moving away from CCUS towards more cost-effective and efficient alternatives, signaling a shift in the industry towards technologies that can better reduce emissions while remaining financially viable.
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