Stainless Steel?

The industry searches for new technology to radically reduce greenhouse gases

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Pierre Heckler/Le Republicain Lorrain/Photopqr/Newscom

ArcelorMittal plans to test a greener manufacturing process at its plant in Florange

At the ArcelorMittal steel plant in Florange, France, smokestacks infuse the air with gray plumes, making good show-and-tell for the steel industry's dubious distinction of being one of the world's leading greenhouse-gas emitters.

But the picture could one day be cleaner. ArcelorMittal and a group of European steelmakers have a $665 million plan to turn Florange into a model of environmentally friendly steelmaking that other steel companies would be free to deploy. If it works, the steel industry could slash carbon dioxide CO2 emissions 55%. That would make a sizable dent in the world's greenhouse-gas emissions, considering that the steel industry contributes 8% of those gases, according to the McKinsey consulting firm.

ArcelorMittal is part of a consortium of European steel companies called ULCOS, for Ultra-Low Carbon Dioxide Steelmaking. It is taking part in one of several schemes coordinated by the Brussels-based World Steel Association's CO2 Breakthrough Program to radically alter the way steel is made and potentially wipe out CO2 emissions. That's crucial now that the demand for steel is booming again, driven by a massive infrastructure buildup in China and the developing world. Last year the industry produced 1.6 billion tons of steel—China made 44% of that—beating 2007's record of 1.5 billion tons, according to World Steel. Likewise, China used nearly half of the total world steel production last year.

Why should a dirty old industry like steel care about going green? Because Big Steel sees greenhouse-gas reduction as a key to its longevity and profitability. For starters, it could save considerable money by switching to more efficient production that slashes its voracious power consumption. "If proven, these technologies will tend to be more energy-efficient, and that will reduce costs," says Ian Goldsmith, director of public affairs for Tata Steel Europe, which is part of ULCOS. Steelmakers also claim to want to do their part for the planet.

Environmentalists don't buy that. They say the industry is greenwashing—talking a clean game while moving slowly on greenhouse-gas initiatives. In Europe, Greenpeace and Friends of the Earth (FOE) accuse steelmakers of lobbying against the European Union's proposal to raise 2020 emissions-reduction targets to 30% of 1990 levels, from the current 20% target. And they say the E.U. should light a fire under Big Steel by cutting its free carbon credits in Europe's emissions-trading scheme, which allows manufacturers to pay for the right to emit CO2.

Either way, steelmakers' quest for "ultra-low" carbon faces one staggering conundrum: the industry depends on carbon—usually in the form of coke derived from coal—as a raw material for making new product. Blast furnaces use coke as a key part of the chemical process that reduces iron ore and converts it into liquid pig iron that steelmakers then convert to liquid steel before rolling it into finished steel. Steelmakers have honed this process for centuries—good news for anyone interested in strong, reliable steel but terrible for the environment.

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