Fig. 3: Production costs and total costs for EU crude steel production under the phase-out of free allocation. | Nature Communications

Fig. 3: Production costs and total costs for EU crude steel production under the phase-out of free allocation.

From: Emerging green steel markets surrounding the EU emissions trading system and carbon border adjustment mechanism

Fig. 3

a–f The steel production routes shown are basic oxygen furnace-based steel (BOF), which uses pig iron produced in a blast furnace (BF) as input, and electric arc furnace-based steel (EAF), which uses either 100 % scrap or direct reduced iron (DRI) produced using green hydrogen (H2) or natural gas (NG) as a reducing agent. Lines depict total cost which is production cost and net EU Emissions Trading System (ETS) cost. Solid lines are total cost with an EU ETS price of €\(80\,{{{{\rm{t}}}}}_{{{{{\rm{CO}}}}}_{2}}^{-1}\) and dashed lines are total cost with an EU ETS price of €\(150\,{{{{\rm{t}}}}}_{{{{{\rm{CO}}}}}_{2}}^{-1}\). Shaded area is total cost of BF-BOF-produced steel with an EU ETS price ranging from €\(80 \! - \! 150\,{{{{\rm{t}}}}}_{{{{{\rm{CO}}}}}_{2}}^{-1}\). Grid fees are excluded from electricity and hydrogen prices. a–c, e, f A scrap charge of 12.5 % scrap was assumed for these production routes. a Capital expenditure for BF-BOF relining assumed to €\(64\,{{{{\rm{t}}}}}_{{{{\rm{CS}}}}}^{-1}\)78. b, c Three cases with electricity (El.) prices of €60, €80, and €100 MWh−1 for EU ETS prices of €80 and €\(150\,{{{{\rm{t}}}}}_{{{{{\rm{CO}}}}}_{2}}^{-1}\). Both scenarios have a 1.5 % carbon content embedded in the direct reduced iron (DRI) from natural gas at a price of €60 MWh−1. b Low-emission H2-DRI-EAF scenario with an emission factor of 64\({{\,{\rm{kg}}}}{{{\,{\rm{CO}}}}}_{2}\,{{{{\rm{t}}}}}_{{{{\rm{CS}}}}}^{-1}\). c High-emission H2-DRI-EAF scenario with an emission factor of 437\({{\,{\rm{kg}}}}{{{\,{\rm{CO}}}}}_{2}\,{{{{\rm{t}}}}}_{{{{\rm{CS}}}}}^{-1}\). e, f Two cases with natural gas prices of €30 and €60 MWh−1 for EU ETS prices of €80 and €\(150\,{{{{\rm{t}}}}}_{{{{{\rm{CO}}}}}_{2}}^{-1}\). e Low-emission NG-DRI-EAF scenario with an emission factor of 1.13\({{\,{\rm{t}}}}\,{{{{\rm{CO}}}}}_{2}\,{{{{\rm{t}}}}}_{{{{\rm{CS}}}}}^{-1}\). f High-emission NG-DRI-EAF scenario with an emission factor of 1.67\({{\,{\rm{t}}}}\,{{{{\rm{CO}}}}}_{2}\,{{{{\rm{t}}}}}_{{{{\rm{CS}}}}}^{-1}\), representing an extension of the EU ETS to methane based on the 20-year global warming potential (GWP20) of methane and upstream emissions with 3 % leakage.

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