The Role of Scrap in the Green Transformation

As the steel industry works on reducing its carbon emissions, scrap is increasingly becoming the material of choice. According to forecasts by the Boston Consulting Group (BCG), the proportion of scrap in steel production will increase from 35% today to 50% by 2030. Annual scrap consumption in both China and the USA is expected to rise by 40 to 50% by then, mainly due to increasing demand for steel. At the same time, the shift to electric arc furnace (EAF) steelmaking, which relies on recycled scrap, will further drive scrap demand.

Both steel manufacturers and scrap suppliers will have to adapt to this change and take account of the changing market.

1. The challenge of supply bottlenecks

The processing industry is facing the major challenge that the available steel scrap will not be sufficient to meet the increasing global demand. Rising domestic consumption is expected to lead countries to cut back on exports. BCG forecasts that the current surplus of 9 million tonnes of steel scrap will turn into a considerable deficit of 15 million tonnes by 2030. This will primarily affect countries that are dependent on scrap imports.

Developing countries face additional difficulties in setting up a recycling infrastructure, which affects their ability to utilise scrap effectively.

Countries that import a large percentage of their scrap requirements will be significantly affected if they fail to secure sufficient scrap in the required qualities. It is foreseeable that with scrap imports drying up, raw material prices will rise and probably reduce the profit margins of the steel industry. Companies and political decision-makers must prepare for the impending shortage in order to develop strategies to protect the domestic steel industry. No fewer than 60 countries are already restricting scrap exports.

In terms of procurement, there is already a trend for some steel manufacturers to acquire scrap yards. They want to secure a constant supply. In the USA, 25 to 30 % of the scrap supply from scrap yards is already owned by steelworks. In Europe, for example, the Luxembourg-based company ArcelorMittal recently purchased a number of scrap recycling plants from the German company Alba International.

TSR40 - High-purity scrap for blast furnace charging

In the past, steel mills have tried to compensate for higher raw material prices by importing semi-finished products such as billets and slabs from low-wage countries. However, with rising CO2 prices, the import of semi-finished products for the steelworks' material mix is becoming increasingly unprofitable. Melt optimisation, on the other hand, is an effective approach to making effective use of this scarce commodity.

To this end, steel manufacturers are using advanced techniques such as AI-supported programmes to evaluate their scrap purchases and determine the most cost-effective mix of these raw materials to produce the desired steel grades. This can prevent the steel from failing to meet quality and classification requirements. This leads to considerable increases in efficiency and cost savings.

TSR40 is an improved version of the standard E40 scrap, which is obtained from shredded cars and household appliances and is characterised by a low content of critical elements such as copper and chromium. The production process is being continuously developed as part of the REDERS research project, which has been running since 2019 with project partners VDEh-Betriebsforschungsinstitut GmbH, Hüttenwerke Krupp Mannesmann GmbH and thyssenkrupp Steel. In April 2023, the German recycling group TSR inaugurated its processing plant in Duisburg, which is partly financed by the state of North Rhine-Westphalia. Up to 450,000 tonnes of different input materials – such as old car bodies, mixed scrap and large household appliances – are now processed into the recycled product TSR40 every year.

"It's like the recipe for a cake - we give the steel manufacturers a material with a clearly defined content," says Christian Blackert, Head of the TSR Rhine-Ruhr branch, during the presentation of the project at ecoMetals Day last autumn. "With TSR40, we are leaving the path of essentially selling waste and starting to give scrap the status of a product."

2. Metallurgy requires thinking in cycles

Recycling processes in the automotive sector are currently associated with a high manual labour input and limited material purity. Therefore they are economically attractive only for a few vehicle components. However, there is a growing number of examples of the successful application of the circular economy, particularly in vehicles.

The Car2Car project is an innovative approach to vehicle recycling that aims to close material loops and improve the quality of secondary raw materials. A consortium including major industrial companies such as BMW, thyssenkrupp Steel Europe and others is working to improve the recycling processes for steel, aluminium, glass, plastics and copper. This initiative includes the development of automated dismantling and advanced processing techniques using artificial intelligence to optimise recycling efficiency and material purity.

The Helmholtz Institute Freiberg for Resource Technology (HIF) has been developing solutions for the non-invasive sensor-based identification of raw materials for several years. As part of the Car2Car campaign with 500 end-of-life vehicles, laser-induced breakdown spectroscopy (LIBS) is used in combination with optical sensors to identify metal and alloy types in the shredded material stream. The efficiency of the process for breaking down the components in the material mixtures is being investigated using a demonstration system installed at the HIF.

© Source: Gramlich A. & Krupp, U. (2022). Green steel with a red problem - steel recycling in the context of the circular economy

Georgsmarienhütte and Volkswagen are partners in recycling for the production of green steel. The partnership is an example of a closed-loop recycling process in which metal waste from the Volkswagen plant in Osnabrück is processed into new high-tech steel at the Georgsmarienhütte steelworks, which then flows back into Volkswagen's production. GMH Gruppe utilises its expertise in steel production and reports that all of its steel products are made entirely from scrap. This process significantly reduces the carbon footprint associated with steel production.

The two examples illustrate the potential of scrap recycling and the use of renewable energy to reduce emissions in the supply chains and in the end products.

3. Scrap – the "red problem"

Melting scrap (or DRI) in the electric arc furnace requires only 20 % of the energy of the primary route and can already be climate-neutral, depending on the electricity mix used. In principle, any type of steel can be produced via the electric arc route, depending on the quality of the metal input. Nevertheless, electric steel is often considered to be of lower quality. However, this is not due to the unit itself, but to the input materials, which today is generally scrap.

A number of technical problems need to be taken into account when recycling alloyed steels in particular. While some alloying elements are lost to the slag during remelting, other elements such as copper or molybdenum tend to accumulate over time. While low concentrations of molybdenum are in most cases not harmful but beneficial for the steel properties, localised accumulations of copper can lead to brittle fracture during hot forming and impair the workability of steels.

However, during remelting and refining in the electric arc furnace, some of the impurities in the scrap cannot be removed economically, so that a gradual accumulation of harmful impurities leads to a deterioration in quality.

For example, selective oxidation of copper from molten steel is not possible because the oxygen affinity of copper is lower than that of iron. However, a circular steel economy based on the recycling of scrap is severely hampered by the increasing accumulation of Copper (especially from electrical and electronic components of vehicles) in terms of the processing, application and safety of steels.

© Comparison of the achievable copper concentration and the estimated relative energy and cost of copper separation processes. Published under the terms of the CC-BY licence Copyright 2017, American Chemical Society, https://doi.org/10.1021/acs.est.7b00997

Up to now, the increasing copper contamination has been diluted with fresh primary iron, but this generates CO2 emissions from conventional reduction processes. Moreover, the adding of primary material contradicts the aim of increasing the proportion of recycled material. The challenge, particularly in the production of low-contamination steels, is therefore to deal with impurities in scrap. Research is needed to increase the scrap content while maintaining quality in order to fulfil the demanding specifications of flat products, e.g. in the packaging or automotive industries.

Ulrich Krupp and Alexander Gramlich at RWTH Aachen University, for example, are researching the influence of elements such as copper on the properties as well as the processability of various types of steel and are working on new approaches for tolerating higher copper concentrations.

Their research results show that copper contamination, which is unavoidable in steel recycling, has the potential to increase the hardness and strength of high-strength steels if it can be controlled during processing. If the heat treatment is adapted accordingly, the accumulation of copper can even have a positive effect on the mechanical properties.

In other research, Isnaldi R. Souza Filho, research group leader at the Max Planck Institute for Iron Research in Düsseldorf, et al. show that copper can be effectively vaporised from iron-copper-oxygen melts during hydrogen plasma-based melt reduction. Even without the presence of hydrogen, copper concentrations of 1 wt.% can be reduced to below 0.1 wt.%. The purified resulting iron-oxygen melt could be used for a subsequent reduction step. It is suggested that after reaching an acceptable copper level, the inert plasma source is replaced by a moderately reducing one to convert the oxide melt into pure iron. This reduction step could be carried out using either hydrogen or other circular carbon-based reducing agents. The result would be a melt that is free of copper impurities and suitable for further processing into high-quality iron as the basis for steel production.

4. Conclusion: Scrap as a key resource for sustainable steel production

For the green transformation of the steel industry, scrap is not just waste, but a valuable resource that paves the way for more sustainable production. Innovative projects such as Car2Car and the research work of leading experts emphasise the enormous potential of recycled material in reducing CO2 emissions and conserving primary resources.

The challenges associated with the increasing use of scrap, particularly in terms of quality and the handling of impurities, continue to require intensive research and development work. However, the efforts of steel producers, recycling companies and scientists clearly show that a circular economy in the steel sector is not only possible, but also essential for achieving global climate targets.