South Africa’s steel industry can transition to zero-emission production, while addressing the environmental and social costs of its operations that are borne by local communities, according to a Vaal Triangle nonprofit’s policy brief.
The brief, recently released by the Vaal Environmental Justice Alliance (Veja), is a comprehensive analysis of the decarbonisation roadmap of ArcelorMittal South Africa (Amsa) and its implications for local communities.
ArcelorMittal intends to reduce greenhouse gas emissions from the operations of its Vanderbijlpark, Saldanha and Newcastle plants towards a net-zero goal by 2050.
It also intends to reduce emissions by 25% by 2030, according to its roadmap published in January last year.
“The aim is to reduce its direct emissions from coke, iron, and steel production plants, as well as indirect emissions embedded in the electricity that Amsa uses from Eskom fossil-fired generators,” the policy brief said, noting that the roadmap is in line with ArcelorMittal’s global plans.
Iron and steelmaking is a carbon-intensive process that produces about 8% of all greenhouse gas emissions worldwide.
Together with Hydrogen Watch (H2Watch), a loose civil society network, Veja said it called on ArcelorMittal to provide clarity on how it plans to compensate people for past environmental and health damage, prevent future harm and ensure meaningful discussions with those affected.
“Additionally, Veja seeks transparency on the potential social and economic impacts of ArcelorMittal South Africa’s transition, particularly regarding job security, skills development and community well-being,” said the nonprofit, which focuses on air quality, waste, water pollution and climate change in the Vaal Triangle, known for being one of the most polluted areas in the country.
For years, Veja and the Centre for Environmental Rights have argued that emissions from ArcelorMittal’s plants cause severe health effects in nearby communities and that greenhouse gases from the company’s current steel-production process contribute to global warming and climate change.
The policy brief highlights hydrogen direct reduction of iron (DRI) technology as a viable solution for sustainable steel production. It leverages South Africa’s rich iron ore deposits and renewable energy resources and “offers an opportunity to revive the struggling steel sector while reducing its carbon footprint”, Veja said
“We’ve hosted dialogues in Vaal communities about the policy brief and ArcelorMittal South Africa’s decarbonisation plan. These discussions revealed both hopes and fears, particularly regarding job security, the need for new skills and the protection of vital resources like water,” said Mduduzi Tshabalala, the programmes coordinator of Veja.
The company had not followed a public participation process in developing its decarbonisation roadmap, he said. “It’s quite difficult to trust the proposed plans because we don’t know how people are going to be affected in terms of the socio-economic benefits.”
He said Veja would continue to push for compliance with the National Environmental Management Act and “will continue monitoring ArcelorMittal South Africa’s environmental practices”.
Energy expert Hilton Trollip, who wrote the policy brief, highlighted the potential for South Africa to lead in zero-emission steel production by using hydrogen technology and renewable energy.
“Communities have long endured the environmental costs of steel production while depending on it for their livelihoods,” he said. “Now, they are taking an active role in shaping the future of the industry, demonstrating that local voices can influence major industrial decisions.”
Steel is the world’s most important metal and the policy brief said its widespread use in buildings, cars, trains, and household appliances makes it central to the “modern way of living”.
It said national governments, often “shield companies” from competition, as well as subsidising steel multinationals.
To phase out the use of fossil gas and coal in steelmaking, the global steel industry needs cooperative actions in the industry and between governments. “South Africa and individual steel companies cannot take these actions alone.”
The brief noted how, until now, making iron from iron ore has relied on fossil-gas or coal feedstock. Most carbon emissions result from these primary iron-making processes.
“Coal or gas are not only used as fuel, as the iron-making process needs the carbon in the coal or gas to react with the iron ore to transform it into raw iron. Primary steelmaking has thus been called a ‘hard-to-abate’ sector — an industry in which it is difficult to eliminate or significantly reduce greenhouse gas emissions,” it said.
Producing steel has historically emitted a lot of carbon dioxide (CO2), about 2.2 tonnes for every tonne of steel. “Green hydrogen can be used instead of coal or fossil gas to make iron from iron ore. When this hydrogen reacts with the iron ore, it produces iron and water, with no CO2.”
Green hydrogen is made by using renewable energy to split water into hydrogen and oxygen in an electrolyser.
Using renewable energy in the electric arc furnace to produce secondary steel can virtually eliminate carbon dioxide emissions, because they are mainly from the electricity used. In South Africa these emissions, primarily from burning coal in power stations on the Eskom grid, amount to about 0.5 tonnes of carbon dioxide per tonne of steel.
“Although the technology exists to reduce CO2 emissions from blast furnaces/basic oxygen furnaces by capturing the CO2 and either using it in industry or storing it, this technology remains to be proven in industry,” the document said.
“Also, as it is not possible to capture all emissions from blast furnaces/basic oxygen furnaces, they cannot be employed for zero-emissions primary steelmaking, whereas DRI furnaces can.”
It’s crucial “to recover, maintain and grow the South African iron and steel industry”, the brief said.
“Maintaining production at Amsa Vanderbijlpark is very economically beneficial but pollution levels and the potential for full decarbonisation are concerns. If the low-carbon blast furnace doesn’t work out, they may need to consider more DRI furnaces at Saldanha and/or electric arc furnaces at both Vanderbijlpark and Saldanha to maintain and increase South African steel production levels.”
Investing in direct iron reduction, electric arc furnaces, blast furnaces and renewable energy at the Saldanha and Vanderbijlpark plants can benefit frontline communities.
“Industries connected to steel production also have the potential to benefit frontline communities significantly. This includes industries making renewable energy equipment and fabricating metals (including structural metals), and the automobile industry.”
The new generation electric arc furnace may result in fewer jobs compared to blast furnaces, but
jobs in renewable energy will become more sustainable if components are locally manufactured, the document said, noting that Vanderbijlpark and Saldanha are suitable for manufacturing renewable energy equipment.
“Even if the government doesn’t incentivise this, it could be part of the company’s just transition efforts.”
There will be significant environmental benefits from replacing the blast furnace with an electric arc furnace, both at the blast furnace site and along the coal-supply chain. Green hydrogen direct iron reduction is the most promising technology (with minimal negative impact) for expanding primary iron manufacturing, and hence for primary steel and many linked industries, which “remain critical for South Africa’s development needs.”
“One of the things that Veja has been agitating for is the decarbonisation of Amsa so when Amsa announced its decarbonisation roadmap, we felt that it was important to commission the policy brief, which could be used as an educational tool by Veja in their engagements with ArcelorMittal,” said Dinga Sikwebu of H2Watch.
There are organisations in the civil society network that are highly critical of green hydrogen developments, he added. “They see this either as another form of greenwashing or extractivism, or that this is a way for the fossil-fuel industry to extend their lifespan. There are other groupings within H2Watch who feel that maybe there can be some role for the use of green hydrogen … in the so-called hard-to-abate sectors, such as steel, fertilisers and cement.”
“For those two reasons, we felt looking at Amsa’s decarbonisation roadmap may be a good thing, firstly to help an affiliate member of the network [Veja] but also to look at whether green hydrogen is an option to decarbonise.”
Jerry Dungu, ArcelorMittal’s principal specialist for product development, welcomed the opportunity to participate in the policy brief.
“This platform allowed diverse stakeholders to provide valuable feedback on our plans and we are grateful that this critical issue is being highlighted in broader conversations about the just transition,” he said in a statement.
