Carbon-free processes
A key part of LKAB’s strategy is to increase the value added to our iron ore products by processing, while also developing carbon-free processes. This strengthens our competitiveness and contributes to a more sustainable iron and steel industry.
LKAB is driving a major transformation to reduce carbon emissions and increase the share of fossil-free processes throughout the value chain.
An important element of this is to transform pellet production, where tests and development work are in progress to replace fossil fuels with bio-oil. The tests have been successful and resulted in the world’s first iron ore pellets produced with fossil-free fuel.
Our production of carbon-free sponge iron is part of LKAB’s strategic transformation. Sponge iron is an umbrella term for direct reduced iron (DRI) and hot briquetted iron (HBI). Carbon-free sponge iron marks a change in how we work to strengthen our market position, increase the value added to our products by processing and reduce carbon emissions throughout the value chain. This production is based on technology that uses fossil-free hydrogen, made using electricity from Swedish sources.
Carbon-free processes and the increased costs for carbon emissions, combined with the fact that demand for recycled steel in the form of scrap as raw material for electric arc furnaces is predicted to be limited, means that the value of our products – which can help reduce emissions – is expected to increase.
The supply of high quality scrap will not be sufficient. Primary iron raw material of high quality is required and here LKAB’s products will be a necessary component in the process, enabling LKAB to meet customers’ specific needs.
Research also shows that sponge iron produced from LKAB’s iron ore using fossil-free hydrogen is of high quality.
This confirms that our initiative is not only good for the climate but also leads to better industrial processes and products, creating competitive advantages in the global market.
The steel industry accounts for around 7 percent of the world’s carbon dioxide emissions. Steel producers who use iron ore can reduce their emissions of carbon dioxide, among other things, by using more high-grade iron ore products, which LKAB can provide – our iron ore pellets being among the most climate-efficient in the world.¹
By being able to transition production to carbon-free processes in the future, resulting in carbon-free products, we can take a step forward in the value chain and actively contribute to solving the problems that we have previously been part of.
This solution not only reduces emissions from steel production, but also strengthens the development of fossil-free steel, which is expected to play an important role in modern society and become a significant part of the climate transition. It is expected to be widely used in products such as wind turbines, electric vehicles and sustainable building materials.
¹) As compiled by CRU
