Key takeaways Historically, steelmaking has been a dirty process, but new technologies are changing this Green steel is made using electric furnaces powered by renewable energy as opposed to coal Many steel companies are transitioning to green steel and could be a smart investment
As more industries work to become more environmentally friendly, it was only a matter of time until the trend came to steelmaking.
Historically, making steel is a dirty job that adds pollution to the air. But thanks to technology, a cleaner version of steel, green steel, is now available. Let’s explore what green steel is and the stocks to consider investing in to profit from this transition.
How steel is manufactured
Steel is made from melting iron and carbon together in a blast furnace or electric arc furnace to turn both ingredients into molten steel. The blast furnace generates the high temperatures needed to melt iron ore and carbon. In turn, the carbon used to produce steel is released in large amounts as carbon dioxide into the air. Between 1.5 and 3 tonnes of carbon is released into the air for every tonne of steel produced.
Electric arc furnaces, primarily used for melting scrap steel, typically rely on power generated by nearby power plants. The power plants use a variety of materials to generate electricity for the furnaces, which may include burning coal.
The blast furnace process, also known as the Bessemer process, results in ground, water and air pollution that contaminates the site and lowers air quality for the employees, nearby residents and the environment. Great strides have been made over the decades to reduce the amount of contamination and pollution produced by steel mills, but it’s almost impossible to overcome the waste generated by steel manufacturing.
Steel manufacturing is a vital part of the economy with its products underpinning the infrastructure needed for the construction of just about everything people use daily. Fortunately, green energy generation technologies are making it easier for steel manufacturers to move away from the processes that pollute and towards ones that