Economic potential for substitution of fossil fuels with liquefied biomethane in Swedish iron and steel industry

Synergy and competition with other sectors

Document identifier: oai:DiVA.org:ltu-77939
Access full text here:10.1016/j.enconman.2020.112641
Keyword: Engineering and Technology, Mechanical Engineering, Energy Engineering, Teknik och teknologier, Maskinteknik, Energiteknik, Supply chain optimization, Biomethane, Biomass gasification, Iron and steel industry, Process integration, Energy market scenarios
Publication year: 2020
Relevant Sustainable Development Goals (SDGs):
SDG 7 Affordable and clean energySDG 9 Industry, innovation and infrastructureSDG 13 Climate action
The SDG label(s) above have been assigned by OSDG.ai

Abstract:

In Sweden, the iron and steel industry (ISI) is a major source of greenhouse gas (GHG) emissions. Most of the emissions result from the use of fossil reducing agents. Nevertheless, the use of fossil fuels for other purposes must also be eliminated in order to reach the Swedish emissions reduction targets. In this study, we investigate the possibility to replace fossil gaseous and liquid fuels used for heating in the ISI, with liquefied biomethane (LBG) produced through gasification of forest residues. We hypothesize that such utilization of fuels in the Swedish ISI is insufficient to independently drive the development of large-scale LBG production, and that other sectors demanding LBG, e.g., for transportation, can be expected to influence the economic potential for the ISI to switch to LBG. The paper investigates how demand for LBG from other sectors can contribute to, or prevent, a phase-out of fossil fuels used for heating purposes in the ISI under different future energy market scenarios, with additional analysis of the impact of a CO2 emissions charge. A geographically explicit cost-minimizing biofuel production localization model is combined with heat integration and energy market scenario analysis. The results show that from a set of possible future energy market scenarios, none yielded more than a 9% replacement of fossil fuels used for heating purposes in the ISI, and only when there was also a demand for LBG from other sectors. The scenarios corresponding to a more ambitious GHG mitigation policy did not achieve higher adoption of LBG, due to corresponding higher biomass prices. A CO2 charge exceeding 200 EUR/tonCO2 would be required to achieve a full phase-out of fossil fuels used for heating purposes in the ISI. We conclude that with the current policy situation, substitution of fossil fuels by LBG will not be economically feasible for the Swedish ISI.

Authors

Johan M. Ahlström

Chalmers University of Technology, Dep. of Space. Earth and Environment, Div. of Energy Technology
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Jonas Zetterholm

Luleå tekniska universitet; Energivetenskap
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Karin Pettersson

RISE Research Institutes of Sweden
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Simon Harvey

Chalmers University of Technology, Dep. of Space. Earth and Environment, Div. of Energy Technology
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Elisabeth Wetterlund

Luleå tekniska universitet; Energivetenskap
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