March 2023
Steel producers are looking to realise their decarbonisation plans by increasing steel scrap usage. In recent times, major steel producers have acquired steel scrap recycling companies to secure a reliable source of metallics raw material input. Steel scrap is the silver bullet to steel producers offering a solution for decarbonisation in both BF/BOF and EAF operations for the production of green steel.

China generally applies a higher scrap ratio within its BF/BOF operations as a substitute for ferrous feed when sintering is restricted under the emissions control policy. BOF scrap charge rates can be more than 300kg/t liquid steel but are typically around 150-200kg/t when not restricted by scrap availability or pricing. Every 1 tonne of scrap steel utilised replaces approximately 1.4 tonnes of iron ore and 0.7 tonnes of metallurgical coal and the energy costs associated with producing pig iron from these raw materials.


Policy Plans

China’s steel scrap policy has been outlined within its 14th five-year plan (2021-2025). The government is aiming to increase scrap usage to 320Mt by 2025, this coincides with lifting a two-year ban on imports of steel scrap as China targets and implements its ‘high-quality growth model’. Total scrap consumption in China was 250Mt in 2022, down 6.5% year on year. To reach this target, scrap consumption will need to increase by 28% over the next three years.

China imports the majority of its scrap from Japan and South Korea. In 2022 China imported 0.6Mt of scrap up from 0.55Mt or 1% from the prior year. EAF steelmaking currently accounts for 13.8% of Chinese production. AME expects China’s proportion of EAF steelmaking to be 15.9% by 2025 and 19.1% by 2035.

India’s steel scrap recycling policy was introduced in 2019 with the purpose of increasing the availability and use of steel scrap throughout the country. The Energy and Resources Institute believes the usage of steel scrap within BF/BOF steel production will have an average increase to 20-26% by 2050, from its current 10%. Due to India’s heavy reliance on coal, carbon emissions from its steel industry contribute to around 24% the country’s total carbon emissions.

To reduce carbon emissions and to achieve the government’s goal of reaching an annual steel capacity of 300Mt, the Material Recycling Association of India expect the country to import 30Mt of ferrous scrap by 2030. This implies, India’s steel scrap imports are likely to grow to around 12Mt in fiscal year 2024, up from 5Mt in 2022 or an increase of 140% over the period.  



To strengthen the domestic steel scrap industry the Indian government announced in May 2021 plans to have 2-3 vehicle scrapping units in every district across the country. India currently imports US$2.85bn worth of scrap steel each year with the new scrapping strategy expected to result in a 40% reduction in raw material costs.

The government launched its Vehicle Scrappage Policy in 2021 with the aim of removing commercial vehicles older than 15 years and passenger vehicles older than 20 years when they fail a ‘fitness test’. India has about 5 million light motor vehicles more than 20 years old. Incentives for scraping older vehicles will include no registration charges, discount of new vehicle of 5%, and concession of road tax of up to 25% for passenger vehicles.

The US is a developed steel industry with a high proportion of EAF steelmaking technology, and consequently high steel scrap recycling rate. Recycling rates are 98% for structural steel (construction), 88% for appliances, 71% for rebar and reinforcement steel and 70% for steel packaging. 

Approximately 70% of steelmaking in the US relies on EAF and growth will continue as old blast furnaces close and new EAFs open. According to the National Minerals Information Centre the scrap recycling rate in the US has averaged between 80-90% during the past decade. Recycling of automotives is almost 100% each year equating to with more than 15Mt of recycled steel, equivalent to 12 million vehicles.



ArcelorMittal acquired three steel scrap recycling operations during 2022. These include, John Lawrie Metals (Scotland), ALBA International Recycling (Germany), and Riwald Recycling (Netherlands). While Nucor was early to the steel scrap race acquiring Advantage Metals Recycling and Garden Street Iron & Metal Inc. via is subsidiary The David J. Company, in October 2021.

Last year Steel Dynamics acquired ROCA ACERO SA de CV (ROCA) as part of its North America raw material procurement strategy. ROCA operates a ferrous and nonferrous scrap metals recycling business. Specific operations include four scrap processing facilities positioned near high-volume industrial scrap sources located throughout Central and Northern Mexico.

More recently, JSW Steel acquired a 0.12km2 parcel of land for a steel recycling joint venture with New Zealand metal recycler National Steel Holdings. The new recycling plant will be located at Pen, Raigad district, Maharashtra and is approximately 4km from the company’s Dolvi Works. Commissioning is expected early next year and once operational the scrap will be utilised at Dolvi Works and is expected to be replicated at other steel plants of JSW Steel.


Double-Slag Refining

Japan’s JFE Steel has reduced is CO2 emissions with the introduction of a double-slag refining process (DRP) for pig iron pre-treatment.  The ecofriendly DRP has been rolled out at each steelmaking facility within JFE Steel’s operations. The technology involves charging pig iron and scrap into a converter and their subsequent desiliconization, after which the slag is discharged and the pig iron is dephosphorisation.

The technology allows the company to increase the amount of scrap in the charge (molten iron versus scrap charged into the converter), while the pig iron content can be reduced to 82%, down from 90%. The company will use eco-friendly double-slag refining process (DRP) to allow additional use of scrap in converters. Compare to traditional methods up to 10% of scrap could be use, while application of DRP allows up to 18% scrap usage. As part of its decarbonisation plans JFE Steel is targeting a scrap ratio of 20% from its current 12-15% ratio.



Equipment Suppliers

Various steelmaking equipment suppliers have increased their technological parameters in response to the changing industry environment. Danieli has its Q-One digital power operating system to allow effective control of arc current and voltage of the EAF. This provides more efficient and stable power delivery to the furnace.

This hybrid EAF system will be installed at Liberty Ostrava as part of their decarbonisation plan. Initially, two EAFs will be installed and allow of metallics ratio of 40% scrap and 60% hot metal. When all the sites BFs/BOFs are shut down, the company expects to utilise 100% scrap or 60-70%, and 30-40% DRI/HBI from the market.

Tenova utilise ‘Consteel Evolution’ technology where its low impact EAF steelmaking has been based on comprehensive investigation of the complexity of scrap heating phenomenon taking place inside the Consteel system.

The steelmaking process in Tenova’s EAF allows the raw feed materials to be heated and continuously charged within two tunnels. The provides simultaneously control is gaseous emissions. SteelAsia Manufacturing Corporation has contracted Tenova to install a 0.6Mtpa capacity Consteel Evolution EAF in Lemery, Philippines, with commissioning in 2024.