Fuel switching in the iron and steel industry, using forest biomass, is viewed as a short to medium term solution to reducing the CO2 emissions from the steel sector. Implementing biomass as an alternative fuel or reductant in different process stages during steelmaking is met with certain challenges such as technical restrictions regarding substitution potentials and feasibility limits. Judging by the energy intensity of producing steel, the forest biomass requirement is expectedly large and this in itself results in a competition with other biomass users. More so, as a limited and spatially variable resource, the options for localising biomass conversion technologies as well as supplying both the raw material and final product furthers the complexity of biomass utilisation in iron and steel production.

In this study, a spatially explicit techno-economic modelling approach is employed as a tool for optimising the value chains of upgraded biomass products towards the goal of achieving decreased CO2 emissions from different process stages in the steel industry. The impact of carbon taxes on the fossil energy replacement with the upgraded bio-products is evaluated. The scope of the work is limited to the iron and steel sector in Sweden, where ambitious national climate goals for net-zero greenhouse gas emissions are targeted by the year 2045.

Results from the optimization model show the plant localisations for biomass conversion, and a roadmap for addressing the challenges already identified is presented based on the demonstrated relationship between carbon taxation levels and share of fossil energy substitution. The impact of biomass supply for metallurgical purposes is briefly discussed against the backdrop of the existing forest industries.