Development of Direct Reduced Iron in China: Challenges and Pathways

The steel industry is considered an important basic sector of the national economy, and its high energy consumption and carbon emissions make it a major contributor to climate change, especially in China. The majority of crude steel in China is produced via the energy- and carbon-intensive blast furnace–basic oxygen furnace (BF–BOF) route, which greatly relies on coking coal. In recent years, China’s steel sector has made significant progress in energy conservation and emission reduction, driven by decarbonization policies and regulations. However, due to the huge output of crude steel, the steel sector still produces 15% of the total national CO₂ emissions. The direct reduced iron (DRI) plus scrap–electric arc furnace (EAF) process is currently considered a good alternative to the conventional route as a means of reducing CO₂ emissions and the steel industry’s reliance on iron ore and coking coal, since the gas-based DRI plus scrap–EAF route is expected to be more promising than the coal-based one. Unfortunately, almost no DRI is produced in China, seriously restricting the development of the EAF route. Here, we highlight the challenges and pathways of the future development of DRI, with a focus on China. In the short term, replacing natural gas with coke oven gas (COG) and byproduct gas from the integrated refining and chemical sector is a more economically feasible and cleaner way to develop a gas-based route in China. As the energy revolution proceeds, using fossil fuels in combination with carbon capture, utilization, and storage (CCUS) and hydrogen will be a good alternative due to the relatively low cost. In the long term, DRI is expected to be produced using 100% hydrogen from renewable energy. Both the development of deep processing technologies and the invention of a novel binder are required to prepare high-quality pellets for direct reduction (DR), and further research on the one-step gas-based process is necessary.