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Comment by londons_explore | Hacker News Reader

This demonstrates that the tech is near to being usable at scale.

The thing that doesn't add up is the price... While coal is still usable as an energy source for making steel, it doesn't make sense to use electricity.

And if one country outlaws using coal for steelmaking, then steelmakers will just move to another country - steelmaking is ferociously competitive, and lots of countries subsidise steelmaking because it is strategically important.

This tech will remain on the sidelines for 'green' projects only until there is some kind of worldwide carbon tax/cap/quota system.

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Correct. This is a place where regulation could play a role if the market is large enough. For example: If the Netherlands would prohibit coal for steelmaking, it would just bankrupt the 1 steel mill they have. If however, the EU would prohibit coal for steelmaking, _and_ introduce a carbon tariff/tax on imported steel that was made with coal, it would be a significant enough market for companies to still compete for.

It would likely kill the export market for basic steel from the EU, as well as raise steel prices across the continent. Long term benefit might be that the EU could position itself as a technological leader on coal-free steel.

No easy options I suppose.

This is probably a dumb question but:

Given how cheap steel appears to be, would it cause any significant damage to the rest of the economy if steel prices went up because of this?

The price of steel feeds into the price of lots of other things. Cars, buildings, bridges, etc.

If steel is more expensive, then the quality of life of most people will go down, even if people don't walk into walmart and think "today I'll buy some steel".

Feeds in yes, but how significant is it as an input cost? Would doubling the price of steel increase general inflation 0.1% or 10%?

(Even as a vague number; economics is never going to be my job).

In theory, either the price will go up so much that people use less steel or other goods will stop being produced to free up more energy for steel production so that it stays level. Possibly some combination. If governments make steel production harder there aren't a lot of other ways the story would end. It is impossible for the process to be less efficient without prices moving enough to change behaviour. Something has to give.

Someone else mentioned that prices in general would go up, this is correct but there is also another factor. Steel is the primary material used to build manufacturing equipment and there aren't any good replacements when you need something big, heavy and cheap enough to finance that can be used to mass produce other goods. This equipment has to be durable, have well known properties and you need to be able to make it using existing machine tools and processes. So if steel becomes much more expensive not only will everything become a lot more expensive, you will also negatively impact the creation of new businesses and innovation in manufacturing.

This is one of the major second order effects that always springs to mind when people just float the idea of increasing the cost of some material that produces CO2 as a byproduct as if just pulling a lever or adding a tax will solve the problem. The economy is a giant Jenga tower where all of the lower blocks are fossil fuel based processes. We sit way up on top where we can't see the bottom of the tower and we think "wow look at all this new stuff we've made, we sure are great! We should get rid of all that old junk so we can build more new stuff up here!" and maybe you can knock out a few of the pieces on the bottom without causing a disaster but eventually if you take out enough of them the whole thing will come crashing down.

If you want to build a carbon free economy then you need to start a new tower and you need to solve all of the fundamental problems in a new way with new technology that doesn't use fossil fuels and it needs to be as cheap or cheaper than what we can do now. That's a monumental task. And no, you can't knock over the first tower before starting the new one unless you want billions of people to die, most likely including you as well.

> The economy is a giant Jenga tower […]

A Jenga tower is in unstable equilibrium. Push it a little bit away from its resting configuration and it collapses.

The economy is in stable equilibrium, mostly, more or less. Push it by increasing the price of some commodity, which happens all the time, and buyers look for alternatives and efficiencies, which dampens the effect of the push. In all likelihood things settle in a new equilibrium not far at all from the first.

It’s a much more resilient system than you’re giving it credit for. Totally different dynamics than the party game.

Right, and that CO2 will also impose a cost that we’ll also have to pay for. Higher global temperatures means fewer glaciers. Nearly two billion people in the world depend on glacial run off for their water [1], which a lot of will be gone in a few decades.

Rising global temperatures will also mean melting ice and rising sea levels. Low level agricultural areas, such as those in Southeast Asia will, will see the ocean encroach 30-40 kilometers onto productive rice paddies with just a few feet of sea level rise [2].

It might be fine if these people just move, but we’re talking about displacing hundreds of millions to billions. Migrations like those of Syrians moving into Europe will seem small by comparison.

I’m not going to mention the retarding economic effects of more stable regions having many more hotter days, or the impacts of more erratic weather due to arctic amplification and a more erratic jet stream. We may have to move or build new equipment someplace else.

All of this means that we will have to build a new tower anyways, but we’ll have to do it with less resources, less time, and on a table that’s shaking constantly.

Perhaps putting a tax or price on carbon will retard economic advancement, but so will unchecked climate change. The benefit of taxing carbon is that we don’t have governments directing how to decarbonize. Businesses can still innovate to be competitive, we will be pricing in an externality that we’ll just pay for in other ways, at a higher price, later on.

[1] https://www.washingtonpost.com/climate-environment/2023/01/0...

[2] https://vlscop.vermontlaw.edu/2019/11/07/sea-level-rise-food...

If you are concerned about the costs of raising CO2, I would suggest looking first at the places where it can be cut with the smallest investment and smallest economical impact that add to more than 80% of the CO2 emissions, like transportation and electricity generation.

The places that require the highest investment, could completely ruin the life of most people, and add up to a single digit percentage of the problem (or less) are better left to research.

Carbon taxes would indeed help. More because it will let people do the calculation above than for any other reason. But trying to hijack a discussion about carbon substitution in steel making into a "we must act because the sky is falling" is in very bad taste.

This is similar to carbon taxes for airplane fuel. From all the fuss you'd assume plane ticket prices would be tripling or something, but some estimates are like 8% total price increases, since you still have to pay pilots and ground staff etc. so fuel is a major cost, but not the only cost.

Diamond/water paradox comes to mind.

>Given how cheap steel appears to be, would it cause any significant damage to the rest of the economy if steel prices went up because of this?

Yes but most likely way less than the damage of climate change.

China and India are going to consume any excess fossils at decreased costs. Decarbonization is tricky.

We should be thinking more about next gen nuclear and mitigation strategies.

Actually cost is why companies are doing research into things like this. Carbon emissions are a problem for heavy industries in the sense that it will raise their cost and this is something they have to address mid to long term.

Meanwhile electricity prices are not a constant and trending down. It might be too expensive now but at some point it might actually become the cheaper option if cost continues to drop. Also, large energy users, like steel plants, would probably end up investing in their own energy generation. Wind, solar, maybe even nuclear. That turns electricity from a variable cost into a fixed cost for them. So, it's not as clear cut that electrifying their processes is long term more expensive. It might actually turn around and become the cheaper option. Carbon taxes of course might make this attractive sooner.

But even if it were more expensive, another reason for investing in de-carbonizing steel would be that there is actually a growing demand for companies to source their materials from companies that have lower carbon emissions. Steel is used by a lot of companies and those companies too are looking to clean up their supply lines.

And of course because some companies are researching and trying different options here, other companies now need to worry about having a plan when their competitors start producing cleaner and cheaper steel.

All good reasons for companies to be investing in this now rather than in 30 years.

My naive impression is that heavy industry is (and has been) doing a lot of research into aligning their processes with more intermittent future energy characteristics.

I.e. moving from a "we want to run the plant at optimal efficiency, damn the load pattern" to "we want to be able to optimize by following energy costs, even if that means we need to idle sometimes"

Processes were very well optimized for the former, hence the greenfield for research into the latter.

>even if that means we need to idle sometimes

Is that even possible? For a huge industrial process like a steel mill, I think the capital and operational costs are so massive you want to run them continuously. Even "turning the plant on" could take many hours to get everything to temperature and stable.

That's where the temperature requirements come in. Afaik, they're the prime driver of intermittent-tolerance.

The pandemic showed industry that even if they wanted constant input & output it isn't guaranteed, and if you have to shutdown processes either because of grid issues or because a logistical quagmire is interrupting ore supply it's still a shutdown.

> This tech will remain on the sidelines for 'green' projects only until there is some kind of worldwide carbon tax/cap/quota system.

Doesn't need to be worldwide. The EU and US are large enough markets that can put up import tariffs on carbon.

In any case, the production of coal is going to go down rather sooner than later... steelmaking should prepare for this.

There is massive investment happening in green steel production. There is a high demand for green steel from car manufacturers among others.

It's easy to dismiss anything out of ignorance, but it only amounts to misinformation

Car manufacturers at the moment are happy with "100% recycled with carbon free processes" for their steel.

That means you take scrap steel, put it in an electric arc furnace, and power that furnace with matching wind/solar contracts.

So far, carmaking uses less steel than comes into recycling plants, so it hasn't really caused any change in the market.

Are you basing this on real knowledge or a guess？

My understanding, from when I lightly researched Japan Steel as a stock, was that car makers want fresh steel with higher guaranteed performance. Thus they can use less steel and reduce weight.

Since vehicles are mobile the reduced weight will have a much bigger carbon reduction than from using recycled steel.

We make welded steel tubes primary for car industry, and as far I know, we also use just "new" steel. Still, since 2 years or so, in all our mail signatures is something about an green steel award we won.

But they just anounced, our factory will be closed by end of 2023.

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