The use of charcoal as a fuel and reductant in ironmaking and steelmaking in place of fossil fuel-based carbon sources has been assessed from both an environmental and economic point of view. Life cycle assessment methodology has been used to indicate potential reductions in greenhouse gas emissions resulting from charcoal substitution rates up to 100% in the integrated, direct smelting and mini-mill routes for steelmaking. The results indicated that based on typical costs of charcoal and coal, charcoal is not competitive with coal in the steelmaking applications considered. However, the introduction of a carbon trading scheme or carbon taxes can be expected to improve the competitiveness of charcoal compared to coal. Based on a long-term price of $US90/t for metallurgical coal, a carbon tax in the order of US$30–35/t CO2 would be required with the direct smelting and integrated routes for the overall charcoal and coal costs to be roughly equal, including a charcoal electricity co-product credit. However, if the recent increase in price of metallurgical coal is sustained for an extended period of time, the required carbon tax rate would fall to about US$18/t CO2.
2009 by The Iron and Steel Institute of Japan