Energy Intensity of Steel Manufactured Utilising EAF Technology as a Function of Investments Made: The Case of the Steel Industry in Poland

Abstract

The production of steel in the world is dominated by two types of technologies: BF + BOF (the blast furnace and basic oxygen furnace, also known as integrated steel plants) and EAF (the electric arc furnace). The BF + BOF process uses a lot of natural resources (iron ore is a feedstock for steel production) and fossil fuels. As a result, these steel mills have a significantly negative impact on the environment. In turn, EAF technology is characterised by very low direct emissions and very high indirect emissions. The raw material for steel production is steel scrap, the processing of which is highly energy-consuming. This paper analyses the energy intensity of steel production in Poland as a function of investments made in the steel industry in the years 2000–2019. Statistical data on steel production in the EAF process in Poland (which represents an approximately 50% share of the steel produced, as the rest is produced utilising the BF + BOF process) was used. Slight fluctuations are caused by the periodic switching of technology for economic or technical reasons. The hypothesis stating that there is a relationship between the volume of steel production utilising the EAF process and the energy consumption of the process, which is influenced by investments, was formulated. Econometric modelling was used as the research method and three models were constructed: (1) a two-factor power model; (2) a linear two-factor model; and (3) a linear one-factor model. Our findings show that the correlation is negative, that is, along with the increase in technological investments in electric steel plants in Poland, a decrease in the energy consumption of steel produced in electric furnaces was noted during the analysed period.