An Economic Model to Assess Profitable Scenarios of EAF-Based Steelmaking Plants under Uncertain Conditions

Abstract

The steelmaking processes are considered extremely energy-intensive and carbon-dependent processes. In 2018, it was estimated that the emissions from global steel production represented 7–9% of direct emissions generated by fossil fuels. It was estimated that a specific emissions value of 1.8 tCO2 per ton of steel was produced due to the carbon-dependent nature of the traditional blast furnace and basic oxygen furnace (BF-BOF) route. Therefore, it is necessary to find an alternative solution to the BF-BOF route for steel production to counteract this negative trend, resulting in being sustainable from an environmental and economic point of view. To this concern, the objective of this work consists of developing a total cost function to assess the economic convenience of steelmaking processes considering the variability of specific market conditions (i.e., iron ore price, scraps price, energy cost, etc.). To this purpose, a direct reduction (DR) process fueled with natural gas (NG) to feed an electric arc furnace (EAF) using recycled steel scrap was considered. The approach introduced is totally new; it enables practitioners, managers, and experts to conduct a preliminary economic assessment of innovative steelmaking solutions under market uncertainty. A numerical simulation has been conducted to evaluate the profitability of the investment considering the economic and environmental costs. It emerged that the investment is profitable in any case from an economic perspective. On the contrary, considering the environmental costs, the profitability of the investment is not guaranteed under certain circumstances.