Economic potential for substitution of fossil fuels with liquefied biomethane in Swedish iron and steel industry – Synergy and competition with other sectors
Journal article, 2020

In Sweden, the iron and steel industry (ISI) is a major source of greenhouse gas (GHG) emissions. Most of the emissions result from the use of fossil reducing agents. Nevertheless, the use of fossil fuels for other purposes must also be eliminated in order to reach the Swedish emissions reduction targets. In this study, we investigate the possibility to replace fossil gaseous and liquid fuels used for heating in the ISI, with liquefied biomethane (LBG) produced through gasification of forest residues. We hypothesize that such utilization of fuels in the Swedish ISI is insufficient to independently drive the development of large-scale LBG production, and that other sectors demanding LBG, e.g., for transportation, can be expected to influence the economic potential for the ISI to switch to LBG. The paper investigates how demand for LBG from other sectors can contribute to, or prevent, a phase-out of fossil fuels used for heating purposes in the ISI under different future energy market scenarios, with additional analysis of the impact of a CO2 emissions charge. A geographically explicit cost-minimizing biofuel production localization model is combined with heat integration and energy market scenario analysis. The results show that from a set of possible future energy market scenarios, none yielded more than a 9% replacement of fossil fuels used for heating purposes in the ISI, and only when there was also a demand for LBG from other sectors. The scenarios corresponding to a more ambitious GHG mitigation policy did not achieve higher adoption of LBG, due to corresponding higher biomass prices. A CO2 charge exceeding 200 EUR/tonCO2 would be required to achieve a full phase-out of fossil fuels used for heating purposes in the ISI. We conclude that with the current policy situation, substitution of fossil fuels by LBG will not be economically feasible for the Swedish ISI. © 2020

Iron and steel industry

Process integration

Energy market scenarios


Supply chain optimization

Biomass gasification


Johan Ahlström

Chalmers, Space, Earth and Environment, Energy Technology, Energy Technology 1

Jonas Zetterholm

Luleå University of Technology

Karin Pettersson

RISE Research Institutes of Sweden

Simon Harvey

Chalmers, Space, Earth and Environment, Energy Technology

Elisabeth Wetterlund

Luleå University of Technology

Energy Conversion and Management

0196-8904 (ISSN)

Vol. 209 112641

Subject Categories

Other Environmental Engineering


Energy Systems



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3/9/2020 7