The writing on the wall for coking coal

Here ("Coal's last hope"), I talked about the crisis facing thermal coal, the kind used in power stations.  But coking (or metallurgical) coal, used to manufacture steel, also faces a potential crisis.

Via Kobad Bhavnagri of BNEF.

New research by @BloombergNEF  shows renewable hydrogen has the potential to cut emissions from steel making in half and hobble the market for coking coal at a carbon price less than $50/t by 2050. [The European carbon price is currently US$28.50/t]  

It is technically viable to decarbonize the entire steel making sector at a carbon price of just US$35-50/t CO2 by 2050 using hydrogen technologies. This would eliminate 7% of global greenhouse gas emissions.

A complete displacement of coal- and gas-based steel making is unlikely by 2050 due to the difficulty of writing down assets, but between 10-50% of global steel production could be from hydrogen if carbon pricing is widespread.

Hydrogen-based steel could first become competitive with coal-based production (without a carbon price) by 2030, where coking coal is $310/t. As hydrogen prices fall, it becomes competitive with coking coal at $200/t.

The technology to make fossil-free steel is already currently operating in many parts of the world. New plants can be constructed using Direct Reduction technology, first operate with natural gas and then transition to hydrogen once economics/policy allow.

The potential for hydrogen to displace coking coal at surprisingly low carbon prices should give investors serious pause for thought. Metallurgical coal is not immune from the changes sweeping the energy sector; hydrogen extends the reach of renewables into its front-yard.

I think the obvious symptoms of a climate emergency (drought, heatwaves, floods, hurricanes) will make the political imperative to do something about carbon emissions an irresistible force.  We have to reduce CO₂ and methane emissions to zero by 2050.  And the most practical way to encourage that is to introduce a price for carbon, which starts out low and rises steadily over time.  Countries or regions which already have a carbon price, and are making an effort to cut emissions, will not allow other countries to free-ride on their efforts.   The best recent example of this is the EU postponing ratification of a trade agreement with Mercosur, because of Brazil's burning of its Amazon rain forest.   The pressure is on, and carbon prices across the world will just get higher over time.  This spells the end not just of thermal coal but metallurgical coal too.

That leaves cement production, air travel, sea transport and, the elephant in the room, emissions from agriculture.  But does anyone think these sectors will be let off as the level of CO₂ in the atmosphere steadily rises and the climate emergency worsens?

[See also Iron and steel without fossil fuels]