BHP and Steelmakers Form Industry-Led CCUS Hub Consortium

Industry Consortium Forms to Study CCUS Hubs in Asia

A groundbreaking industry consortium has formed to assess the development of carbon capture, utilization, and storage (CCUS) hubs across Asia. This first-of-its-kind independent industry-led study will examine both technical and commercial pathways for implementing CCUS in hard-to-abate industries throughout the region, focusing particularly on steel production.

The initiative brings together major global steelmakers and value chain players in a collaborative effort to address one of the most challenging aspects of industrial decarbonization. By working together, these companies aim to leverage shared infrastructure and economies of scale to make CCUS implementation more economically viable across multiple industrial sites.

Key Consortium Members

The consortium brings together major players from across the steel value chain:

• Steel Companies: ArcelorMittal Nippon Steel India, JSW Steel, and Hyundai Steel Company
• Resource and Energy Companies: BHP, Chevron, and Mitsui & Co
• Technical Advisors: Hatch (project management officer), Global CCS Institute, McDaniel, and Pace CCS

This diverse membership ensures the study will benefit from expertise across the entire steel production value chain, from raw material suppliers to steelmakers themselves.

The Scale of Steel's Decarbonization Challenge

The steel industry faces unique decarbonization challenges due to its carbon-intensive production processes. Traditional steelmaking, particularly through the blast furnace-basic oxygen furnace route, is highly energy-intensive and relies heavily on coal as both a fuel and reducing agent.

According to Ben Ellis, BHP Vice President of Marketing Sustainability, "With more than one-billion tonnes of production a year in Asia coming from blast furnace capacity that is relatively early in its production life, it is important for industry to progress technologies to decarbonise existing steelmaking assets while new commercial pathways to decarbonise steelmaking are developed over time."

This statement highlights a critical aspect of the challenge: much of Asia's steel production capacity is relatively new, making premature replacement economically unfeasible. Therefore, finding ways to reduce emissions from existing assets becomes paramount.

Carbon Footprint of Steel Production

Steel production contributes approximately 7-9% of global CO₂ emissions, making it one of the largest industrial sources of carbon emissions worldwide. The industry's reliance on coal for both energy and as a reducing agent in ironmaking creates a significant carbon footprint:

• A typical integrated steel mill may produce 1.8-2.0 tonnes of CO₂ per tonne of steel produced
• The global steel industry produces approximately 1.8 billion tonnes of steel annually
• This results in roughly 3.3-3.6 billion tonnes of CO₂ emissions per year

Note: These figures represent industry averages and may vary based on specific production processes, energy sources, and efficiency measures at individual facilities.

CCUS as a Critical Transition Technology

CCUS technology offers a pathway to significantly reduce emissions from existing steelmaking infrastructure while the industry develops and scales new commercial pathways to low-carbon steelmaking.

"By leveraging shared knowledge and resources with our partners, we are investing in support for innovative solutions – like the potential of CCUS – that we see as an essential part of decarbonising hard-to-abate sectors such as steelmaking," explains Ellis from BHP.

This approach provides several advantages for the steel industry:

• Immediate emissions reduction from existing assets without requiring complete facility replacement
• Extension of useful life for relatively new infrastructure, preventing stranded assets
• Providing critical time for development and scaling of next-generation steelmaking technologies
• Maintaining production capacity while reducing environmental impact

CCUS represents an important bridge technology that can deliver significant emissions reductions while longer-term solutions such as hydrogen-based steelmaking or electric arc furnaces powered by renewable energy solutions reach commercial scale.

The Scope and Timeline of the CCUS Hub Study

The prefeasibility study initiated by the consortium has an ambitious scope aimed at developing practical implementation strategies for CCUS across multiple industrial hubs in Asia.

Study Objectives and Deliverables

The comprehensive prefeasibility assessment will:

• Focus on potential applications for captured CO₂ in industrial processes
• Explore transport options via pipeline or shipping to storage sites in Asia or northern Australia
• Deliver conceptual development strategies for each hub
• Provide detailed cost and schedule estimates
• Outline potential commercialization pathways
• Conclude by the end of 2026

Each consortium participant will be included in at least one hub assessment, ensuring broad representation across different geographic and industrial contexts.

Hub Development Approach

The study emphasizes the importance of shared infrastructure and economies of scale to make CCUS implementation economically viable. This collaborative approach recognizes that individual facilities often struggle to justify standalone CCUS investments due to high capital costs and infrastructure requirements.

By developing regional hubs that serve multiple industrial facilities, the consortium hopes to:

1. Reduce per-facility capital expenditure
2. Create more efficient transport and storage networks
3. Achieve better economies of scale in CO₂ handling
4. Distribute risks and costs across multiple stakeholders
5. Create more attractive investment opportunities

Addressing Regulatory and Policy Frameworks

Beyond the technical aspects of CCUS implementation, the study will examine critical non-technical enablers required to make CCUS hubs operational.

Regulatory Framework Assessment

The consortium will conduct detailed assessments of:

• Existing regulatory frameworks within each target region
• Inter-regional CCUS policy compatibility
• Cross-border transport regulations and requirements
• Permitting processes for CO₂ transport and storage
• Potential policy incentives needed to support investment

These assessments are crucial as regulatory uncertainty remains one of the primary barriers to widespread CCUS deployment. Clear, consistent regulatory frameworks are needed to provide investors with confidence in long-term CCUS projects.

Knowledge Sharing Commitment

In a significant move that underscores the collaborative nature of the initiative, the consortium has committed to sharing findings publicly to:

• Promote broader industry learning
• Support the development of enabling policy frameworks
• Accelerate regulatory development
• Create a foundation for future collaboration

This commitment to knowledge sharing could significantly accelerate CCUS adoption across the region by reducing duplication of efforts and creating standardized approaches to common challenges.

What Sets This CCUS Initiative Apart

This prefeasibility study represents a significant departure from previous CCUS initiatives in several important ways.

Industry-Led Approach

Unlike previous studies that may have been led by governments or research institutions, this initiative brings together actual industry stakeholders who would implement and utilize the technology. This industry-led approach ensures that:

• The study addresses practical implementation challenges
• Economic considerations remain central to all assessments
• Solutions proposed are commercially viable
• Findings have direct pathways to implementation

The consortium represents the first independent, industry-led CCUS hub assessment in Asia, bringing together companies that would be direct beneficiaries and users of the technology.

Open Consortium Structure

The consortium remains open to additional members joining and contributing to the study, creating opportunities for broader industry participation and more comprehensive hub assessments. This inclusive approach recognizes that successful CCUS deployment requires participation from diverse stakeholders across industrial sectors.

The Economic Case for CCUS Hubs

The consortium's focus on hub development rather than individual facility deployment reflects the economic realities of CCUS implementation.

Shared Infrastructure Benefits

CCUS hubs offer several economic advantages over isolated facility deployments:

• Reduced Capital Costs: Shared transport and storage infrastructure spreads capital expenditure across multiple users
• Operational Efficiencies: Centralized operation and maintenance of capture, transport, and storage systems
• Risk Mitigation: Distributed investment and operational risks across multiple stakeholders
• Utilization Opportunities: Greater volumes of captured CO₂ create more viable utilization pathways
• Improved Financing Options: Larger, multi-stakeholder projects may attract different financing mechanisms

Commercialization Pathways

The study will explore potential revenue streams from CO₂ utilization, which could include:

These utilization pathways represent potential revenue streams that could improve the overall economics of CCUS deployment.

Environmental Impact and Climate Goals

The development of CCUS hubs across Asia could have significant environmental benefits, particularly in supporting climate action goals.

Emissions Reduction Potential

With proper implementation, CCUS has the potential to capture millions of tonnes of CO₂ annually from steel production facilities:

• Modern capture technologies can achieve 90%+ capture rates from concentrated CO₂ streams
• A typical integrated steel mill producing 5 million tonnes of steel annually could potentially capture 4-8 million tonnes of CO₂ per year
• Across multiple facilities in a hub arrangement, total capture volumes could reach tens of millions of tonnes annually

Supporting Regional Climate Commitments

By enabling significant emissions reductions from existing industrial infrastructure, CCUS hubs support:

• National determined contributions (NDCs) under the Paris Agreement
• Corporate net-zero commitments of participating companies
• Regional decarbonization roadmaps
• Just transition strategies that preserve industrial jobs while reducing environmental impacts

Disclaimer: The actual emissions reduction potential will depend on specific technologies deployed, capture rates achieved, and the number of facilities connected to each hub. Estimated figures are based on industry averages and may vary in practice.

Carbon Capture Implementation in Steel Production

Understanding how carbon capture works in steel production provides important context for the consortium's initiative.

Capture Points in Steelmaking

In integrated steel mills, several processes produce concentrated CO₂ streams suitable for capture:

1. Blast Furnace Gas: Contains approximately 20-25% CO₂ along with carbon monoxide, hydrogen, and nitrogen
2. Basic Oxygen Furnace Gas: Contains around 10-15% CO₂ and has high heat value
3. Coke Oven Gas: Contains roughly 5-7% CO₂ along with hydrogen, methane, and other compounds
4. Sinter Plant Emissions: Contains 5-10% CO₂ and various particulates

Each of these streams presents different capture challenges and opportunities, with blast furnace gas typically offering the highest concentration of CO₂ and thus being the most economical capture point.

Capture Technologies

Several capture technologies could be deployed in steel facilities:

• Amine Scrubbing: Well-established technology using chemical solvents to absorb CO₂
• Pressure Swing Adsorption: Uses solid adsorbents to separate CO₂ from gas mixtures
• Membrane Separation: Uses selective membranes to separate CO₂ from other gases
• Cryogenic Separation: Uses low temperatures to separate gases based on different condensation points

The selection of specific technologies will depend on factors including gas composition, capture volume requirements, energy availability, and space constraints at each facility.

Challenges and Opportunities Ahead

While the consortium's initiative represents an important step forward, several challenges must be addressed to make CCUS hubs a reality in Asia.

Implementation Challenges

Key hurdles for CCUS implementation include:

• High Capital Costs: Initial investment for capture equipment, pipelines, and storage infrastructure
• Energy Requirements: Additional energy needed for capture processes, compression, and transport
• Storage Site Characterization: Identifying and validating suitable geological storage locations
• Regulatory Frameworks: Developing consistent policies across jurisdictions
• Public Acceptance: Addressing community concerns about CO₂ transport and storage safety

Future Opportunities

Despite these challenges, CCUS hubs present significant opportunities:

• Technology Transfer: Lessons learned can be applied to other hard-to-abate sectors
• Job Creation: Development and operation of CCUS infrastructure creates new employment opportunities
• Industrial Competitiveness: Early adopters may gain advantages in carbon-constrained markets
• Innovation Catalyst: CCUS deployment could accelerate related clean technology development
• Regional Leadership: Successful implementation could position Asia as a leader in industrial decarbonization

The Path Forward for CCUS in Steelmaking

The BHP and steelmaker-led consortium studying CCUS hubs represents an important step forward in addressing one of the most challenging aspects of industrial decarbonization. By bringing together key stakeholders from across the steel value chain, the initiative has the potential to accelerate CCUS deployment and create practical pathways for emissions reduction in hard-to-abate sectors.

As the study progresses toward its conclusion in 2026, its findings will provide valuable insights not only for the participating companies but for the broader industrial community seeking solutions to the climate challenge. The consortium's commitment to public knowledge sharing further amplifies the potential impact of this groundbreaking initiative.

While CCUS is not a silver bullet for industrial decarbonization, it represents an essential component of a comprehensive strategy to reduce emissions while maintaining industrial production and economic growth. Furthermore, as iron ore trends evolve and the energy transition accelerates, solutions like CCUS will play an increasingly vital role in mining decarbonisation efforts alongside mining electrification initiatives. The collaborative approach exemplified by this consortium provides a model for how industries can work together to address shared challenges in the transition to a low-carbon future.

Disclaimer: This article contains forward-looking statements about the potential of CCUS technology and the outcomes of the consortium's study. Actual results may vary based on technological developments, regulatory changes, economic factors, and other variables that may impact implementation feasibility.

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