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Integrated Assessment Models -, 30th

June - 6th July 2019

AIM/END-USE MODEL FOR SELECTING

OF LOW-CARBON TECHNOLOGY IN
INDONESIA’S IRON AND STEEL
INDUSTRY
by
Retno Gumilang Dewi , Megawati Zunita , Gissa Navira Sevie

Center for Research on Energy Policy

Chemical Engineering, Faculty of Industrial Technology
INSTITUT TEKNOLOGI BANDUNG
Indonesia’s GHG emissions GHG emissions Growth

Ggram (Kton) CO 2e
3,000,000

2,500,000
Energy
453
Forestry 2,000,000
647

1,500,000

1,000,000

500,000
Waste
Agrriculture 88
110.5 IPPU -
65 2010 2015 2020 2025 2030

GHG emissions (Mton CO2e) by source, 2010

Source: Nationally Determined Contribution Republic of Indonesia, 2010 Source: Indonesia Third National Communication, 2017

Background Method Result Conclusions 2

GHG Emissions from Energy and IPPU Sectors

Industrial process production

ENERGY
IPPU
Direct Indirect (Industrial Process and Product Use)
(2nd BUR, 2018) (2nd BUR, 2018)

Waste
16.7%
12% 13.2%
23%0% Energy IPPU
5% 70% 5%
4.8%

28% 4% 4.3%
53.8%
Energy 1% 2.7%
Aglicul- 70% 4.4%
ture
13% Limbah Agliculture
37% 12% 13% Cement Ammonia
IPPU Iron and steel Paraffin wax use
Industrial Manufacture Transportation
5% Other carbonate use Ethylene
Commercial Residence Fugitive
etc Other

1st 3rd
Manufacture industry is the largest sources of GHG emission from
The iron steel industry is one of the largest sources of GHG emission from
energy
IPPU

Background Method Result Conclusions 3

Overview Steel product

Indonesia’s
iron steel
production
process

(KRAS press, 2016)

Background Method Result Conclusions 4

 Mitigation Options in the Indonesia’s Iron and Steel
industry
BF/BOF Route Scrap/EAF-BOF DR/EAF Route
Route
Limestone Iron Ore Coal Adjusting the
Scrap production structure
EF=0.2 EF=0.56
Coke Natural
Sintering Iron Ore Increasing material
Oven Gas
efficiency with the scrap
Sinter Coke use in steel production
Direct process
EF=0.7 Reduction
(Basic oxygen furnaces
EF=1.35 Blast Furnace and Electric arc
DRI/sponge furnace)
iron
Pig Iron

Basic Oxygen Electric Arc Furnace EF=0.08

EF=1.46 Furnace

Crude Steel

Background Method Result Conclusions 5

 Mitigation Options in the Indonesia’s Iron and Steel
industry
BF-BOF Route SR/BOF Route Scrap/BOF- DR/EAF Route
EAF Route
Limestone Iron Ore Coal Scrap

EF=0.2 EF=0.56
Coke
Sintering Natural
Oven Iron Ore
Iron Gas
ore/Pellet Coal
Sinter Coke
Direct
Reduction
Smelting
EF=0.7
Reduction
EF=1.35 Blast Furnace
DRI/sponge
iron
Pig iron
Pig Iron

Promoting non-blast
Electric Arc Furnace
furnace technology
Basic Oxygen (smelting reduction)
Furnace EF=0.08
EF=1.46
Crude Steel

Background Method Result Conclusions 6

 Mitigation Options in the Indonesia’s Iron and Steel
industry
Purchase
pellet

Natural
Oil RDF Biomass Coal
gas

CO2,CO2i Iron ore CO2, CO2i

CO2, CO2i

Fuel mix Coke Sintering Pelletizing

Oven
Sinter
Fuel Utility COG Pellet
CO2

Power
CO2
generation
Stove CO2,
Coke CO2,
CO2i CO2,
Purchase CO2i CO2i
BFG SFG
electricity
Electricity
Blast Furnace
Smelting
Direct Reduction
• Maximized energy efficiency.
Reduction
Utility (BF) (SR) (DR)
by promoting low carbon
Pig iron Sponge technology
CO2, iron
CO2i CO2,
CO2i
• Substitution of fossil fuels to low
Limestone
Basic Oxygen
Scrap
Electric Arc emission fuels
Furnace (BOF) Furnace (EAF)

Crude
Slag CO2
steel

Cement Casting and

industry Rolling

Steel
product

Background Method Result Conclusions 7

 Indonesia’s iron and steel AIM/end-use energy model
industry (bottom up energy model to analyze the effectiveness
Plays an important role to achieve the target of Indonesia's of emissions mitigation on potential energy saving
commitment towards the direction of low-carbon development and carbon emission reduction)
and future climate resilience.
(Manual book AIM/end-use NIES Japan. 2006)

Modeling
Framework

Systematic workflow of AIM/end-use model

Background Method Result Conclusions 8

 Structure of AIM/end-use model in the iron steel industry
TECHNOLOG
ENERGY SERVICE
Y
• Automobile
• Coal • Dryer
• Natural gas • Blast Furnace
• Oil • Smelting Reduction • Transportation
• Biomass • Direct Reduction • Steel Product
• RDF • Basic Oxygen Furnace
• (Electricity) • Electric Arc Furnace
• Casting and Rolling
• Pump
• Boiler
• Power Generation
Flow of real
world Flow of simulation
Energy Consumption CO2 Technology
Energy Service Demand
Emission Selection

Socio-economic Scenario
Energy Database Technology Database • Population growth
• • Economic growth
Technology life time
• Energy Price • • Life style
Energy consumption
• Energy Type • • Industrial Structure
Emission factor
• Energy Constrain • Steel demand
• Share
• Emission factor • • Employment
Technology price
• Fuel availability • Service supply
(Manual book AIM/end-use NIES Japan. 2006)
• Technology availability

Background Method Result Conclusions 9

 The AIM/end-use model selects combinations
of energy technologies: Primary energy supply/energy
• Dryer demands :
• Blast Furnace (BF) 1. Coal
Service Demand (steel product):
• Smelting Reduction (SR) 2. Natural Gas
• Direct Reduction (DR) 3. Oil
1. Manufacture
• Basic Oxygen Furnace (BOF) 4. Biomass
2. Transportation
• Electric Arc Furnace (EAF)
3. Infrastructure 5. RDF
• Casting and Rolling
• Pump 6. (Electricity)
• Boiler
• Power Generation

GHG emissions in Asia (Gt CO2eq)

35

30

25

20
Socio-economic Scenario
(BAU.CM1.CM2.dan CM3) Energy Database Technology Database 15

10

• Technology life time

• Population growth • Energy Price 5
• Energy consumption
• Economic growth • Energy Type 0
• Emission factor 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
• Life style • Energy Constrain
• Share Energy demands and emissions are
• Industrial Structure • Emission factor
• Technology price determined based on scenarios
• Steel demand • Fuel availability
• Service supply
• Employment • Technology availability

Background Method Result Conclusions 10

GHG Emission Baseline and Mitigation
Scenario
Illustration of GHG emissions level
• Baseline = which is
BAU expected to occur if no

GHG Emissions level (CO2e)

mitigation actions BAU (Baseline)
(Baseline scenario)

CM 1 • Increased proportion scrap

use
CM1

(BAU+ Adjusting the in the steel making (BOF CM 2

production structure) and EAF)
CM 3

CM 2 • Maximized energy
efficiency
(CM1+ promoting low
• Promoting low carbon
carbon technology)
technology and non-blast
furnace technology
CM 3 • Switching to low
(smelting reduction)
emission fuels
Base year
(2010)
2020 Target Year
2030
(CM2+ Substitution of fossil • Increased proportion
fuels to low emission fuels) natural gas, biomass,
RDF
GHG Reduction = Baseline – Mitigation

Background Method Result Conclusions 11

Base Model
IS_CO F_DC_EXT
Note:
IS_COF_DC_CHP

COL IS_FC_COL IS_COF_CFB

BMS IS_FC_BMS MIX_COF MIX_COF IS _COF_CHB Energy

RDF IS_FC_RDF IS_COF_IGCC

IS _COF_DGT
Device
IS _COF_LG

Internal Energy/Service
IS_RDF_MG
ELY_I
RDF
IS _RDF_CFB

Final Service
IS_COL_CHP

COL IS_COL_SC
Internal Energy/Service Flow
IS_COL_USC

On-site Power IS_BMS_DC_EXT Energy/Service Flow

BMS
Generation IS_BMS_CHP

NGS
IS_DR_EXT

IS_E_EXT
IS_DR_MID

IS_E_BAT
ZS_PL IS_DR_ULC ZS_DR ZS_DR
IS_E_TDC
ELY_P IS _FC_ELY_P
IS_DR_S LR
IS_ELY COL
EL Y_I IS_FC_ELY_IS IS_DR_HIS
Direct Reduction IS_E_DCA
BMS
(DR)
Electricity Mix IS_FC_DR
IS _ELY IS_E_MC1

IS_E_SP1 ZS_EF IS_FC_EAF

COL IS_FC_COL
IS_ELY IS_EAF_SP0
ZS_SP ZS_SP IS_FC_PR ZS_EF1 ZS_SPE IS_E_EB1 IS_R_EXT
OIL IS_FC_OI L IS_EAF_SP1
IS _FUEL YSS
Scrap IS _FC_BF2 IS_E_PC1 IS_R_DS P
NGS IS_FC_NGSF
IS_FUEL
preheating Flow control to EAF IS_E_OF1 Electric Arc IS_R_TSC
IS_P_E XT
BMS IS_FC_BMS
Fuel Mix IS_ELY IS_P_G KP ZS_PD
(sponge iron, scrap, pig iron) IS_E_UP1
Furnace ZS_CS ZS_CS
IS_R_ISC

IO
(EAF) ZS_ELY
ZS_SP
IS_P_WH 1 IS_R_WH1

IS_FUEL IS_R_H D1

IS_H_PC1
ZS_PD IS _FC_PD
ZS_PL
OKS
Hot rolling
IS_H_LT1
ZS_PI IS_FC_PI and Casting
Pelletising YIO

COL

IS_FUE L
Non BF
IS_N_COR

IS_FUE L IS _C_EXT ZS_PL

Smelting
IS_N_FIN OKS
IS_ELY IS _C_CM1 ZS_CK
Reduction IS_L_EXT
ZS_ELY
MCL IS _L_LG1
IS_C_CQ1 IS_B_EXT
ZS_FUEL
IS _L_LD1 ZS_BOF IS_FC_ZS_BO F
IS_B_TGR YLM
Coke Oven IS_B_BG1
IS_FC_BPR
IS_L_DG1
YLM ZS_HM ZS_HM
Blast Oxygen ZS_SP
IS _O_EXT
IS_FC_BF1 IS_L_LT1
IS_FUE L IS _S_EXT IS_FUEL IS_B_TR1
Furnance IS_ELY IS _O_AM1 ZS _FPR

IS_ELY IS_S_DB1 IS _ELY

IS_B_TR2
Flow control to BOF (BOF) IS_ELY IS _O_HR1
ZS_BF ZS_BF
ZS_CK
IS _S_RA1 ZS_SN ZS_CK IS_B_IC1 (scrap, pig iron) Cold rolling
YIO IS_B_PF1 and Finishing
IS_S_LT 1 ZS_SN
YLM IS_B_RB1
IS_S_WH1

IS_B_NGI Blast
Sintering IS_B_CGI Furnace
(BF)

Background Method Result Conclusions 12

Technology Review
Fuel- thermalelectricity
Efficiency Capital Cost (US$ Cost Annual
No Process Technology Code in AIM/end-use Type Fuel-saving Electricity- Capital Annual
Lifetime OOMM cost Lifetime
Code in AIM/end-use consumption produced2030/t)
(toe/(%)
t) saving (toe/t) (US$ 2020/t) (US$
2030/t) cost 2020
(US$ /t)
2030/t)
(toe/ t) (toe/t)
1
40
19 Coal
COREX
flue moisture
gas waste control technology (CMC)
heat recovery IS_C_CM1
IS_N_COR
IS_L_FG1 RS 0.00406
0.54300
0.002150 0
0.0756 78.68
367.18
3.86 0.00
.0
0.10 15
30
10
Coke making
2
46
20
41 Basic Oxygen Coal, dry
Coke Stoker
Recovery
FINEX Boiler
quenching
BOF (existing)
(CDQ)
gas and sensible heat IS_C_CQ1
IS_COL_DC_EXT
IS_L_LD1
IS_N_FIN S
RS 0.03368
0.3744060
0.002197 0 1500 94.02
24.28
367.18 30 0.7700 20
10
30
3
21 Non blast
Furnace Dry
Grategas cleaning system (wet to dry)
klin IS_L_DG1
IS_P_GKP
IS_DR_MID RS 0.003344
0.00693
0.25301 0 4.68
53.22 0
0.00 15
20
42
47 Pelletizing
furnace-iron MIDREX
Coal, stoker boiler CHP IS_COL_CHP SS 51 1000 399.10 30 0.520 30
22
4 LT-PR of converter
Pellet waste gas
heat recycling IS_L_LT1
IS_P_WH1 R 0.016480
0.00196 0 0.27
1.95 0.26 15
20
43
48 making Ulcored
Coal, IGCC IS_DR_ULC
IS_COL_IGCC S 0.18988 1770 399.10 0
30.0 -4.337 30
5
23 Scrap preheating
Deep bed sintering technology IS_E_PR1
IS_S_DB1 R 0 25
0.00191 0.00525
0 8.39
0.44 0 30
10
44 SL/RN
RDF, PLTSA_MG IS_DR_SLR
IS_RDF_MG S 0.47916 5915 344.39 25.0 00 30
6
49
24 Reducing aircontrols
Automated leakage (10%) IS_S_RA1
IS_E_AC1 R
S 0.00430
0 25 0
0.00263 0.15
1.05 10
15
Sintering IS_DR_HIS 0.41010
45
7
25
Hisarna
Low
Post temperatur
RDF,combustion
PLTSA_CFB sintering IS_S_LT1
IS_E_PC1
IS_RDF_CFB RS
S 0.00836
0 0 
0.00215 2133
159.64
0.22
1.10
00
20.0 0.02
30
10
15
50 Steelmaking – Sintering waste heat recovery S 40
8
26 UHP transformer IS_S_WH1
IS_E_UP1 R
R 0.01310
0 -0.00239
0.00143 3.31
9.16 0
0.09 10
15
9 EAF Top
BMS, gas recycle
Direct BF
combustion IS_B_TGR
IS_BMS_DC_EXT S 0.02928 0 2300 79.82 0
30.0 -1.99 30
27
51 On-site Power Foamy slag practice IS_E_FS1 R
S 0 60 0.00048 11.03 15
10 Generation Recovery of blast furnace gas (BFG) IS_F_BG1
IS_E_OF1 R
R 0.00096
-0.005732 0
0.00430 0.44
4.41 0 15
28
52 Oxy
BMS,fuelCHPburners IS_BMS_CHP S 60 4040 30.0 0.4 10
11
29 (Utility) DC furnace IS_E_FG1
IS_F_TR1 R 0 0.00430
0.00263 4.304
32.33 -30 25
15
53   Top Pressure
cofiring, CHPRecovery Turbines (TRT)-wet IS_COF_DC_CHP SS 60 2500 30.0
30 Direct sheet plant IS_R_DSP -0.028300 0 199.55 0 30
12 IS_F_TR2
IS_R_TSC RS 0
0.010987 0.00396
0.00836 29.46
220.70 0 15
31 Top
thin Pressure
CFBRecovery
slab casting
cofiring, (TSC) Turbines (TRT)-dry IS_COF_CFB 1440 30.0 -0.55 25
54
13 Integrated casting and rolling (strip casting) IS_R_ISC
IS_F_IC1 S
RS 43
0.0067
0.00955 0 354.25
0.40 -22.11
0 30
15
32
Blast furnace- Improved BF control system
cofiring, CFB +CHP IS_COF_CHB
IS_R_WH1 R 0.000955 0 4260 26.07 30.0 0.30 15
55 Hot
14
33 iron rolling
makingand waste heat recovery from cooling water
Preheating of fuel and air for hot blast stove
IS_F_PF1 S 0.00597
60 2.14 0 20
56 casting
34
15 cofiring, IGCC
recuperative
Recuperator burners
on the hot blast furnace IS_R_RB1
IS_COF_IGCC
IS_F_RB1 R 0.001672
0.00717 0 2200 2.76
6.69 30.0 0 10
5
S 40
35
16 hot delivery
Injection
cofiring, and hot
natural
Digester GTcharging
gas in Blast Furnance IS_R_DC1
IS_F_NG1
IS_COF_DGT R
R 0.005493
0.00884 00 1850 0.38
6.51 0.29
30.0 -2.87 10
20
57 S 50
36 process control in hot strip mill IS_R_PC1 R 0.006688 0 18.54 0 10
17
37 cofiring,
Injection
low Landfill
of Coke
temperatur gas
Oven Gas
rolling IS_F_CG1
IS_COF_LG
IS_R_LT1 R
R 0.00860
0 35 0.00159
0.01565 1350 6.51
0.43 30.0 -2.87
0 20
20
58 S
18 Cold rolling and IS_F_PC1
IS_O_AM1 R 0.01552
0 0
0.00516 7.89
1.99 -2.15
0 20
10
38 Pulverized
Automated Coal Injection
monitoring and(PCI) 130 kg/
targeting t hM
system
finishing
39 heat recovery on annealing line IS_O_HR1 R 0.007165 0.00026 4.41 0 10

Background Method Result Conclusions 13

Potential of GHG emission reduction
 Projection of GHG Emission from Energy Category  Projection of GHG Emission from IPPU Category
40 25

20
30

GHG emissions, MtCO2e

GHG emissions, Mt CO2e

15

20

10

BA
10 BA
U
U 5
CM1
CM CM2
1

0 0
2010 2015 2020 2025 2030 2010 2015 2020 2025 2030

• GHG emissions reduction compared BAU scenario

•NoteGHG emissions reduction compared BAU scenario
Reduction Reduction
Scenario
BAU : Baseline scenario (Mt CO2e) % mitigation Scenario (Mt CO2e) % mitigation

CM1 :
CM1 7.11 19.69%
BAU + BAU+ Adjusting the production structure
CM1 4.76 19.88%
2030 CM2 16.58 45.95% 2030 CM2 5.74 23.99%
CM2 : CM1+CM3
CM1+ promoting low carbon technology47.00%
16.96 CM3 5.74 23.99%

CM3 : CM2+ Substitution of fossil fuels to low emission fuels Background Result 14
Method Conclusions
 GHG Emissions Intensity

 Projection of Steel Production (2010-2030)  Projection total GHG Emissions Intensity

12 6
11.05
2030; 5.43
5

Emission intensity, tCO2e/t steel

8 4
Steel product (M ton)

2030; 3.38
3

4 3.66 2
BAU
CM1
1 CM2
CM3

0 0
2010 2015 2020 2025 2030 2010 2015 2020 2025 2030

(Source: Indonesia’ Ministry of Industry and the United Nations Development

Program (UNDP), 2018)

Background Method Result Conclusions 15

The Effectiveness of Each Mitigation Actions in GHG Emissions
Reduction

Energy IPPU

2030 2030

2027 Scrap utilization 2027 Scrap utilization

Promotion low carbon
Promotion low carbon technology
technology
2025 2025
Subtitution to low emission
fuels

2020 2020

0 0.5 0 0.5

 Low carbon technology promotion is the main driver  Scrap utilization will obtaine the most significant
for GHG emissions reduction from energy sector. emissions reduction from IPPU sector

Background Method Result Conclusions 16

 Potential of Energy Saving
 Projection of Energy Consumption under Different Scenarios  The Effectiveness of Each Mitigation Actions in Energy Saving
10 12

2030 20.7% 21.0% 0.1%

BAU
CM1
CM2
8
Energy consumption, Mtoe

CM3 2027 17.6% 18.6% 0.1% Scrap utilization

Steel

Steel, Mt
Promotion low
5 carbon technology

2025 15.5% 17.5% 0.1% Subtitution to low

emission fuels
4

2020 10.4% 14.4% 0.0%

0 0
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30  Low carbon technology promotion is the main driver for
20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20
energy saving potential.

Background Method Result Conclusions 17

 ABATEMENT COST CURVE (0 USD/tonCO2e)
 Technology detail in ACC (0 USD/ton CO2e)
0.0
28 32
26 No Process Technology
. 1. 2. 3. 4. 5. 6.
27 EAF Foamy slag practice
29 EAF DC furnace
(20.0) 25 18 16 BF Injection natural gas in Blast Furnace
17 BF Injection of Coke Oven Gas
24 38
47 37 47 Utility Coal, CHP
(40.0)
37 Hot rolling Low temperature rolling
Abatement costs (US$/tCO2eq)

17 24 EAF Automated controls

Cold rolling and
38  Automated monitoring and targeting system
(60.0) 29 16 casting
25 EAF Post combustion
Eficient Energy Technology
18 BF Pulverized Coal Injection (PCI) 130 kg/t HM
(80.0)

28 EAF Oxy fuel burners

32 Hot rolling Integrated casting and rolling (strip casting)
26 EAF UHP transformer
(100.0) 27

(120.0)
Emissions reduction of 5.06 MtCO2e with the
Reduction quantity (MtCO2eq)

IDN CM2
IDN
investment reduction 179.24 million USD

Background Method Result Conclusions 18

  Technology detail in ACC (50 USD/ton CO2e)
No Process Technology No Process Technology
ABATEMENT COST CURVE (50 USD/tonCO2e) 27 EAF Foamy slag practice
14 BF
Preheating of fuel and air
29 EAF DC furnace for hot blast stove
50.0
Injection natural gas in EAF Scrap utilization in BOF
16 BF
21 Blast Furnace
NGS Reducing air leakage
20
50
Injection of Coke Oven 8 BF
30.0 17 BF (10%)
11
BMS31
Gas
35
52 47 Utility Coal, CHP Cold
Scarp to EAF
10 51
39 34 RDF heat recovery on annealing
10.0 22 14
37 Hot rollingLow temperature rolling 39 rolling and
6 Scrap to BOF
5 8
line
12
13 casting
.
26
32 5.
7
10. 15. 20. 25.
24 EAF Automated controls
(10.0) Hot rolling
Cold 34 recuperative burners)
18 28
rolling and  Automated monitoring and
Abatement costs (US$/tCO2eq)

38
(30.0) casting targeting system Recovery of blast furnace
24 38 25 10 BF
17
47 37
gas (BFG)
16 25 EAF Post combustion Refused derivate fuel
(50.0) RDF Fuel mix
Pulverized Coal Injection
29 18 BF
(PCI) 130 kg/t HM
51 Utility BMS, Direct combustion
(70.0) 28 EAF Oxy fuel burners
Integrated casting and 52 Utility BMS, CHP
32 Hot rolling
rolling (strip casting)
(90.0) hot delivery and hot
26 EAF UHP transformer 35 Hot rolling
charging
27
Top Pressure Recovery
12 BF BMS Fuel mix Biomass
(110.0) Turbines (TRT)-dry
7 Sintering Low temperature sintering rolling and
31 Thin slab casting (TSC)
Improved BF control casting
(130.0)
Reduction quantity (MtCO2eq)
13 BF system Top Pressure Recovery
UHP transformer 11 Fuel mix
IDN IDN
CM1 IDN
CM2 IDN
CM3 Turbines (TRT)-wet
Reducing air leakage Recovery BOF gas and
6 Sintering 20 BOF
(10%) sensible heat
Scrap utilization in BOF
BOF 50 Utility RDF, PLTSA_CFB
Emissions reduction of 20.09 MtCO2e with the
Deep bed sintering NGS Fuel mix Natural gas
5 Sintering
reduction of investment cost 38.71 million technology
21 BOF
Dry gas cleaning system
22 BOF LT-PR of converter gas (wet to dry)
USD
Background Method Result Conclusions 19
  Technology detail in ACC (0 USD/ton CO2e)
No Process Technology No Process Technology
ABATEMENT COST CURVE (250 USD/tonCO2e) 27 EAF Foamy slag practice 14 BF
Preheating of fuel and air
for hot blast stove
29 EAF DC furnace
EAF Scrap utilization in BOF
250.0 Injection natural gas in Blast
16 BF 8 BF Reducing air leakage (10%)
Furnace
17 BF Injection of Coke Oven Gas Cold
heat recovery on annealing
200.0
47 Utility Coal, CHP 39 rolling and
excluded casting
line
37 Hot rolling Low temperature rolling
24 EAF Automated controls Hot rolling
150.0
34 recuperative burners)
Cold
130 9  Automated monitoring and Recovery of blast furnace
38 rolling and 10 BF
41
targeting system gas (BFG)
36 casting
100.0
25 EAF Post combustion Refused derivate fuel
30
RDF Fuel mix
Abatement costs (US$/tCO2eq)

20
2 Pulverized Coal Injection
49 18 BF 51 Utility BMS, Direct combustion
15
(PCI) 130 kg/t HM
21
50.0 NGS 28 EAF Oxy fuel burners 52 Utility BMS, CHP
50
11 20 Integrated casting and rolling hot delivery and hot
BMS
RDF 35 31 32 Hot rolling 35 Hot rolling
22 14
Scarp to EAF 39 3410 52 (strip casting) charging
1213 6 5 8 51
0.0 3226 7 Scrap to BOF 26 EAF UHP transformer BMS Fuel mix Biomass
28
. 5. 10. 15. 20. 25.
2518 Top Pressure Recovery rolling and
24 38
12 BF 31 Thin slab casting (TSC)
47
37 Turbines (TRT)-dry casting
17
(50.0)
16 7 Sintering Low temperature sintering Top Pressure Recovery
29
11 Fuel mix
Improved BF control system Turbines (TRT)-wet
13 BF
UHP transformer Recovery BOF gas and
27 20 BOF
(100.0) sensible heat
6 Sintering Reducing air leakage (10%)
50 Utility RDF, PLTSA_CFB
BOF Scrap utilization in BOF NGS Fuel mix Natural gas
(150.0) Deep bed sintering Dry gas cleaning system
Reduction quantity (MtCO2eq) 5 Sintering 21 BOF (wet to dry)
technology
IDN CM1
IDN CM2
IDN CM3
IDN 22 BOF LT-PR of converter gas 30 Hot rolling Direct sheet plant
Recuperator on the hot blast
15 BF process control in hot strip
furnace 36 Hot rolling mill
Emissions reduction of 22.65 MtCO2e with the 49
2
Utility
Coke
RDF, PLTSA_MG
Coke dry quenching (CDQ) 41 Non-BF FINEX

addition of investment cost 258.66 million 20 BOF

Recovery BOF gas and
sensible heat
9 BF Top gas recycling BF

USD 20
Background Method Result Conclusions
 CONCLUSIONS
Based on the results of the study, it was concluded that through the use of AIM/End-use model with the assumption of
01 11.05 million tons steel production in 2030 for baseline and CM1, CM2, CM3 scenarios. The selected combinations of low
carbon technology roadmap was obtained with the potential:

Scenario
Carbon price Parameter Unit
CM1 CM2 CM3
Reduction of GHG emissions Mt CO2e - 5.06 -
0
Investment cost Million USD - -179.24 -
Reduction of GHG emissions Mt CO2e 11.87 19.7 20.09
50
Investment cost Million USD 82.53 -45.71 -38.71
Reduction of GHG emissions Mt CO2e 11.87 22.55 22.65
130
Investment cost Million USD 82.53 256.87 258.66
02 The high mitigation costs in CM2 is caused by the application of non-BF technology (smelting reduction) which is equal to
(193 million USD), but this technology provides a significant reduction in emissions opportunities of 1.71 MtCO 2e

03 Based on the effectiveness of each mitigation in the steel industry, obtained:

• Energy savings and GHG emissions reduction from energy category in steel production, mostly it depends on the
strategy focuses on the implementation of low carbon technology.
• Adjusted the production structure through increasing scrap utilization (20%) will contribute to the significant reduction
of GHG emissions in the IPPU sectors with a potential of 0.43 tons CO 2e/ton of steel in 2030.

Background Method Result Conclusions 21

References :
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(Netherlands) p 69-76
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[26] Ministry of Environment and Forest,Govt.of India 2007 Sponge Iron Industry (Delhi) p 27
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Indonesia (Bali) p 15
 Key logic: Technology selection
Service demand
(1) Recruitment of new technology to satisfy
new demand and demand for replacement
Initial cost Running cost for 3 years
A (Conventional)
New demands Recruitment
B (Advanced)
Replacement in year X+1
Technology A < Technology B
improvement
Existing or (2) Substitution or improvement
substitution of existing technology
in year X+1
Initial cost Running cost for 3 years
A (Conventional)
X X+1 X+1 Year
B (Advanced)
The least costly technology option is selected.
If Tech A ＜ Tech B ⇒ Tech A is selected Technology A < Technology B
Policy
Intervention

Lowering discount rate (i.e. extending payback time) Imposing carbon tax

Initial cost Running cost for 4 years Initial cost Running cost for 3 years
A (Conventional) A (Conventional)

B (Advanced) B (Advanced)

Technology A > Technology B Technology A > Technology B

23
Contents Key formulation: Total system cost
Role of AIM/Enduse

Topdown/Bottomup 1) Objective function of the AIM/Enduse model

Overview of Enduse Minimize Total Cost (TC) at year t
Concepts and logic

Device unit & Service

TC= Initial investment cost ($) ← it should be annualized !
+ Operating and maintenance cost ($/year)
Technology selection
+ Energy cost ($/year)
System cost
+ Payment for energy tax ($/year) Annual cost
Discount rate
+ Payment for emission tax ($/year)
Various constraints

Example output

Supplementary

Discount rate
Discount rate is used for annualizing investment cost,
but what does “discount rate” mean in the AIM/Enduse model?

24
Contents Overview
Objectives
• Basic concept of ACC tool
Overview
 Technology combination is determined to minimize “Total
How to use ACC tool
Cost (TC)” calculated based on the following equation,
“IN” file which is the same as equation used in Enduse model.
“ACC” file

“PIVOT” file
TC = Annualized initial investment cost ($)
+ Operating and maintenance cost ($/year)
Supplement
+ Energy cost ($/year)
+ Payment for emission tax ($/year)
 Abatement cost of each technology is calculated based on
the equation in the earlier slide.
 The technology 1) which satisfies minimum TC, and 2)
which has lower AC than selected carbon price will be
selected.

25
 ① 　 Calculate additional cost and emission reduction compared to the baseline technology (weighted average technology in the baseline)
Annualized tech cost, that supplies the same Additional cost GHG emission, that supplies the same Mitigation
vs base Tech vs base Tech
service per unit operation of device service per unit operation of device
Annualized Initial cost CO2 (energy-related)
O&M + energy cost Non CO2 (energy-related)
Non CO2 (non-energy-related)
Base Tech
(Stock level) CBL QBL
Tech A
(Conventional) CA CA-CBL >0 QA QBL-QA <0
Tech B
(Efficient) CB CB-CBL <0 QB QBL-QB >0
Tech C
(Advanced) CC CC-CBL >0 QC QBL-QC >0
Tech D
(Innovative) CD CD-CBL >0 QD QBL-QD>0

④ Plotting abatement cost of unit

② 　 Calculate abatement cost per unit reduction reduction along the y-axis, and GHG
of each device, and compare with carbon emission reduction of a technology l
price along the x-axis in order of ascending
Abatement cost per Carbon price
unit reduction ③ 　 Select technologies whose abatement cost of unit reduction
(t/CO2)
abatement cost is lower than
Tech A C A  CBL
(Conventional) QBL  QA
 AC A <0 <CP carbon tax 100

A batement cost

Tech
Tech
( $/tCO2-eq)
Tech B CB  CBL
If CB  CBL  C A  CBL  CC  CBL ,

Tec h
(Efficient)  ACB <0 <CP

Te ch
6
4
QBL  QB 5
Tech C CC  CBL then Tech B is selected . 0
3

(Advanced) QBL  QC
 ACC >0 <CP Cum ulative reductions
( tCO2-eq)

Tech
Tech D

Te ch
CD  CBL
(Innovative)  ACD >0 >CP 1
2
QBL  QD
Flow Control (1)
• Used for setting of Coal/Oil/Natural gas/Biomass ratio
Input Output
Stock in 2010 Life time Price (Fuel OUT1 IN1
Code Name
(device) (Year) (1000$US) Mixed) toe
toe
IS_FC_COL FC Coal 125127. 1 0 1 IS_FUEL 1 COL
COL IS_FC_COL IS_FC_OIL FC Oil 1264 1 0 1 IS_FUEL 1 OIL
IS_FC_NGS FC Natural gas 279 1 0 1 IS_FUEL 1 NGS
OIL IS_FC_OI L
IS_FUEL IS_FC_BMS FC Biomass 0 1 0 1 IS_FUEL 1 BMS
NGS IS_FC_NGSF
• Baseline Case Share
BMS IS_FC_BMS DEVICE SERVICE REGION SECTOR SERVICE SHARE (%)
◆ ◆ ◆   ◆                      
        2010 2014 2020 2030 2040 2050
        MAX MIN MAX MIN MAX MIN MAX MIN MAX MIN MAX MIN
IS_F_COL IS_FUEL IDN STL 99% 0% 99% 0% 99% 0% 99% 0% 99% 0% 99% 0%
IS_F_OIL IS_FUEL IDN STL 1% 0% 1% 0% 1% 0% 1% 0% 1% 0% 1% 0%
IS_F_NGS IS_FUEL IDN STL 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
IS_F_BMS IS_FUEL IDN STL 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

• CM3 Case Share

DEVICE SERVICE REGION SECTOR SERVICE SHARE (%)
◆ ◆ ◆   ◆                      

Substitution of fossil fuels to low  

 
 
 
 
 
 
  MAX
2010
MIN MAX
2014
MIN MAX
2020
MIN MAX
2030
MIN MAX
2040
MIN MAX
2050
MIN
emission fuels (natural gas and biomass) IS_F_COL IS_FUEL IDN STL 99% 0% 99% 0% 91% 0% 84% 0% 76% 0% 64% 0%
IS_F_OIL IS_FUEL IDN STL 1% 0% 1% 0% 1% 0% 1% 0% 1% 0% 1% 0%
IS_F_NGS IS_FUEL IDN STL 0% 0% 0% 0% 3% 0% 5% 0% 8% 0% 10% 0%
IS_F_BMS IS_FUEL IDN STL 0% 0% 0% 0% 5% 0% 10% 0% 15% 0% 25% 0%

10
Flow Control (2)

• Used for setting of Import pellet/Domestic pellet ratio

Code Name Stock in 2010 Life time Price
(device) (Year) (1000$US)
IS_FUEL IS_P_EXT IS_FC_PD Domestic pellet 0 1 0
IS_ELY IS_P_GKP ZS_PD
IS_FC_PI Import pellet 1571.22 1 0
IO IS_P_WH1

Code (Mixed Crude OUT1 (Crude Steel) IN1

ZS_PD IS_FC_PD Steel) 1000ton
ZS_PL 1000ton
ZS_PI IS_FC_PI
Pelletising IS_FC_PD 1 ZS_PL 1 ZS_PD

IS_FC_PI 1 ZS_PL 1 ZS_PI

• Baseline Case Share

DEVICE SERVICE REGION SECTOR SERVICE SHARE (%)
◆ ◆ ◆   ◆                      
        2010 2014 2020 2030 2040 2050
        MAX MIN MAX MIN MAX MIN MAX MIN MAX MIN MAX MIN
0% 0% 0% 0% 20% 0% 30% 0% 30% 0% 30% 0%
IS_FC_PD ZS_PL IDN STL
IS_FC_PIM ZS_PL IDN STL 100% 0% 100% 0% 80% 0% 70% 0% 70% 0% 70% 0%

Reduced import pellet share

11
Flow Control (3)
•• Used
Usedfor
forsetting
settingof
ofDRI/Scrap/Hot
Scrap/Hot metal
metal
ratioratio
Input Output Input Output
Stock inLife
Stock in 2010 2010time Life time
Price Price
Code
Code NameName (Mixed) OUT1 1000ton IN1
(device) (device)
(Year) (Year)
(1000$US) (1000$US)
(Mixed) OUT1 IN1
1000ton 1000ton 1000ton
ZS_DR

IS_FC_DR FC DRI into EAF 1084 1 0 1 ZS_EF1 1 ZS_DR

FC Scrap into
IS_FC_BPR 0 1 0 1 ZS_HM 1 ZS_SP
IS_FC_PR BOFinto EAF
FC Scrap 0 1 0 1 ZS_EF1 1 ZS_SP
IS_FC_DR FC Hot metal
IS_FC_BF1
IS_FC_BF2 FC Hotinto
metal 0 1 1 0 01 ZS_HM 1 ZS_BF
ZS_SP IS_FC_PR ZS_EF1 BOFinto EAF 0 1 ZS_EF1 1 ZS_BF

IS_FC_BF2

Flow control to EAF

• Baseline Case Share
(sponge iron, scrap, pig iron) DEVICE SERVICE REGION SECTOR SERVICE SHARE (%)
DEVICE SERVICE REGION SECTOR       SERVICE
  SHARE
  (%)        
◆ ◆ ◆ ◆  
◆   ◆   ◆       ◆    
2010    
2020    
2030    
2040    
2050  
                2010 MAX MIN2014 MAX 2020
MIN MAX 2030
MIN MAX 2040
MIN MAX 2050
MIN
  IS_FC_DR   ZS_EF1   IDN  STL MAX MIN63% MAX 0% MIN 0% MAX 0% MIN 0% MAX 0% MIN 0% MAX 0% MIN 0% MAX 0% MIN
IS_FC_BF
IS_FC_PR ZS_HM ZS_EF1 IDN STL
• Used for setting of 0% 0% 100% 100% 100% 0% 100% 0% 100%
0% 0%0% 100%0% 0%
IS_FC_BPR
IDN
IDNScrap/Hot
IS_FC_HMZS_HM ZS_EF1 IDN
STL
STL
STL 0% metal
37%
0%
0% ratio
0%
0%
0%
0%
0%
100%
0%
0%
0%
0%
0%
100%
0%
0%
0% 0%
100%
0%
0%
0% 0%
100% 0%0% 0%

• CM1 Case Share

DEVICE DEVICE SERVICE
SERVICE REGION SECTOR
REGION SECTOR SERVICE SHARE
SERVICE SHARE(%)(%)
◆ ◆ ◆ ◆ ◆ ◆     ◆◆                                       
                2010
2010 2014 2020
2020 20302030 20402040 2050 2050
                MAX
MAX MINMIN MAX
MAX MIN
MIN MAX MIN
MAX MIN MAX MAX MINMIN MAXMAXMIN MINMAX MAX MIN MIN
IS_FC_BPR IS_FC_BF
IS_FC_DR ZS_HM
ZS_EF1 IDN IDN STLSTL 100%
63% 0% 100%
0% 0% 0%
0% 95%
0% 0%0% 0%90% 0% 0% 0% 85% 0% 0%0% 80%0% 0%
ZS_HM
IS_FC_BPR ZS_HM IDN STL 0%
37% 0% 0%
0% 100% 0%
0% 5%5% 0% 0% 10%10% 0% 0% 15% 15% 0% 0%
20% 20%0% 0%
IS_FC_BF1
IS_FC_PR ZS_EF1 IDN STL
Flow control to BOF IS_FC_HM ZS_EF1 IDN STL 0% 0% 0% 0% 95% 0% 90% 0% 85% 0% 80% 0%
ZS_BF (scrap, pig iron)

Increasing
Increasingscrap
scrapuse
useinto
intoElectric
Basic
Oxygen
Arc Furnace
Furnace
(EAF)
(EAF)
Flow Control (4)

• Used for setting of EAF/BOF ratio

IS_E_EXT Code Name Stock in 2010 Life time Price
IS_E_BAT (device) (Year) (1000$US)
IS_E_TDC
Crude steel from
IS_FC_EAF 0 1 0
IS_E_DCA EAF
IS_ELY IS_E_MC1
Crude steel from
IS_FC_BOF 1707 1 0
IS_E_SP1 ZS_EF IS_FC_EAF BOF
ZS_SPE IS_E_EB1

IS_E_PC1
Code (Mixed Crude OUT1 (Crude Steel) IN1
IS_E_OF1 Steel) 1000ton
Electric Arc
IS_E_UP1
Furnace (EAF)
ZS_CS
1000ton

IS_S_BOF 1 ZS_CS 1 ZS_EF

IS_S_EF 1 ZS_CS 1 ZS_BOF

• Baseline Case Share

OKS DEVICE SERVICE REGION SECTOR SERVICE SHARE (%)
IS_L_EXT
◆ ◆ ◆   ◆                  
ZS_ELY
IS_L_LG1
        2010 2020 2030 2040 2050
ZS_FUEL         MAX MIN MAX MIN MAX MIN MAX MIN MAX MIN
IS_L_LD1 ZS_BOF IS_FC_ZS_BOF
YLM IS_FC_BOF ZS_CS IDN STL 0% 0% 71% 0% 71% 0% 68% 0% 60% 0%
ZS_HM
IS_L_DG1 IS_FC_EAF ZS_CS IDN STL 100% 0% 29% 0% 29% 0% 32% 0% 40% 0%
IS_L_LT1 Blast Oxygen
Furnance (BOF)

13
Implemented Energy Efficient Technology in AIM/end-use model (5)
YLM
ZS_CK IS_B_EXT IS_B_EXT
IS_B_BG0
ZS_SN ZS_BF1 ZS_BF1 ZS_BF2
IS_B_TGR Technology Retrofit IS_B_TGR
IS_ELY IS_B_BG1
Top gas recycle BF Explicit
YLM
type IS_B_BG1
IS_Fuel IS_Fuel
BFG recovery
Technology substitution IS_B_TR1
IS_FUEL
Implicit type
IS_B_TR0
IS_B_TR2
IS_B_IC0 IS_ELY
ZS_BF2 ZS_BF4
IS_B_TR1 ZS_BF3 ZS_BF3 ZS_BF
ZS_CK IS_B_IC1
IS_B_IC1
ELY IS_B_TR2
IS_Fuel Note: IS_B_PF1
Improved BF ZS_SN
Top pressure – 0: without energy saving equipment
control system
recovery turbine – 1:with energy savingIS_B_RB1
equipment
– IS_Fuel is from Fuel process
IS_B_NGI
– ZS_CK is from Cokes oven process
– ZS_SN is from Sintering process
IS_B_CGI Blast Furnace
IS_B_PF0 IS_B_RB0 – Red colored = minus input
ZS_BF4 ZS_BF5 ZS_BF5 ZS_BF6 (BF)
IS_B_PF1 IS_B_RB1
IS_Fuel IS_Fuel
Preheating of fuel Recuperator

IS_B_NG0 IS_B_CG0 IS_B_CG0

ZS_BF6 ZS_BF7 ZS_BF7 ZS_BF8 ZS_BF8 ZS_BF9 To steel making
process
IS_B_NG1 IS_B_CG1 IS_B_CG1
IS_Fuel

14
IS_Fuel IS_Fuel
Injection natural Injection of Coke Pulverized Coal
gas ELY Oven Gas Injection