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Turkey Green Growth Policy Paper: Towards a Greener Economy

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4.3 Iron and Steel

Situation analysis

The iron and steel industry is the largest industrial emitter of CO2 in the world, with global emissions of about 2.8 Gt a year. Two production technologies are widely used in the industry: integrated steel plants (ISP) comprised of blast furnaces and basic oxygen furnaces, and electric arc furnaces (EAF). While ISP processes use coke to reduce iron ore in blast furnaces, the EAF process primarily uses scrap metal (melted through high electric voltage), or Direct Reduced Iron, produced with coal or gas, as a substitute for scrap.
About 85% of the industry’s CO2 emissions derive directly from the process and fuel combustion in primary steelmaking, which emits around 1.6-2.2 tCO2 per ton of steel (excluding coke/sinter-making); the remaining 15% results from indirect emissions, mainly electricity consumption in EAF production. In addition, steel making is also a major source of solid and hazardous waste, water pollution, and noise.
With some 30 million tons in 2010, Turkey ranks 10th in the world and 2nd in Europe in terms of total steel output. Its production has almost doubled since 2001 (second fastest increase behind China) and is expected to top 35 million tons, $16 billion in exports, and $3.4 billion in net export balance in 2012. With continued strong domestic and international demand, the sector could reach 70 million tons of steel annually by 2023. On the other hand, the Turkish iron and steel industry is one of the largest scrap importers in the World. In 2010, Turkey’s share in total scrap imports was 18%, with 19.2 million tons (mostly from The EU, Russia, USA and the Ukraine) worth US$ 7.1 billion (15% of the country’s current account deficit).

Despite the sector’s heavy footprint globally, Turkey’s steel production is considered much greener because 80% of its total production capacity (42.7 million tons in 2010) uses EAF technology while the rest is in dirtier, less energy- efficient ISP technology.

Sector potential

The industry has made important strides in reducing energy use (Box 4.3). Yet, the sector has potential for further greening through reducing carbon emissions in the production process (especially ISP), and reducing the intensity of other pollutants (e.g., heavy metals). Moreover, the sector’s heavy dependence on the importing of scrap metal holds further greening potential through the substitution of local sources, support for the emergence of small metal recycling enterprises, and additional employment.

Table 4.2 Main Features of Iron & Steel Technology

Prod Share


Energy use

Energy cost

in total cost


Technology enhancements/ greening already achieved

EAF Electric Arc Furnace


Scrap metal (75-80%) imported (EU, USA, Russia, Ukraine)

- Electricity: 65%

- Natural gas: 30%

- Diesel: 5%


Lower CO2 emissions


- Dust (PM10)

- CO2

- NOx

- Heavy metals

- Organics

- Toxics (dioxins/furans


Higher CO2 emissions

Over 2000-2008:

+15%/yr production

-1.3% energy use

Box 4.3 Energy Efficiency Improvements in ISP
Since the 1990s, ISPs have implemented substantial EE improvements to increase competitiveness, as continuous efficiency gains are essential for these plants to maintain international competitiveness, even for the better-performing Erdemir.

(i) Erdemir initiated an EE improvement plan that included investments in furnaces, boilers, waste heat recovery, utilizing by-product gas, continuous casting, and fuel systems, which reduced energy consumption from 0.67 toe per ton of carbon steel (tcs) to 0.51 toe/tcs by 2004. This was comparable with the best practice level of 0.53 toe/tcs reported in the 1990s (when the investment plans were initiated). However, by 2004, leading ISPs achieved levels of 0.33 toe/tcs. In 2005, Erdemir announced plans for energy and environment investments totaling US$106 million during 2005-14.

(ii) The energy consumption rates of Isdemir and Kardemir have long been substantially higher than the global average. Isdemir has since made some EE improvements that reduced the energy consumption rate by 23 percent. In 2005, Isdemir was involved in a three-year program of energy and environment investments totaling US$ 80 million. Employee-owned and -operated Kardemir also improved its performance, but by 2004, had only reached the level Erdemir had achieved in 1990. Since then, Kardemir is utilizing a more EE process (moving from an Open Hearth Furnace process to a Basic Oxygen Furnace process) and is looking into gas recovery for energy utilization and carbon emissions reduction.

Source: World Bank (2011)

ISP Integrated Steel Plants


Iron ore and coke (coal)

- Coal: 75%

- Electricity: 10%

- Natural gas: 15%


Over 2000-2008:

+5%/yr prodion

-3% energy use
Switch from Open Hearth Furnace (OHF) to Basic Oxygen Furnace (BOF)

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