Mathematical optimization modeling for scenario analysis of integrated steelworks transitioning towards hydrogen-based reduction

To reduce carbon dioxide emissions from the steel industry, efforts are made to introduce a steelmaking route based on hydrogen reduction of iron ore instead of the commonly used coke-based reduction in a blast furnace. Changing fundamental pieces of steelworks affects the functions of most every system unit involved, and thus warrants the question of how such a transition could optimally take place over time, and no rigorous attempts have until now been made to tackle this problem mathematically. This article presents a steel plant optimization model, written as a mixed-integer non-linear programming problem, where aging blast furnaces and basic oxygen furnaces could potentially be replaced with shaft furnaces and electric arc furnaces, minimizing costs or emissions over a long-term time horizon to identify possible transition pathways. Example cases show how various parameters affect optimal investment pathways, stressing the necessity of appropriate planning tools for analyzing diverse cases.