UK Pact – Energy Transition and Industrial Descarbonization in Brazil – Support the Steel Industry to Achieve Sectoral Mitigation Goals

The CarbSteeler Model is a mathematical cost optimization model to evaluate the distinct decarbonization pathways for the Brazilian steel industry. It integrates local resources and factors—encompassing technologies, processes, and economic aspects, such as economies of scale and potential synergies with other industries via resource sharing in geographical clusters. The main resources analyzed include biomass, biochar, biomethane, hydrogen, natural gas, coke, electricity, scrap, iron ore, and water. The processes covered in the model include the production of green hydrogen, biochar, pig iron, hot briquetted iron (HBI), and steel, by both Electric Arc Furnace (EAF) and Basic Oxygen Furnace (BOF). The model operates under constraints such as energy and mass balances between processes, regulatory requirements (including green certification), annual steel production volumes to simulate current and future scenarios, and an annual emissions budget. These constraints ensure that the model considers operational and regulatory realities. The objective function and constraints of the model are flexible, allowing, for example, to maximize low-carbon steel production within an established emissions budget, or to minimize emissions for a specific steel production demand. Additionally, the model includes investment and Operation and Maintenance (O&M) costs, adjusted according to scale.