IMPACT

Transforming Steelmaking with Sustainable Sponge Iron

Global production of Direct Reduced Iron (DRI) and Hot Briquetted Iron (HBI) exceeded 119 million tonnes in 2021 and continues to grow rapidly as the steel industry accelerates its transition toward low-carbon production routes. In Europe, numerous investments are underway to support decarbonization objectives, with announced DRI/HBI capacities expected to reach 40–50 million tonnes per year by 2035.

The Bio Sponge Iron (BSI) technology offers a breakthrough alternative to conventional DRI production by replacing fossil-based reducing agents with biochar, eliminating the dependence on costly hydrogen-based pathways while maintaining a strong decarbonization potential. This innovative approach enables the production of high-quality sponge iron through a sustainable and economically viable process. As the steel industry progressively shifts from the traditional Blast Furnace–Basic Oxygen Furnace (BF-BOF) route toward Electric Arc Furnace (EAF) steelmaking, demand for low-carbon iron units is expected to increase significantly. Once the BSI industrial pilot plant becomes operational, biochar-based sponge iron production has the potential to expand rapidly, supporting the growing need for sustainable metallic feedstocks.

Supporting Circularity and Resource Efficiency

BSI technology not only reduces carbon emissions but also contributes to a more circular steel value chain. By valorising organic residues and converting them into high-performance biocarbon, the process enhances resource efficiency while supporting recycling initiatives.

Furthermore, sponge iron produced through the BSI process helps address one of the key challenges facing EAF steelmaking: the limited availability and variable quality of steel scrap. By supplementing scrap with high-purity sponge iron, steel producers can maintain product quality while increasing the use of recycled materials.

Enabling High-Quality Steel Production

Unlike recycled scrap, which may contain unwanted residual elements such as copper, tin, chromium, or molybdenum, sponge iron produced from virgin iron ore offers a clean metallic charge. This allows steelmakers to dilute tramp elements present in scrap and manufacture high-quality steel grades with enhanced mechanical properties, including the ductility required for demanding applications such as deep drawing and advanced forming processes.

By combining carbon-neutral feedstocks, circular economy principles, and high-quality iron production, BSI represents a key enabling technology for the next generation of sustainable steelmaking.

Environmental Impact and Socio-Economic Benefits

The Bio Sponge Iron (BSI) technology is more than a breakthrough for low-carbon steelmaking—it is a catalyst for a new circular economy built around sustainable biomass resources.

Today, biochar production is constrained by the lack of a stable, large-scale industrial market. BSI changes this by creating a strong and long-term demand for biochar as a renewable carbon source for steel production. Producing 10 million tonnes of sponge iron per year would require around 3.2 million tonnes of biochar, generated from approximately 12 million tonnes of biomass residues. This emerging value chain could create up to 15,000 new jobs in biomass collection, recovery, processing, and logistics, offering new economic opportunities for rural and industrial communities.

Turning Waste into Value

Europe generates substantial quantities of agricultural and forestry residues that remain underutilized. BSI converts these residual materials into renewable biocarbon without competing with higher-value uses such as timber, panel production, or food supply.

Strengthening Circularity

By recovering biomass that would otherwise be wasted or used inefficiently, BSI reinforces circular economy principles, reduces resource losses, and increases value creation across agricultural and forest supply chains.

Benefits Beyond Decarbonization

The impact extends beyond steel production. Utilizing woody residues can improve land and waterway management, reducing biomass accumulation in vulnerable areas and helping mitigate flood and hydrogeological risks.

BSI connects sustainable biomass management, green job creation, and low-carbon steel production—turning waste into value and accelerating the transition to a more circular and climate-neutral economy.

Empowering People for Green Steel

The transition to climate-neutral steelmaking is not only about new technologies—it is also about new skills. BSI will help equip professionals with expertise in sponge iron production, recycling, digital processes, and sustainable biomass management through dedicated workshops and training activities involving industry, academia, and policymakers.

Creating Opportunities Across Europe

BSI will support the development of regional biomass hubs, helping local businesses and SMEs transform agricultural and forestry residues into valuable resources while reducing transport emissions and strengthening local economies.

Driving the Transition Forward

To accelerate the adoption of biochar-based steelmaking, BSI will work closely with policymakers, industry associations, and standardization bodies to promote clear regulations and a supportive market framework.

By combining innovation, skills development, and regional collaboration, BSI is helping build a greener, more competitive, and more resilient European steel industry.