This initiative aligns with the global steel industry’s imperative to transition from traditional coal-powered blast furnaces to more sustainable Electric Arc Furnaces (EAFs).

The steel industry is a significant contributor to global CO₂ emissions, accounting for 25-30% of all global industrial CO₂ emissions. Traditional blast furnace methods rely heavily on coal, resulting in substantial carbon footprints. In contrast, EAFs, especially when powered by renewable energy and utilizing scrap steel or direct reduced iron (DRI), offer a more environmentally friendly alternative. Brazil Iron will produce HBI, which is a briquetted form of DRI that can be transported safely to customers.

The shift towards EAFs is gaining momentum globally, with 337 million tonnes per annum (mtpa) of EAF capacity under development. However, this transition presents challenges, notably a projected deficit of 109 mtpa of DRI, as highlighted by McKinsey & Company. This shortfall is particularly concerning for regions lacking sufficient renewable energy capacity to produce low-carbon DRI.

Brazil Iron’s operations in Bahia are uniquely positioned to address this challenge. With access to an almost 100% renewable electricity grid and world-class iron ore resources suitable for direct reduction, the company is set to become a key player in supplying low-carbon HBI to the global market.

During the conference, Brazil Iron presented its project to strategic partners, emphasising the importance of collaborative efforts in overcoming the looming DRI deficit and advancing the steel industry’s decarbonisation goals to meet global climate targets.