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Glossary · Energy industry & energy transition

Electric Arc Furnace

Electric Arc Furnace EAF steel Industry electricity Decarbonization

Electric Arc Furnace, abbreviated EAF, is the English term for the electric arc furnace (German: Elektrolichtbogenofen), a melting unit used in steelmaking. In the furnace, electric arcs burn between graphite electrodes and the metallic charge or the liquid metal bath. In the widely used three-phase AC furnace, three electrodes are usually employed. In DC furnaces, a single electrode in the roof usually faces a counter-electrode in the furnace bottom. The arcs reach several thousand degrees Celsius and melt steel scrap, direct reduced iron (DRI) or hot briquetted iron (HBI) into liquid crude steel.

An EAF is a type of furnace and not a climate technology in itself. How climate-friendly it is depends on three things: the input material, the origin of the electricity and the auxiliary materials. The emissions of the upstream and downstream steps must also be added. The furnace only provides liquid steel. The actual steel grade is only created in the subsequent steps: secondary metallurgy in the ladle furnace, where applicable vacuum degassing, then continuous casting and rolling.

Technical function and energy demand

A melting cycle ("charge" or "heat") runs roughly as follows: scrap baskets are charged, the electrodes strike the arcs, and the material melts. The bath is then refined with oxygen and a foamy slag is produced that shields the arc. At the end, the steel is tapped into a ladle. Besides electricity, oxygen, natural gas burners, injected carbon and the post-combustion of off-gases also supply chemical energy. The EAF is therefore not a purely electrical process, even though electricity supplies most of the energy.

Specific electricity consumption can be quantified more precisely than just “a few hundred kilowatt hours”. According to a technical publication, modern EAFs need on average about 400 to 500 kWh of electricity per tonne of steel, in addition to burners and oxygen. The exact figure depends, among other things, on the scrap grade, charging and interruptions to operation. One technical account gives about 400 to 435 kWh per tonne of liquid steel for pure cold scrap with good foamy slag. As the DRI share increases, demand rises roughly linearly. At almost 100 per cent DRI, around 635 kWh per tonne is cited. The reason is the residual oxides in the sponge iron, which first have to be reduced, and the larger quantity of slag. The exact value also depends on the degree of metallisation and the gangue content of the DRI.

A worked example makes the order of magnitude tangible: a heat of 150 tonnes at around 400 kWh per tonne needs about 60 megawatt hours. If this amount of energy is supplied in roughly one hour of power-on time, the result is an average power of about 60 megawatts. Large furnaces have transformer ratings ranging from several tens to more than a hundred megavolt-amperes. For the grid, therefore, what matters is not only the annual energy consumption but also how strongly the load is concentrated in time.

The arc is a very unsteady load, especially while the scrap is still solid. Current and voltage fluctuate strongly. This causes flicker, harmonics and a fluctuating demand for reactive power. To counter these grid disturbances, electric steel plants are usually connected at high or extra-high voltage. Compensation equipment such as static var compensators or STATCOMs and filter circuits are often added. For a grid connection, the grid operator therefore examines the connected load, the short-circuit power at the point of common coupling and power quality.

Distinction from blast furnace, direct reduction and induction furnace

The blast furnace reduces iron ore with coke to liquid pig iron. The pig iron is then processed into steel in the basic oxygen converter (oxygen steel). The EAF, by contrast, does not reduce ore but melts iron or steel that is already metallic. It can use scrap directly. For ore, it needs an upstream reduction step.

This step is performed, for example, by direct reduction. Iron ore is reduced in the solid state to sponge iron using natural gas, hydrogen-rich gas or, in future, largely pure hydrogen. The DRI can be passed on hot or pressed into HBI. When hydrogen-based green steel is mentioned, it therefore usually refers to the combination of direct reduction and EAF, not to the furnace alone.

The induction furnace heats metal by electromagnetic induction and is common above all in foundries. It can hardly refine metallurgically, and slag plays only a minor role there. The EAF, by contrast, is designed for large quantities, varying input materials and refining. In statistics, “electric steel” means steel from the electric furnace. The term alone says nothing about the carbon footprint.

Significance for decarbonisation and the circular economy

The EAF opens up two paths. First, it is the central large-scale plant for steel recycling and thus a building block of the circular economy: scrap replaces primary ore and carbon-intensive pig iron production. Second, in combination with direct reduction, it enables a primary steel route without coke. This shifts energy demand from coal to electricity and hydrogen, that is, towards the electrification of industry.

According to the German Steel Federation (Wirtschaftsvereinigung Stahl), 34.1 million tonnes of crude steel were produced in Germany in 2025. Of this, around 10.4 million tonnes came from electric furnaces, or about 30 per cent. Electric steel production fell by 3.5 per cent, oxygen steel production by 10.7 per cent.

EAF steel is not automatically climate-neutral. Part of the emissions shifts to electricity generation, hydrogen production, intermediate products, electrode consumption, lime and injected carbon, and logistics. A robust assessment must disclose which system boundaries it draws.

Relevance for the electricity system

An electric steel plant is a large consumer with a cyclical load profile. The melting cycles can be planned but cannot be shifted at will. Casting plants and rolling mills need a steady supply, and temperature control and quality requirements set limits. Flexibility only arises where scrap logistics, staffing, order situation and buffer capacities allow load shifting. This applies, for example, when heats are scheduled in hours with a low electricity price or when a heat is suspended during grid congestion. Without these conditions, the EAF is initially a high load, but not automatically one that serves the system.

Wind and solar power fluctuate. Every shiftable industrial load therefore gains in value. A steel plant, however, can neither bridge a Dunkelflaute (a period with little wind and sun) lasting several days nor resolve every congestion. In addition, there is the question of location: new electric furnaces, electrolysers and other large loads can make grid reinforcements, substations and new connection lines necessary. Connection requests therefore have to be coordinated.

Economic and legal framework

Whether an EAF pays off does not depend only on the electricity price. Equally important are scrap prices and scrap quality, the availability of DRI or HBI, the CO₂ price, investment costs, capacity utilisation and product quality. Scrap often contains tramp elements such as copper or tin, which can hardly be removed in the furnace and can impair high-quality flat steels. More recycling therefore requires careful sorting or dilution with DRI.

In Germany, the manufacture of basic iron and steel and of ferro-alloys (NACE 24.10) is one of the sectors that can receive electricity price compensation. This state aid offsets indirect CO₂ costs contained in the electricity price. The German Emissions Trading Authority (Deutsche Emissionshandelsstelle) is responsible. For the 2025 accounting year, the European Commission approved an extension in July 2026. For sectors that are already eligible, such as steel, the aid intensity rises to 80 per cent. For accounting years from 2026, the Federal Government has announced a further development that still requires state aid approval.

Common misconceptions

  • “The EAF replaces the blast furnace.” It replaces the converter as the melting stage. Primary steel from ore additionally requires a reduction step, for example direct reduction.

  • “Electric steel is green steel.” Whether that is true depends on the electricity mix, the input material and the auxiliary materials.

  • “An EAF can be controlled at will.” The shiftability of the load is limited by the production chain.

Sources

Related glossary entries

Edited by eCMS on 11.11.2026 19:43

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