Energy and natural resources
EAF (electric arc furnace)
A furnace that makes steel by melting scrap or DRI with electricity.
Last reviewedWhat does EAF (electric arc furnace) mean?
An electric arc furnace makes steel by melting steel scrap, direct reduced iron or both, using an electric arc. Compared with the traditional blast furnace and basic oxygen furnace route, EAF mills are smaller, cheaper to build, faster to start and stop, and emit much less carbon dioxide, especially with clean power. They depend on the price and quality of scrap and electricity. Example: an EAF using about 450 kWh of electricity per tonne pays about 36 a tonne for power at 0.08 per kWh; a rise to 0.12 per kWh adds about 18 a tonne. Nucor in the United States is a large EAF steelmaker, and many new low-carbon steel projects plan to combine DRI with EAFs.
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Related terms
- DRI (direct reduced iron)Iron made by removing oxygen from iron ore with gas or hydrogen, without melting it.
- Variable costA cost that rises and falls with how much you make.
- Capex (capital expenditure)Spending on long-lived assets such as machines and buildings.
- Barrel of oil equivalent (boe)A unit that converts gas into barrels of oil by energy content, so oil and gas can be added together.
- Lifting costThe cost of producing oil or gas from wells that already exist, per barrel.
- Full-cycle breakevenThe oil price a project needs to cover all its costs, including building it, and earn its required return.
- Fiscal breakeven oil priceThe oil price a government needs to balance its budget.
- Crack spread (refining margin)The gap between the price of crude oil and the prices of the fuels made from it.