Steel is estimated to contribute 8% of global GHG emissions, and hydrogen is receiving increasing attention as a solution. Emirates Steel and GreenIron H2O are examples of ventures decarbonising the supply chain by investing in green hydrogen steel production.
Using green hydrogen to reduce CO2 emissions in steel production is being promoted by Swedish start-ups and a Japanese-Emirati collaboration.
Converting blast furnaces and on-site power plants to green hydrogen tackles two of the largest sources of CO2 emissions in the steel-making process.
Funding for green hydrogen projects is on the rise and may contribute to the Net-Zero Steel Initiative’s (NZSI) interim (2030) and long-term goals.
Swedish start-up GreenIron H2 aims to use a hydrogen-based CO2-reduction process to recycle iron residuals and waste from H2 Green Steel’s operations, which in turn is an early-stage Swedish company focused on producing green steel.
Emirates Steel Arkan is partnering with ITOCHU Corporation and JFE Steel Corporation of Japan, to build a ferrous raw material production facility in Abu Dhabi as part of a global low carbon emission iron supply chain.
NZSI is part of the Mission Possible Partnership’s (MPP) drive to decarbonise seven of the world’s highest emitting industries over the next decade by leveraging the wherewithal of its core partners to drive agreement and action along the value chain.
Hydrogen’s appeal to decarbonise steel on the rise
The use of hydrogen in steel production can contribute to the decarbonisation of the sector by reducing the use of fossil fuels, and facilitating the use of recycled materials.
Replacing fossil fuels with green hydrogen, even in the most suitable use cases, is probably going to take well into the middle of the century, and substantial investment. Green hydrogen has been touted by proponents as a viable alternative to fossil fuels for use-cases in hard to abate industries like steel where high energy density molecules are needed.
Swedish start-up GreenIron H2 is focused on the sustainable recycling of iron-based waste into pure metal and steel using a hydrogen-based technique. Its partnership with H2 Green Steel seeks to apply waste management and circularity principles to showcase the steel plant of the future.
Emirates Steel believes its carbon footprint is already lower than global peers using coal in their operations and sees the availability of hydrogen at an industrial scale in steel production helping to make its products even more sustainable.
In 2021, 10 countries had developed hydrogen development strategies, with nine more in development. Activity was predominantly in the US, China, South Korea and Europe, with the UK announcing its own hydrogen plans in 2021.
Green hydrogen steel production has many hurdles to overcome
The MPP steel sector decarbonisation scenario assumes hydrogen will play a key role in decarbonising the steel sector, and sees the rise of hydrogen-based steelmaking reducing the cost of zero-carbon hydrogen production, for a wider range of industrial applications.
Steel production using hydrogen also becomes economically viable through the use of carbon capture and storage technologies, but these are still in the early stages of development.
Further, hydrogen prices would need to decline to $0.65/kg to compete with unabated steelmaking, absent any support from carbon pricing, which is not likely to happen by 2050, according to the MPP.
Green hydrogen prices varied between $29.81 and $30.87 in the Netherlands and the UK, respectively, while blue hydrogen (produced from natural gas and using carbon capture) runs $13.18/kg and $9.05/kg in the same two markets, according to Platts.
Replacing coal with green hydrogen would increase the price of steel by a third, based on findings by the European Parliamentary Research Service’s Scientific Foresight Unit. The location of steel mills has been influenced by the easy availability of coal.
Transitioning to green hydrogen will also require cheap renewable electricity to be available locally, or transported easily and cheaply, although the establishment of carbon-emission pricing may initially help offset related costs.