The role of green hydrogen in decarbonizing steel production
Steel is a versatile and essential material in modern life. From engineering structures and transportation to household appliances and furniture, it plays a key role in everyday products and components.
However, steel production is one of the most energy-intensive industries, accounting for about 7-9% of global carbon dioxide (CO₂) emissions.
This is because the traditional method relies on coke or metallurgical coal, which serves both as an energy source and as a reducing agent in converting iron ore into steel.
This reliance on coal has significant environmental consequences, prompting the search for cleaner alternatives.
One promising solution is green hydrogen, which is hydrogen produced by water electrolysis using renewable energy sources such as wind or solar power.
In conventional steelmaking, coal is used to reduce iron ore (iron oxide) into metallic iron, releasing CO₂ as a byproduct:
In contrast, the hydrogen-based Direct Reduction of Iron (DRI) process uses hydrogen as the reducing agent. When hydrogen reacts with the iron ore, it produces metallic iron and water vapor instead of CO₂:
This process is not only more sustainable but also aligns with global efforts to achieve carbon neutrality.
Using green hydrogen in steel production offers numerous advantages:
• Zero CO₂ emissions
In the traditional blast furnace method, every ton of steel produced generates about 1.85 tons of CO₂. In contrast, using green hydrogen results in water being the only byproduct, dramatically reducing the industry's carbon footprint.
• Market incentives and competitive advantages
Steel producers who adopt hydrogen-based processes may benefit from subsidies, tax breaks, and a competitive edge in markets that prioritize low-carbon and more sustainable products. The growing demand for "green steel" from environmentally conscious consumers and industries further bolsters the economic case for hydrogen.
Notably, a recent report showed that the premium to buy green steel-made cars is so negligible with respect to the total cost of a vehicle that customers wouldn’t even notice.
• Lower long-term costs
While the initial investment in hydrogen-based steel production is high due to the need for new infrastructure, long-term benefits include lower operating costs. As renewable energy prices continue to decline, green hydrogen production is expected to become more cost-competitive. In contrast, coal prices remain volatile and subject to regulatory pressures from carbon pricing mechanisms.
Despite its advantages, adopting green hydrogen in the steel industry presents several challenges:
• High production costs
Currently, green hydrogen is more expensive to produce than its grey counterpart (derived from natural gas) or coal. Therefore, scaling up its production is crucial for cost reductions.
• New infrastructures requirements
Transitioning to hydrogen-based steel production requires significant investment in new DRI plants and systems for its storage and distribution.
• Energy demand
Producing green hydrogen through electrolysis requires large amounts of energy, an estimated massive 135 TWh of new renewable electricity, necessitating substantial capacity expansion.
Green hydrogen presents a tangible solution for decarbonizing one of the world's most polluting industrial sectors. While technical and economic challenges remain, ongoing technological advancements and supportive policies are likely to accelerate the adoption of hydrogen in steel production.
This transition not only supports climate goals but also positions the steel industry as a leader in the global shift toward sustainable industrial practices.