Categories: Steel , Electrification
Published 5 Jul 2023

As the steel industry moves towards decarbonization and a carbon-neutral future, green hydrogen is increasingly being talked about as the answer. But is it the silver bullet that will solve all the industry’s challenges?

How do you decarbonize one of the most world’s most carbon-intensive industries? That is the question facing steel producers, who need to act now if they are to have any chance of meeting carbon neutrality targets, such as those specified in the Paris Agreement or the EU’s Green Deal. And increasingly, the industry is turning toward green hydrogen as the answer.

The Hybrit project has already developed technology capable of producing fossil-fuel-free steel using hydrogen, which it is now trying to scale up. Meanwhile, the EU-funded HyInHeat project is working toward using hydrogen to fuel high-temperature heating processes including those found in the steel industries. In Sweden, Ovako has just completed construction of one of the world’s largest green hydrogen production plants, which it plans to use to heat steel before rolling. And the EU recently granted 280 million euros to Belgian steel producer ArcelorMittal to partially decarbonize its production processes using hydrogen.

Why hydrogen?

On the surface, it is easy to see the appeal of hydrogen. The majority of the steel industry’s carbon emissions derive from the burning of coal used in the direct reduction process. By replacing coal with hydrogen, this would essentially decarbonize the whole process, and the only byproduct would be water vapor.

Producing hydrogen requires a lot of energy, and global production has to be increased dramatically if it is to meet the needs of the steel industry.

However, multiple challenges remain before this can become a reality. First, producing hydrogen requires a lot of energy, and global production has to be increased dramatically if it is to meet the needs of the steel industry. Second, it must be green hydrogen – that is, hydrogen produced using renewable energy, as opposed to gray hydrogen, which is produced using fossil fuels. Quite simply, if green hydrogen isn’t used, then any progress toward decarbonization will be nullified.

The good news is that the cost of producing green hydrogen has already fallen by 60 percent in the past decade and is around 3.6 to 5.3 euros per kilogram. As production increases, and the cost of renewable energy continues to drop, it is estimated that by 2030, the cost of green hydrogen will be 1.8 euros per kg (Source: EU).

The energy challenge

Before green hydrogen can be a viable alternative, vast amounts of cheap, renewable energy will need to be made available. It is estimated that around 50 kWh of power is required to produce 1 kg of hydrogen, and that 50 kg of hydrogen are required to produce one ton of steel. In Germany, the EU’s largest steel producer, this means around 100 terawatt-hours (TWh) of renewable energy will be needed to meet its annual steel production of 42 million metric tons of steel, corresponding to a 20 percent increase in electricity consumption in Germany (Source: EU).

One reason why green hydrogen production requires so much energy is because of its inefficient production method, which involves electrolyzing water. Around 30 percent of the energy used is lost in the production process alone, while even more energy is lost during transportation, depending on how far it needs to be transported.

What role can electric heating play?

Hydrogen’s high energy losses mean that where possible, it is far more efficient to use renewable energy directly as a fuel for heating, rather than convert it to hydrogen. This can already be done today when it comes to post-production heating processes. For example, before investing in its new hydrogen plant, Ovako was able to reduce its carbon emissions from its operations by 57 percent partly by converting the gas heaters in their heat treatment furnaces to electricity. The Hofors hydrogen plant is just the next step in their journey toward becoming a carbon-neutral steel producer.

As it stands today, electric heating cannot be scaled up to deliver the temperatures and power needed for the blast furnaces used in the steel industry, while hydrogen-powered solutions are still in the development phase. But electric heating can already be used to decarbonize many heating processes. In the future, electric heating can be combined with hydrogen-based solutions to help make a complete transition to carbon-free operations.