Aimed exclusively at the global steelmaking industry, the Sustainable Steel Strategies Summit, hosted by Steel Times International, wrapped up its two-day virtual event on June 23. Packed with speakers, the conference covered a variety of innovations and efforts in the theme of decarbonization. One topic in particular stole the show: hydrogen. Although hydrogen is the lightest element in nature, it could have a heavy impact on the steel industry, essentially replacing carbon and cementing the industry’s place within the circular economy.
The steel industry has already made major strides in beginning the transition to electric arc furnaces (EAF), which produce steel from Direct Reduced Iron (DRI) in less time, for less money, and with fewer energy requirements than traditional blast furnaces. However, despite these efficiency gains, DRI-EAFs still generate carbon emissions. When producing steel with carbon monoxide as a reductant, as is typical in the industry, the process also emits a large amount of CO2. According to Asa Ekdahl, the Head of Environment and Climate Change at worldsteel, on average in 2020, every metric ton of steel produced created 1.85 metric tons of CO2. Furthermore, the annual direct emissions totaled 2.6 billion metric tons, which accounted for 8% of all global CO2 emissions. These numbers establish the steel industry as one of the largest carbon emitters in our global economy, yet the efforts to green the industry are ramping up.
This is where hydrogen comes into play. By substituting hydrogen into the steelmaking process through hydrogen-based DRI-EAF, water is produced as a byproduct rather than CO2. According to Stefano Maggiolino, the President and CEO of Tenova, utilizing hydrogen as a reductant is both easier and faster than using carbon monoxide, implying that manufacturers reap the same results in a quarter of the time. Hydrogen also lowers energy demands and emits less soot, so the technology’s benefits are twofold. The hydrogen-based DRI-EAF process could transform the steel industry, as it is the only method by which steel production can be completely decarbonized if used in tandem with green hydrogen production. Green hydrogen is a classification denoting hydrogen generated through electrolysis, powered by renewable energy such as solar or wind. If green hydrogen is used for the DRI-EAF process, then the entire steelmaking process could be considered green, drastically cutting overall emissions.
While hydrogen is becoming a promising alternative to traditional steelmaking practices, there are still some obstacles preventing its immediate integration. First of all, hydrogen (especially green hydrogen) is not readily available on the market. The steel industry would require access to a reliable supply of renewably-sourced hydrogen in order to support the growing demands for steel. In a similar vein, the price of hydrogen will need to fall so that it can compete with its fossil-based alternatives. In his presentation for the Sustainable Steel Strategies Summit, Alex Griffith, a principal analyst from Wood Mackenzie, noted that hydrogen prices would need to drop below $3/kg for it to be worth the switch. Additionally, CO2 penalties would need to rise to an inaccessible rate above $100/tonne to incentivize the transition to green steel. This implies that governmental support will be necessary in these decarbonization efforts, whether through taxes, fees, subsidies, or preferences. Some governments such as South Korea, Germany, and the United States have already taken steps toward clean hydrogen policies, but there is nevertheless more work that needs to be done in order to support the transition to green steel.
Although complete decarbonization of the steel industry remains a goal for the near-distant future, there are some changes steel companies can implement in the meantime that will incrementally lower emissions. Continuing the transition to EAF steel plants, as well as ramping up the amount of steel made from recycled materials, are a few ways to do this. Automobile, construction, and other steel-intensive companies will also have a large role to play in the transformation of the steel industry. In buying from and supporting steelmakers who have already made the switch amidst this competitive market, these companies can aid in the transition to green steel.
Steel is essential to modern life, and as the world grows, its demand will continue increasing. Green hydrogen provides the key to producing steel cheaper, faster, and without any of the negative environmental side-effects of the traditional steelmaking process. Though in its early stages, the combined efforts of the steel industry, end users, and the government can make green steel a reality.