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Imagine a world where the skyscrapers, cars, and bridges that make up our daily lives are all contributors to a looming environmental crisis. That's the reality of today's steel industry – a crucial yet carbon-intensive part of our modern world. In 2022 alone, the industry was responsible for a staggering 2.7 billion tons of CO2 emissions, about 7% of the global total. And with the demand for steel expected to soar by 35% by 2050, the challenge is clear: How can we continue to build our world without breaking our planet?
Hydrogen emerges as a potential game-changer for the steel industry. This lightweight gas could revolutionize steelmaking by replacing coal and significantly reducing carbon emissions. The key technology here is the Direct Reduced Iron (DRI) process.
This method extracts oxygen from various iron ore forms (like sized ore, concentrates, pellets, etc.) and produce metallic iron without reaching the melting point, that is staying below 1,200 °C (2,190 °F), far less than traditional methods.
This process is noted for its energy efficiency. When compared to traditional blast furnace methods, steel production using DRI significantly reduces the need for fuel. Commonly, DRI is transformed into steel in electric arc furnaces, utilizing the heat generated by the DRI product itself.
It also allows for the production of steel closer to mining sites, reducing transportation costs and emissions.
DRI plants, with lower initial capital investment and operating costs, are perfectly suitable for countries with limited high-grade coking coal but available steel scrap for recycling. Direct-reduced iron, comparable in iron content to pig iron, is an excellent feedstock for electric furnaces used by mini mills, allowing them to use lower grades of scrap or to produce higher grades of steel.
The blue box is where the iron ore oxide is converted into iron by removing the oxide. Oxide (oxygen) is removed either using carbon or hydrogen in the heated chemical reaction. This iron then goes into the steel making process at the same location or at another location.
Currently, hydrogen-based steel is more expensive. The economic viability of “green steel” production is influenced by the cost of green hydrogen. But by 2050, as the costs of green hydrogen drop, it could compete head-to-head with traditional methods. Facility-level optimization in several iron ore producing countries focuses on locations with access to renewable energy sources and high-quality iron ore, accelerating the economic and environmental viability of hydrogen-based steel production.
DRI made with natural gas can cut carbon emissions in half compared to a coal blast furnace. The technology is catching on worldwide. DRI facilities accounted for about 36% of iron-making capacity under development, per a 2024 Global Energy Monitor and 9% of operational capacity.
To truly produce low-carbon steel, however, a DRI facility would need to fuel its DRI process with green hydrogen — the version of the hydrogen fuel made with completely carbon-free electricity — instead of natural gas, said Hilary Lewis, the steel director at climate advocacy nonprofit Industrious Labs.
The 45V tax credits created by the Inflation Reduction Act enable the 2025 price difference between DRI using natural gas and green hydrogen would be manageable. Natural gas powered DRI yields steel at a levelized price of about $800 per ton, according to calculations by clean energy think tank RMI. Green hydrogen would raise the steel price to about $964 per ton. The typical passenger car uses about one ton of steel.
Research indicates that green steel produced via hydrogen-based metallurgical reduction processes contains only 1-2 weight parts per million hydrogen in its final liquid form, similar to steels processed through current advanced methods. This shows the potential for hydrogen to play a significant role in creating environmentally friendly steel without compromising quality.
So, is hydrogen the secret ingredient for a greener steel industry? The signs are promising. Hydrogen holds the key to a sustainable and environmentally friendly future for the steel industry. Together with ongoing research and efficiency advancements, the large-scale implementation of hydrogen in steelmaking could significantly reduce the industry's carbon footprint, marking a critical step towards a greener future.
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