- Press Releases
December 2 (Renewables Now) - The steel industry could almost completely remove its carbon emissions by 2050 with the help of hydrogen and recycling and the investment of USD 278 billion (EUR 245bn), according to BloombergNEF (BNEF).
The research firm says that green hydrogen could be the cheapest method to produce steel by 2050 and account for 31% of the market. Recycled material could account for another 45%, with the balance coming from older, coal-fired plants fitted with carbon capture and innovative processes that use electricity to refine iron ore into iron and steel. Currently, most of the steel is produced in coal-fired blast furnaces, a quarter is made from scrap in electric furnaces, and a small part through the direct reduced iron (DRI) process, which is typically natural gas-fired.
“The global steel industry is poised to begin a titanic pivot from coal to hydrogen. Green hydrogen is both the cheapest and most practical way to make green steel, once recycling levels are ramped up,” said Kobad Bhavnagri, head of industrial decarbonisation at BNEF.
The green shift in the steel industry will require beefing up steel recycling, particularly in China, procuring clean energy for electric furnaces and designing all new capacity to be hydrogen or carbon capture-ready. According to BNEF, the sector should also consider starting to blend hydrogen in existing coal- and gas-based plants to lower the cost of green hydrogen. Last but not least, all remaining coal-fired capacity should be retrofitted or closed by 2050.
Green steel production from hydrogen and electric furnaces will need much clean energy and a shift to higher grades of iron ore, BNEF noted.
In its report “Decarbonizing Steel: A Net-Zero Pathway”, the firm estimates that new clean capacity and retrofits for reduced emissions will mean an additional investment of USD 278 billion compared to business-as-usual capacity growth. This is dwarfed by the USD 172 trillion estimated to decarbonise the energy sector and most of it comes from operations, rather than capital costs, BNEF said, adding that in this respect reducing green hydrogen costs is of key importance. BNEF projects they should fall more than 80% by 2050 to below USD 1 per kg in most regions of the world.
Policies to support industrial decarbonisation could also help green steel compete with fossil-fuel based products.
(USD 1 = EUR 0.882)