In 2020, the world produced about 1,864 million tons of steel, and since some 75 percent of the energy used in steelmaking comes from coal, each of those tons sent about 1.9 tons of carbon dioxide into the atmosphere. The world can't get by without this ubiquitous metal at this point, but steel production is responsible for between 7-8 percent of global carbon emissions every year. This makes it a key target for decarbonization efforts, and it's one of the key areas where hydrogen is expected to be a cost-competitive alternative within a decade.
In typical production, blast or electric arc furnaces combine iron ore and limestone with coke (coal that's been baked at high temperatures to remove impurities) to create steel. But that coke reductant can be replaced with hydrogen, resulting in a process that emits nothing but water, and hydrogen can also be used to power the arc furnaces, giving you a steel production pipeline that's totally emissions-free.
Every major steel producer in the world is considering something similar to bring its emissions down, and there are plenty of incentives for downstream customers like automakers to get on board with green steel as it becomes available. A new development in Northern Sweden, headed up by the current CEO of Scania, aims to get some volume into the market early.
H2 Green Steel (H2GS) is working with a budget of around US$3 billion dollars. It will use hydrogen produced with renewable energy from Sweden's Boden-Luleå region, and production is scheduled to begin in 2024. By 2030, H2GS expects to be producing five million tons of high-quality zero-emissions steel annually.
The company says it'll be the first large-scale fossil-free steel plant, producing hot rolled, cold rolled and galvanized coils, which it expects to sell into the automotive, transportation, construction, pipeline and whitegoods markets, among others.
“We want to accelerate the transformation of the European steel industry," says Carl-Erik Lagercrantz, Chairman of the H2GS board, in a press release. "Electrification was the first step in reducing carbon dioxide emissions from the transportation industry. The next step is to build vehicles from high-quality fossil-free steel.”
This project is another encouraging indication of the increased appetite major investors are showing for decarbonization initiatives, which typically involve more risk and a longer wait for a return on investment than other places they could put their money.
But like all hydrogen-based initiatives, the H2GS project is going to need the price of green hydrogen to come down dramatically to realize its full potential. The vast majority of hydrogen produced today is grey, or dirty, often involving the use of fossil fuels such as natural gas or coal.
Source: H2 Green Steel
