Hydrogen Buzz or Meaningful Change? The Steel Industry Goes Green

With the first ‘green steel’ plants due to come online in 2025, one of the world’s most polluting industries is preparing for the transition to a green future. Florence Jones investigates.

Steel production releases more emissions than any other industry, with the sector responsible for 9% of global carbon dioxide emissions. But the industry is changing with new, so-called “green steel” plants due to begin production in 2025.

According to the International Energy Agency, if 2050 emissions targets are to be met then the steel industry must cut emissions by 50%. As one of the oldest manufacturing industries globally, change has been slow but interest in green steel production is growing as producers seek alternatives for resource-intensive methods.

The EU increased the number of planned green steel projects to 38 in 2023, up from 23 in 2021. Additionally, Germany alone has invested $9.1bn (€8.5bn) into the decarbonisation of its steel industry, clear steps towards a more environmentally responsible form of production, and moves that could be the first significant steps in truly decarbonising steel production.

Decarbonising operations

Steel decarbonisation could be a viable process, as the production of steel relies on a number of processes, all of which are moving away from carbon-intensive forms of production. Typically, steel is produced by reducing iron ore in a blast furnace which is heated to temperatures of over 1,000⁰C. The burning of coal to reach these high temperatures is responsible for a significant proportion of the carbon dioxide emissions associated with steel production.

With a number of European steel plants due to be relined in the coming years, a spokesperson from NGO Reclaim Finance says that: “the steel sector is at a turning point and decarbonising to reduce climate impacts must be an urgent priority. Getting it wrong would be fatal as it would mean the development of coal-based capacity, which, with a lifetime of around 20 years, would lock in emissions for decades”.

Conversely, one of the main methods of producing green steel is through the use of renewable hydrogen in the place of coal. While the method of using hydrogen to create green steel exists as an idea in principle, its use on an industrial scale remains to be seen.

When burned, hydrogen produces only water as a by-product; therefore if hydrogen is produced via electrolysis using only renewable electricity then it can be considered entirely green. When using an electric arc furnace hydrogen can be used to produce the same chemical reaction which occurs in in traditional steel making but with reduced emissions.

The EU outlines in its briefing on the potential for hydrogen to decarbonise the steel industry that the main barrier for large-scale green steel production is access to green hydrogen. Traditionally, steel production takes place in the same region that iron ore and coal are mined. However, new green steel developments are less bound by geography.

The report states: “With the transition to green hydrogen, the local availability of cheap renewable electricity, or the existence of transport facilities for hydrogen [such as] pipelines [and] port facilities will become important aspects of steel industry competitiveness”.

The briefing found that: “Producing the necessary amounts of hydrogen for a full decarbonisation of the steel industry would require an increase in electricity production of the order of 20%.”

Challenges of scale

However, while the technology is impressive, questions remain as to its efficacy on a large scale. Suzanne Schenk, head of grants and steel campaigner at Europe Beyond Coal, says that: “You would need so much renewable energy to create the amount of green hydrogen necessary for the steel industry that we can’t ramp up enough quickly”.

Schenk also notes that some companies are planning to use blue hydrogen, which is produced using natural gas and supported using carbon capture and storage, in the intermediary period.

“On the one hand it is positive to invest in the clean technology because we also can’t wait until all of the green hydrogen is available to invest in the clean technology, but it is a risk,” says Schenk. “You need a very clear moratorium or an end date for the use of fossil gas and a very clear road to procuring or producing the green hydrogen.”

One company which has committed to using exclusively green hydrogen is H2 Green Steel, which has started production on Europe’s first green steel plant in Boden Sweden. The company claims that the first batches of green steel will be rolled out in 2025. H2 Green Steel will use hydropower from the nearby river Lule to power the electrolysis process which will generate its own green hydrogen on site.

The company recently announced that it has entered into an agreement with Fortum to produce carbon-free electricity for its steel production. Rikard Dagerbäck, sales manager and strategic customer director for Fortum said of the agreement: “We believe that the complex nature of electrification and hydrogen projects at scale require cross-sectoral partnerships as well as large amounts of clean energy.”

Schenk was supportive of this fully-comprehensive approach stating that “there should be some sort of commitment or secured access to green hydrogen when launching such a project”.

Learn more: Mining Technology