ESG data for steel driving hydrogen use, emission cuts: Ovako

Steel markets are increasingly seeking environmental data, as the industry looks for hydrogen supplies to decarbonize and meet emissions targets for automakers and other metals users.

Steel buyers are looking for more ESG and emissions data, to make informed trading and purchasing choices, as sustainability targets become focal. Environmental data is increasingly important for them, said Ovako's executive vice president for group marketing and technology, Goran Nystrom.

The engineering steel producer uses electricity for heat treatment, and has looked at ways to use hydrogen and oxyfuel for steel heating, to lower emissions further. Ovako already offers Environmental Product Declarations, which include Scope 1, 2 and 3 emissions.

"We have a world leading cradle-to-gate carbon footprint and we can provide data for all the products we ship, and we note now from customers that this is becoming more important," Nystrom said at the H2 Forum conference on April 28.

Hydrogen supply may help decarbonize steelmaking and can contribute energy, such as for clean transportation. Ovako is collaborating with Volvo Group to fuel trucks, while Volvo is working with Sweden's SSAB to trial new steel based on iron from the hydrogen-based HYBRIT joint venture pilot plant, developed between SSAB, utility Vattenfall and iron ore miner LKAB.

"Steel is a major topic [for hydrogen], in Sweden and everywhere in Europe. Steel is quite interesting as they have very long-term investments," Vattenfall Innovation's Managing Director Oliver Weinmann said in a panel discussion. It will be interesting to see how the first major off-takers of hydrogen develop, and steel is an attractive sector, along with transportation and oil refining, he added.

Ovako is planning to heat steel with hydrogen after successful trials with gas group Linde, and now Ovako has plans to develop two 34 MW electrolyzers. The capacity can increase availability of oxygen for its Hofors works, while enabling surplus hydrogen supplies to be offered, potentially at transport refueling centers.

"In the circular economy, Ovako can do a lot of things. First, how our products save on carbon dioxide in the end usage," Nystrom said. "We need to take leadership in projects that further improve our position."

Hydrogen with oxygen for steel heating is set to replace LPG, with Ovako already operating ferrous scrap-based electric arc furnaces (EAF) with renewable power. Power and electolyzer capacity for primary steelmaking in Europe will require millions of tons of hydrogen. The low emission gas's competitiveness will be partly dependent more on regulatory factors and steel trade.

Linde expects integrated steel mills with blast furnaces to generate 2.3 mt of carbon per ton of steel, basis Scope 1,2,3, compared with EAF mills with 0.6 mt of carbon emissions on the same basis, in an April paper. Linde said a ratio of up to 70% hydrogen content has been used in direct reduction iron (DRI) plants to date, with 100% hydrogen for iron ore reduction in feed gas currently undergoing trials.

Coal and hydrogen

For blast furnace-based steel plants, replacing some coal-based fuel with hydrogen is progressing in Germany, which has plans for several DRI plants. DRI plants in northwest Germany on the drawing board by Salzgitter, Thyssenkrupp and ArcelorMittal, will use huge quantities of hydrogen exclusively for ironmaking.

An area between Sweden, Denmark, Germany and the Netherlands offers the potential for early green hydrogen use, as offshore wind plants boost supply of renewable power for electrolyzers, according to regional utility Vattenfall.

Steelmaker ArcelorMittal operates steel plants in Hamburg and Bremen, and is trialing hydrogen use for DRI, expecting to switch to green hydrogen when renewables-based supplies are ready.

Vattenfall is bringing on more renewables capacity, with more than 3 GW of wind projects under construction, and over 6 GW in development, with solar and battery capacity in development too, Vattenfall Innovation's Weinmann said at the conference.

Vattenfall estimates the European industry may need 10 years for hydrogen to become competitive, and in the first phase, hydrogen markets will need some support, including subsidies in the short term, Weinmann said.

Europe will need to import hydrogen to boost supply with demand, like it does already for oil and gas, he said.

Electrolyzer costs are expected to go down, while carbon-based permit costs, or penalties, are expected to go up, and depending on power costs, the equation for green hydrogen is expected to become "better and better," Nystrom said.

Vattenfall is part of a group including oil and energy group Shell and Mitsubishi Heavy Industries promoting a 100 MW green hydrogen hub in Hamburg for completion in 2025, and the Stockholm-based group is involved in large scale electrolysis projects for hydrogen as feedstocks to energy intensive industries, and around hydrogen for transportation.

The broader NW Europe region has large natural gas and power transmission networks, with potential for injection of hydrogen into the gas grid, with tariffs and regulation yet to be developed, Markus Forstmeier, head of business development and sales at electrolyzer supplier H-TEC Systems, told the panel.

Ovako expects to be able to fuel 169 trucks a day with enough surplus green hydrogen to travel from central Sweden's Hofors mill to Hamburg with a 68 MW electrolyzer project. Prospects are ripe for collaboration and mutual goals between industries, and feeding energy networks, Nystron said based on Ovako's experience. Sectors are promoting bringing on hydrogen supplies in efforts toward emissions cuts, before hydrogen and carbon markets evolve further.