In this list
Coal | Electric Power | Natural Gas | Metals

Green steel -- likely later than sooner

Commodities | Energy | Electric Power | Nuclear | Energy Transition | Emissions | Renewables | Natural Gas | Natural Gas (European) | Oil | Crude Oil | Refined Products | Metals | Non-Ferrous | Steel Raw Materials

Market Movers Europe, Jan 17-21: Ukraine border tensions spike commodity price fears

Metals | Steel

Platts Steel Raw Materials Monthly

Metals

2022: What drives the Global Iron Ore Markets?

Energy | Electric Power | Metals | Petrochemicals | Electricity | Non-Ferrous | Solvents & Intermediates

Trafigura and DRC's Shalina conclude financing, marketing deal on Mutoshi cobalt hydroxide

Agriculture | Grains | Energy | LNG

High natural gas prices could lead to spike in food costs through fertilizer link

Green steel -- likely later than sooner

Highlights

Commercial facilities expected after 2030 in Japan

Australia, Japan in supply chain project for gray hydrogen

China, India eye green steel to meet zero carbon goals

Singapore — Viable green steel production could be more than a decade away even though several of the world's major steelmakers are already actively developing plans to adopt the process to meet carbon neutral goals as the technology needed to handle and transport liquefied hydrogen is still in its early stages.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

The earliest that commercial implementation will occur is in Chubu, Japan, at about 2030 when a Nippon Steel-backed report estimates hydrogen demand will reach 110,000 mt/year, coinciding with a 2030 projection from the International Energy Agency.

Green steel, or carbon-neutral steel, would be produced using green hydrogen generated from renewable energy sources rather than fossil fuels, either as an alternative to pulverized coal injection, or PCI, material or as an alternative reductant to produce direct reduced iron, or DRI. The International Energy Agency projected that DRI based solely on hydrogen manufactured via electrolysis will occur as early as 2030.

A more straightforward process would use electric arc furnaces, provided the power was generated from a renewable source such as the sun or hydrogen fuel cells, but this is limited by ferrous scrap availability.

As a result, green steel production will depend on technologies and infrastructure for producing and handling green hydrogen on a commercial scale.

Such infrastructure would also need to include hydrogen vessels for transportation and tanks for storage. Liquefied hydrogen, or LH2, needs to be kept at a stable minus 253 degrees Celsius, just 20 C short of the atom-stopping minus 273 C, also known as absolute zero. This is far colder than LNG, which needs to be kept at minus 163 C, and existing equipment used for LNG may not be interchangeable with hydrogen as a result.

Japan's Kawasaki Heavy Industries built the Kobe LH2 Terminal (Hy touch Kobe) in December 2020 and an LH2 vessel the Suiso (hydrogen) Frontier for a 12-month pilot project by the CO2-free Hydrogen Energy Supply-chain Technology Research Association, or HySTRA, to establish a hydrogen supply chain between Japan and Australia. However, this will use gray hydrogen, as the gas was first produced in early February from Latrobe Valley coal in southeastern Australia.

"Prospective green ironmaking technologies are interesting, but are in an early stage of development, which will continue through the 2020s and 2030s, before we see larger-scale take up in the 2040s," BlueScope Steel CEO Mark Vassella said on Feb. 23. According to Australia's Bluescope, the cost of using hydrogen via renewable energy is about six times higher than natural gas.

Australia's mining giant BHP has divested, or has looked to divest, thermal and lower-quality met coal assets as part of its decarbonization efforts, while its counterpart Rio Tinto has already exited the coal business. Given investor antipathy, new steelmaking technology developments and carbon neutral targets, investment in met coal is dwindling.

Zero carbon goals

Rio Tinto and BHP have also signed memorandums of understanding with Asian steelmakers such as Japan's Nippon Steel and JFE Steel, respectively, to develop processes that cut or eliminate greenhouse gases from steelmaking.

Nippon Steel released a report entitled "Summary of Activities for Hydrogen Utilization in Chubu in 2030" on Feb. 19 that removed the steel sector from the scope of major end-users in Chubu such as power generation and petro-refining/petrochemical, citing "technological developments...expected to take place after 2030."

The findings showed that if hydrogen was priced at Yen 30 [28 cents]/normal cubic meter, or Nm3, in 2030, the negative price spread to switchable costs was projected at Yen 20 billion/year.

Other green steel agreements include China Baowu Steel Group Corp., which signed a five-year MOU with BHP in November 2020 to develop low carbon technologies for integrated steelmaking.

China released a draft of stricter iron and steel capacity replacement measures on Dec. 16 that included the development of electric arc furnaces and other lower emission steelmaking facilities targeted at helping China reach carbon neutrality by 2060.

More details are expected to be released during the Chinese People's Political Consultative Conference that begins March 4 and the 13th National People's Congress on March 5 in Beijing.

In South Korea, steelmaker Posco wants to decarbonize its steelmaking by 2050 by using green hydrogen to replace coal, estimating it will need 3.7 million mt/year. It also plans to become a major producer and supplier of hydrogen, making 5 million mt of green hydrogen by 2050. To meet its goals, the steelmaker said March 2 it will invest Won 10 billion to harness hydrogen for steelmaking.

India plans to launch a green hydrogen energy mission over 2021-22 that could see its domestic steel industry move towards decarbonization and open up new opportunities, especially for green steel.

"The pace of development of low-carbon hydrogen will be heavily dependent on policy and regulatory support. To commit to a hydrogen-powered future, policy needs to provide regulatory certainty that can reduce the risk of investing in clean hydrogen production, infrastructure, and applications. To-date, we have seen the bulk of investment into low-carbon hydrogen happening in regions like Western Europe and Australia, where policy makers have pursued ambitious targets and support mechanisms," Zane Mcdonald, senior analyst of transportation technology, policy and technology and scenario at S&P Global Platts Analytics, said.