Decarbonising the global steel industry 'would require 600GW of hydrogen electrolysers'
Net-zero steel production would require 52 million tonnes of green H2 annually by 2050 — and 2,000GW of renewable energy — says consultancy Wood Mackenzie
Hydrogen: hype, hope and the hard truths around its role in the energy transition
Green hydrogen’s role would only be assured if it can be provided “competitively” at around $2/kg, which would contribute to the overall production cost of green steel rising by 15-20% to around $100/tonne. This would be recouped via green premiums on decarbonised steel, the UK-based consultancy believes.
Price tag
The development of this hydrogen ecosystem for green steel production would come with a price tag of up to $176bn — around 44% of the $400bn WoodMac says would be required to switch over steelmakers to DRI technology — although it is not clear whether this includes the cost of building and operating dedicated renewables power. WoodMac had not clarified this point at the time of writing.
But despite the massive figures involved, the cost of green hydrogen is dwarfed by the overall investment of $1.4trn needed to put steel production — which accounts for 7% of all global emissions — on a net-zero pathway, the report said.
In addition to investment in green hydrogen and DRI, producers would have to throw cash at exploring high-grade iron mines, switching from highly polluting blast furnaces to electric arc furnaces, increasing recycling, and up to $250bn in carbon capture and storage.
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