Around six percent of global CO2 emissions can be traced back to steel production. Producing steel entirely green would therefore be a huge step for the climate. The traditional blast furnaces are therefore to be replaced by direct reduction plants. As a result, the previously coal-based process for reducing iron ore is being replaced by a process using hydrogen as the reducing agent. The resulting iron sponges have to be melted down in further processing, which can be done with green electricity. This means that completely CO2-free steel production is possible in the future.
Hydrogen as a key technology
Hydrogen is at the center of green steel production. The energy source produced using electrolysis is completely CO₂-free if it is generated with the help of renewable energies. Its characteristics make hydrogen the ideal basis for the decarbonization of industrial steel production. You can find more information about hydrogen in the following posts: Hydrogen: Hype or Hope? – Greater Ideas / Hydrogen storage options – Greater Ideas / Why hydrogen cars are not a threat for electric cars! – Greater Ideas
In steel production, so-called direct reduction systems can be operated with green hydrogen. Liquid pig iron is no longer produced here, but a solid sponge iron that is refined into crude steel in a so-called electric arc furnace.
The direct reduction of iron ore is by no means new. The technology has been used based on natural gas for a long time, especially in countries where natural gas is available in sufficient quantities and at a low cost. In this way, fewer CO₂ is released than in the traditional blast furnace process with coal, but the steel is not yet climate-neutral.
The direct reduction with hydrogen, however, does not produce any CO₂. It is also possible to add a certain proportion of green hydrogen to natural gas to reduce the large proportion of fossil fuels used.
Effects on the market
With the green production processes, the market is being redistributed. Numerous customers, including the automotive industry in particular, not only want to reduce their emissions but are increasingly thinking about obliging their suppliers to comply with climate targets to decarbonize the entire value chain.
The subject of speed is thus developing into a decisive competitive advantage for steel manufacturers. Whoever succeeds first in producing green steel at competitive prices could find new large buyers and open up new markets.
Arcelor-Mittal is likely to be the first steelmaker on the market to offer specifically climate-neutral steel. However, it will be a few decades before the group works completely climate-neutrally.
Is it worth it?
It is worthwhile for the global climate if green hydrogen is used. However, there are still several unanswered questions, especially about profitability. How should the expensive hydrogen pay off and where do the huge amounts of electricity for hydrogen production come from? Can higher steel prices be enforced with end customers? Is there a climate tariff coming to eliminate global cheap competition? Do the steel manufacturers have to fill growing financial gaps at the same time because of the rising CO2 exchange prices? And where does the money for all the new technology come from? Support from the state is necessary, especially at the beginning of new technological development.
These challenges can only be mastered if we tackle them together with total conviction and enthusiasm in all areas.