Scaling Up Hydrogen: The Case for LowCarbon Steel
The steel sector – which accounts for 7% of global carbon emissions – could be one of the largest sources of demand for low-carbon hydrogen.
Steelmaking methods using hydrogen could decarbonize over 40% of global production by 2050. BNEF estimated this would require at least 150 million metric tons of hydrogen per year. The costs of hydrogen-based steel are already in a range acceptable to some buyers, while the policy frameworks and commercial justification for scaling low-carbon steel are starting to take shape.
This whitepaper provides an overview of hydrogen’s role in steel decarbonization and outlines commercial and policy
considerations that, if implemented, could bring forward the timeline for costcompetitive hydrogen-based steel.
• Today’s steel and iron market is worth $ 1.6 trillion, with most steel going to buildings, infrastructure, mechanical and electronic equipment, and the transport sector.
Steel products are mostly made and consumed locally, with only 22% traded internationally. Theconstruction sector represents over half of global steel demand, and the length of its value chain increases the complexity of steel decarbonization.
• The steel sector is the largest industrial consumer of coal, and hydrogen is the most critical technology to decarbonize production. Hydrogen-based production methods account for 42% of global steel production in a net-zero-by-2050 scenario, according to BloombergNEF’s New Energy OutlookHydrogen can replace coal and natural gas as both a primary fuel and reducing agent for high-quality iron ore in the direct reductionelectric arc furnace (DR-EAF) route.