A Hydrogen Europe research study has calculated that hydrogen delivered costs in Europe need to move below €3/kg for green steelmaking projects using hydrogen to break even.
It estimates in a report seen by Kallanish that hydrogen prices in Europe are now at some €5.3/kg.
Hydrogen Europe believes the target hydrogen price level can be achieved in 2025-2030 period. “If the green hydrogen production costs fall down as predicted, by 2025-2030 it should be possible to eliminate the cost gap entirely – even in a scenario with low fossil fuel prices. In the meantime, however, if the end consumers are not willing to pay a green premium for fossil-free steel, significant financial support would be needed,” the study explains.
In addition to the challenges of prices, the transition to green steel production also includes the challenge of hydrogen supply. “The total capacity of all installed BF-BOF plants in the EU is around 103 million tonnes of hot metal per year. Switching all of those plants to hydrogen-based DRI/EAF could potentially save up to 196mt of GHG emissions per year, but in order to do so would require up to 5.3mt of renewable hydrogen and up to 370TWh of additional renewable electricity generation (including EAF electricity consumption),” Hydrogen Europe adds.
The third challenge will be providing a constant supply of hydrogen to the reduction shaft. The steel sector will remain a challenging market for imported hydrogen, Hydrogen Europe concludes.
Emanuele Norsa Italy