European steelmakers need to be more transparent with their expected requirements of renewable electricity and hydrogen for planned green steel projects, so that sufficient supply is made available, according to a report by LeadIT.
Its analysis is based on data from its Green Steel Tracker of the possible renewable electricity and hydrogen demands for iron reduction and primary steel production in the EU. This is then compared with the production aspirations of the EU Renewable Energy Directive and with the renewable hydrogen targets under the REPowerEU plan.
The report says its assessment of company plans for sourcing renewable energy, green hydrogen, and/or hot-briquetted iron reveals there is insufficient transparency on how companies intend to supply these inputs, Kallanish notes.
It notes that many green steel production strategies depend on how the price of renewable energy and green hydrogen develops. More transparency would enable companies and policymakers to assess the feasibility of projects, to ensure realistic timelines. They could also assess whether sufficient supply infrastructure will be in place to meet demand at competitive prices.
“Most of these projects are planned to be online by 2030 – just five years away from today. Evaluating and planning the renewable electricity demand for the iron and steel sector with all stakeholders is essential to minimise delay,” says Per Andersson, head of secretariat of LeadIT.
According to the announced projects, which represent a third of current EU steel production, companies are planning to produce approximately 33 million tonnes/year of green iron and 42m t/y of green primary steel in the EU by 2030. By 2045, this would rise to approximately 35mt of green iron and 48mt of green primary steel.
If no scrap is used under scenario one, demand for green hydrogen could reach 1.7m t/y by 2030 and 1.9m t/y by 2045. This would account for 19% of the envisioned locally produced hydrogen.
The RePowerEU plan aims for a supply of 20m t/y of renewable hydrogen by 2030, with half produced within the EU and half imported.
With scenario two, which assumes 50% scrap usage alongside reduced iron for steelmaking, the renewable hydrogen demand decreases to around 1.05m t/y by 2045 and renewable energy demand to 84 TWh.
Renewable electricity demand for green iron and steel projects is likely to reach up to 135 terawatt hours per year for local renewable hydrogen production, GH-DRI iron reduction, and steelmaking via EAF.
The report also notes it would be much less energy intensive to use imported HBI than producing renewable hydrogen for the reduction of iron ore within Europe, requiring only a quarter of the energy.
The significant differences in energy needs across scenarios suggest that transparent planning by the EU, its member states and steel producers is essential to meet renewable electricity demand across sectors.
Carrie Bone UK
