Green H2-DRI Steelmaking: 15 Challenges and solutions

This report analyzes these different challenges and proposes possible solutions. The challenges and solutions are discussed under the following five categories:

• Cost, Economic Viability and Market Dynamics of Green H2-DRI

• Metallurgical Complexities and Technical Challenges in H2-DRI Steelmaking

• Clean Energy Requirement and Infrastructure for H2-DRI Processes

• Regulatory Framework and Standardization for H2-DRI

• Stakeholder Engagement and Skill Development in H2-DRI Transition

One of the primary hurdles is the technology’s cost and economic viability. Major economic barriers are the high cost of hydrogen production and the relative price of renewable electricity compared to fossil fuels in most regions of the world. Solutions include leveraging advancements in production economies, achieving economies of scale, and exploring financial support mechanisms and policies to make H2-DRI technology more economically attractive.

From a metallurgical perspective, H2-DRI introduces complexities in steelmaking processes, such as chemical composition and embrittlement variances. Without an inherent carbon source, there are challenges to ensuring the H2-DRI will behave chemically as is necessary for high-quality steel production with carbon addition, though the carbon footprint is lower. It will be necessary to carefully control the conditions of an H2-DRI plant to ensure a consistent and high-quality final steel product, particularly with the current global shortage in the supply chain of high-grade iron ore. These issues may necessitate equipment modifications, even in plants that already utilize an electric arc furnace (EAF) in their steelmaking. With these modifications, rigorous quality control measures and the implementation of advanced control systems are needed to ensure product quality and process efficiency.

Green hydrogen production is highly energy-intensive, and hydrogen is not as strong a reducing agent as its fossil fuel predecessors. As a result, the energy demand from switching to green H2-DRI steelmaking will require large-scale renewable electricity production. However, the intermittent nature of renewables and their need to be sited close to resource-abundant areas pose an infrastructure challenge that varies by region and can drive up the costs of H2-DRI steelmaking. Proper renewable energy, green hydrogen generation, and distribution planning are needed to address this challenge. This can vary for each country/region.

Furthermore, the report highlights the lack of a consistent policy and regulatory framework as a significant impediment. There is also an absence of clear global regulations and standards for hydrogen production, handling, and storage, which require policy intervention. Additionally, there will need to be training to create a shift in the workforce to accommodate this new technology.

Recommendations include implementing carbon pricing mechanisms, providing financial incentives for adopting green H2-DRI technology and for building more renewable electricity and green H2 infrastructure, and establishing clear regulations and standards for green hydrogen production and steelmaking processes to ensure quality and safety.

The social perspective, particularly resistance to change among stakeholders and policymakers, and a general lack of awareness about H2-DRI technology are also identified as challenges. There is a need for more education programs and public-private partnerships to build support for green H2-DRI technology and facilitate its adoption.

Transitioning to green H2-DRI steelmaking pathways has major potential for decarbonizing the steel industry, contributing to over 7% of annual global GHG emissions. Though scaling up the technology comes with challenges, there are opportunities to lessen these challenges with technological innovations, regulatory support, and stakeholder collaboration.

To read the full report and see complete results and analysis of this new study, Download the full report from the link above.

Interested in data and decarbonization studies on the global steel industry? Check out our list of steel industry publications on this page.