It could take until 2050 for hydrogen-based steel production, carbon capture and storage (CCS) and carbon capture usage (CCU) to be competitive options for steelmakers, according to consultancy McKinsey.
Adopting CCS and CCU could add operational expenditure of around €100/t to crude steel, McKinsey said, while hydrogen-based production would incur costs of €170/t. But increases in scaled hydrogen production and carbon taxes will make the technologies competitive options by 2050.
Steel is one of the top three contributors to carbon dioxide emissions globally, accounting for around 7-9pc of all CO2 emissions. Every tonne of steel produced last year released 1.85t of CO2 into the atmosphere, amounting to 2.6bn t of emissions, according to global steel producers' association Worldsteel.
While hydrogen is in the limelight at present, there is not just one solution to low-carbon steelmaking, with the options depending on a variety of factors, including geography, availability of resources and government support. The use of biomass as an alternative fuel, for example, is mainly available in Latin America and Russia because of availability, according to McKinsey. In areas with access to CCS, such as the the UAE, the US or the Netherlands, the technology might be the most appropriate route for mills looking to decarbonise. At leading UAE steelmaker Emirates Steel, 800,000t of CO2 is captured per year, which is then pumped through a 50km pipeline and injected into an oil field.
In areas with low-carbon energy, the deployment of water electrolysis and hydrogen reduction could be utilised, Worldsteel said.
Governments need to provide policy support that does not pick "winners and losers among possible technologies" and reduce first mover disadvantage by increasing demand for low-carbon material and a market for low-carbon steel. Low-carbon steel can be 50pc more costly to produce than current widespread production forms, Worldsteel said, citing a report from the International Energy Agency.
