Forging a sustainable future: how hydrogen can spark the green steel revolution

We are proud to work on some of the boldest hydrogen projects to deliver secure, affordable and reliable low-carbon energy. Yet as the world transitions towards a low-carbon energy future, decarbonising steel production poses an acute and immediate challenge. 

Steel production is responsible for approximately 7% of global CO2 emissions, and 14% of total industrial emissions in the UK. Reducing steel’s carbon emissions is therefore vital in order for the UK to fulfil its 2050 net-zero targets. We are already starting to see green shoots of progress, with the UK’s two largest steel producers - Tata Steel and British Steel – in talks with the UK government over funding for their low carbon transition plans. Last year, British Steel announced a £1.25 billion decarbonisation plan, marking a key turning point in the sector.  

Hydrogen-based steel production is widely viewed as the leading solution for decarbonising the sector in the long-term whilst meeting rising global demand. Yet challenges remain as the growth of the hydrogen market at both the global and the UK level requires acceleration.

As the journey towards hydrogen-based steel gathers pace, our recent Green Steel white paper revealed four main drivers that will underpin the future of the global green steel industry:

• Driving access to low-cost hydrogen – Fewer than 40% of steel-producing countries have access to cost-effective renewable energy to make low-carbon hydrogen. This means areas with potential for lower-cost renewable electricity such as Oman or the UAE will be in the driving seat, with European countries falling behind. It is imperative that we strengthen capacity building, knowledge sharing and financing mechanisms to derisk hydrogen, and yield substantial socio-economic benefits for emerging markets and developing countries.
  
  

• Accelerating supply-chain shifts – It’s no secret that the switch to hydrogen-based steel production is a huge undertaking. Existing supply chains – specifically iron ore – will be disrupted, with opportunities in some countries posing threats to production in others. We now need a concerted global effort to scale up supply chains based on access to iron ore and existing assets, as well as green hydrogen (for H2-DRI).
  
  

• Addressing access to finance – Unlocking investment will be another key determinant on the shift to hydrogen and green steel. Whilst we are already seeing financing in infrastructure, research, development, it is clear much more capital is needed to scale up green-steel technologies and projects related to hydrogen production.
  
  

• Prioritising policy measures – As the race for green steel and iron production gets underway, access, supply chains and finance will all hinge on policy at a national and regional level. Governments must step up to deliver meaningful policy and regulation to support the entire green-steel ecosystem, with a combination of increased incentives and streamlining permitting and planning requirements key to catapulting the sector forwards.

It is clear that the global steel industry faces a formidable challenge to decarbonise, and the switch to hydrogen-based steel production could offer potential for reducing emissions in the long term. The transition is possible, but overcoming obstacles in accessibility, costs, technology, and deployment will require a collaborative effort across private organisations, industries and governments.

We are at the cusp of a low-carbon energy future – and there is a clear window of opportunity for hydrogen to drive the net-zero transition both in the UK and worldwide. We invite you to have a read through our Green Steel white paper – exploring the challenges, possibilities and potential for green steel to minimise the sector’s environmental impact, and help build the foundations for a sustainable and resilient energy future.