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Green Hydrogen: Is this the Final Step Needed to Decarbonize the Iron & Steel Industry?
May 27, 2025
Hydrogen has been heralded as a major energy transition fuel – that is to say, it holds the potential to complement other clean energy sources that are set to continue displacing fossil fuels. In hard-to-abate industries like steel production, hydrogen can play a key role in reducing greenhouse gas (GHG) emissions.
Traditionally, steel has been made using a highly emissions-intensive process, making it one of the world’s largest industrial sources of GHGs. A major ingredient of steel is iron, and iron has traditionally been produced by feeding coke (refined coal), iron ore and limestone into a blast furnace (BF). The resulting iron is then fed into a Basic Oxygen Furnace (BOF) to produce steel. This Process causes significant direct and indirect CO2 emissions because of its reliance on carbon-based fuel. Coke is reacted with iron ore and oxygen from the air, and this reaction process produces CO2 and heat. In the BOF, the extra carbon in the liquid iron is removed by injecting oxygen — which also generates CO2.
Hydrogen can be used in the ironmaking process to reduce iron ore into metallic iron, replacing carbon-based reductants. This produces water vapour as a by-product instead of CO2. This method has already been widely used at industrial scale for over 50 years. Direct Reduction of Iron (DRI) can already cut CO2 emissions by half compared with a traditional coal-based blast furnace.
The leading DRI technology and services provider, Midrex Technologies Inc., uses natural gas to produce hydrogen and carbon monoxide in a reformer, which is then used to produce DRI.
Hydrogen has therefore already been a part of iron and steelmaking for some time, albeit produced from fossil fuels. For further decarbonization impact, ‘green’ hydrogen should replace carbon-based ‘brown’ or ‘blue’ hydrogen. Green hydrogen is produced using electricity from renewable energy sources such as solar, wind, or hydroelectric dams. Hydrogen produced from nuclear energy is also carbon-free. However, for green hydrogen to scale meaningfully, a number of key challenges will need to be overcome, particularly the availability of supply and the cost of production, storage and transportation.
Hydrogen’s role in iron and steelmaking
Hydrogen is a gas that can be fed into a direct reduction plant to chemically reduce iron ore (mostly composed of iron oxide) into a purer form of iron called Direct Reduced Iron (DRI), by stripping out the oxygen bound to the iron oxide of the iron ore. The hydrogen reacts directly with the iron oxide to produce metallic iron and water, instead of iron and carbon dioxide (CO2) – the chemical reaction is called ‘reduction’, thus the name ‘direct reduction’. This DRI can then be fed into a BF, BOF, or EAF (electric arc furnace) to make steel with a much lower carbon footprint than the traditional coal-based blast furnace route.
Midrex offers two complementary technologies that can utilize hydrogen in the production of iron and steel. In a MIDREX H2™ plant, only hydrogen is preheated in an electric heater before entering a shaft furnace, where the iron reduction takes place. Meanwhile, a MIDREX Flex® plant can blend hydrogen produced from natural gas and externally-produced green hydrogen. The process is designed to accommodate more hydrogen as it becomes economical to do so. During the transition to a hydrogen economy, Midrex technology allows iron and steelmakers to reduce CO2 emissions today, while providing the readiness to switch to greater use of hydrogen as it becomes available.
Iron and steel-producing companies are investing in hydrogen-based reduction technologies for steel production at industrial scale, such as Stregra (formerly H2 Green Steel) in Sweden; GravitHy, a company planning hydrogen-based steel production in France; German steel companies Thyssenkrupp, SHS Dillinger and Salzgitter. HYBRIT, a partnership between Swedish industrial companies has also demonstrated 100% hydrogen direct reduction at a smaller scale.
Meanwhile in the Americas, hydrogen addition is being trialed at existing natural-gas DRI plants, such as Cleveland-Cliff’s facility in Ohio and ArcelorMittal’s unit in Quebec, Canada.
Hydrogen offers potential lifeline for heavy industry
While renewable energy continues to displace coal and natural gas for electricity generation in many countries, there is an additional need to find ways to reduce CO2 emissions in other emissions-intensive industries such as the production of metals, cement, chemicals, glass, ceramics, pulp and paper, and for commercial and residential heating. These sectors have been seen as the ‘hard to abate’ industries because of the complexities in replacing carbon-based energy; as a result, policymakers have tended to focus their attention on easier targets like energy generation as a relatively quick way to bring CO2 emissions down at scale.
But as the need to avoid serious climate disruption intensifies, a greater focus has come to bear on how to decarbonize these emissions-intensive industries. Avenues to reduce emissions in heavy industries include energy efficiency improvements, circularity (the re-use of materials to reduce waste), the use of biofuels, and electrification. Hydrogen produced from water electrolysis is an indirect form of electrification.
Electrolysis uses electricity to split water into its constituent parts, hydrogen and oxygen. The overall carbon footprint of this form of hydrogen generation is determined by the energy source used to produce the electricity. This can be very emissions intensive, in the case of coal or lignite-fired electricity, or virtually carbon-free in the case of wind, solar, tidal, wave, hydroelectric, nuclear, geothermal or biomass-fired electricity. This is why using hydrogen for direction reduction of iron only makes sense if it is produced from decarbonized electricity.
Hydrogen facing challenges of scale and cost
To recap, hydrogen holds significant potential as a chemical molecule for the ironmaking reactions (i.e. not as a fuel). But what are its drawbacks?
For a start, the supply of hydrogen is not yet sufficient to allow major industrial companies to undertake a large-scale switch to the fuel, and the current limited hydrogen generation capacity also means its cost remains high compared with other energy carriers.
Hydrogen is also expensive because of the significant amount of energy needed to produce it. Hydrogen also requires precautions to be taken for its transportation and storage. Moreover, hydrogen has a low energy density by volume, and needs to be compressed or liquified for transportation, which adds to its energy consumption and overall costs.
Government support is likely to be required to help develop the economies of scale needed to make hydrogen a major player in the industrial sector, and this involves connecting hydrogen production capacity through transport networks to major sites of consumption, or combining them to avoid the need to transport the fuel significant distances.
A greater expansion of renewable energy capacity worldwide would help support the scaling up of green hydrogen production, which in turn would help to reduce its cost, making it competitive against other fuels. Among other challenges, the intermittent nature of solar and wind energy means there is a mis-match between its generation and the need for constant and reliable power to meet demand from heavy industries. Storage and distribution of clean electricity and/or hydrogen are further limitations that need to be overcome.
Despite these technical and commercial challenges, the growing need to decarbonize the global economy, and the emissions-intensive industries in particular, bodes well for the development of a hydrogen economy, which among other options, offers a viable route to lower-CO2 iron and steel production. In this context, DRI is already the main option to reduce emissions in the iron and steel industry, but the use of green hydrogen can further help decarbonize the process if the costs can be brought down.
Sources:
Midrex: The green revolution in steelmaking: how Midrex is leading the way – Midrex Technologies, Inc.
Midrex: Ultra-Low CO2 Ironmaking: Transitioning to the Hydrogen Economy – Midrex Technologies, Inc.
Stegra: Stegra – Decarbonizing at scale – Stegra
Hydrogen Europe: News | Hydrogen Europe
ArcelorMittal: Technology pathways to net-zero steel | ArcelorMittal
GravitHy: GravitHy – a sustainable iron and steel company
GMK Centre: German steel industry will become the main European consumer of green hydrogen
Hydrogen Newsletter: Hydrogen Newsletter
East Midlands Hydrogen: The UK’s largest inland hydrogen cluster | East Midlands Hydrogen
Institution of Mechanical Engineers: 5 major challenges in the hydrogen economy in 2024 – and 5 potential solutions
US Department of Energy Hydrogen Program: Home | Hydrogen Program