[ TECHNOLOGY ] |
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H 2
Cost Evolution
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Indicative Green H 2 Cost , $/ kg ( 1 )
$ 10
$ 8
$ 6
$ 4
$ 2
TARGET
GREEN HYDROGEN
NOW
$ - |
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0 |
20 |
40 |
60 |
80 |
100 |
120 |
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Electrolyzer Capex
$ 550 / kW $ 1000 / kW $ 1500 / kW
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Indicative Blue H 2 Cost , $/ kg ( 1 ) |
$ 10
$ 8
$ 6
$ 4
$ 2
$ -
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TARGET
BLUE HYDROGEN
US EU
0 4 8 12 16
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Blue H 2 cost @ $ 85 / t CO 2 for CCS |
Renewable Power Cost $/ MWh |
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NG Cost $/ MM BTU |
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( 1 ) Does not include compression , storage , transport , etc .
DRI is today predominantly produced with natural gas as the reducing gas and this production has already reached above 90 Mt / a , i . e ., coming a long way beyond what took place in Sweden the mid of the previous century . Despite the historical connection , there is no strong record of implementation in Europe . Within the EU today , there is only one mill producing DRI using natural gas as reductant , ArcelorMittal ’ s Hamburger Stahlwerke in Germany , with an annual DRI output at about 0.5 Mt . But recently several new projects have been announced in multiple EU countries and with the goal eventually use hydrogen as reducing gas .
Most of the DRI production was established in geographies where there was a need for steel production , however , with no or very limited availability of local scrap but a cheap and viable supply of natural gas . EAF based steel plants were put into operation and fed fully or predominantly with DRI from a next-door unit . Plants were located in countries like Venezuela , which also had local iron ore and cheap hydro power , Mexico , Malaysia , and , particularly , in West Asia and North Africa . Iran is today the world ’ s leading DRI producing country using natural gas reduction , producing around 35 Mt in 2023 .
Hydrogen and its challenges
Almost all hydrogen produced in the world today is based on natural gas and has a carbon footprint at 8-12 kg of CO 2 per kg of H 2 . A large part of this CO 2 can be captured , bringing the carbon footprint down to 2-4 , then referred to as “ blue hydrogen ”. However , for use of hydrogen to decarbonise iron and steel making focus has been on using electrolyzers , where the carbon footprint of the produced hydrogen will depend on the carbon footprint of the electric power used . Within the EU , on a country basis , this varies roughly from 40 to 600 g / kWh dependent of the power supply source mix . When largely being supplied from hydro , nuclear , solar , and wind power plants – in countries such as France and Sweden – typical figures are 40-80 g / kWh . The term “ clean hydrogen ” has been suggested for hydrogen produced with a carbon footprint below 2.0 or even below 0.5 Assuming 55 kWh / kg are required to produce the hydrogen , the carbon footprint of the electrical power supply therefore needs to be below 36 or even below 9 g / kWh .
Accordingly , for producing large volumes of green hydrogen to be used for DRI production vast amounts of green power are required , and this demand will compete with ongoing electrification across various sectors , e . g ., industrial processes and transportation . To meet these demands within EU , estimates indicate a need to maybe double the total supply of electrical power , and all this supply-increase should preferably be with a very low carbon footprint . This is a
28 Green Steel World | Issue 10 | February 2024