Greenhouse gas reduction and economic cost of technologies using green hydrogen in the steel industry

Reducing greenhouse gas (GHG) emissions from the steel industry is one of the top priorities for mitigating climate change. Although hydrogen has been considered as a key element to accomplish this task, the effects of various hydrogen-using technologies in steel mills have not been analysed and compared to each other. This paper quantitatively analysed the greenhouse gas reduction in steel mills by the use of hydrogen produced from electrolysis with renewable electricity. The four following methods of using green hydrogen were proposed and analysed: 1) use of hydrogen directly in the hydrogen steelmaking process, 2) use of hydrogen to convert byproduct gases produced from steel mills into methanol, 3) use hydrogen to convert the byproduct gases into methane, and 4) sell hydrogen to the hydrogen station and use of oxygen, another product of electrolysis, to reduce the use of air separating unit in steel mills. Not only the greenhouse gas reduction benefits but also the economic cost of these four methods were evaluated. As those results can vary according to country, the economic cost and GHG reduction benefits were determined for the representative steel-producing countries of China, India, Japan, the United States, Russia, South Korea, and Germany. The economic cost was evaluated not only for the present (2020) but also for the future (∼2040) because these methods are more likely to be implemented in the future. Currently, in the representative steel-producing countries, Method 1 was analysed to have the largest GHG reduction among the four methods; but it also showed the largest cost because of its large capital expenditures and electricity cost. Method 2, which converts the byproduct gases into methanol, was shown to offer larger GHG reduction and smaller economic cost than Method 3, which converts the byproduct gases into methane. Comparing Methods 1 and 2, Method 2 offered smaller GHG reduction but a much smaller economic cost than Method 1. Although the cost of Method 4 is currently the smallest, the economic cost of Method 2 is predicted to become lower than that of Method 4 in the future, near 2030, because the future prices of hydrogen and the CO₂ allowance are expected to decrease and increase, respectively. These results can be utilized when steelmaking country or steelmaking company make their decision on how to decrease the GHG emissions by using green hydrogen.