Green Steel Demands Halving Hydrogen Prices

A study by Hydrogen Europe has calculated that the cost of delivering hydrogen in Europe should be below 3 EUR/kg for green steel projects using hydrogen to break even.

According to a report seen by Callanish, hydrogen prices in Europe are now around 5.3 euros/kg.

Hydrogen Europe believes that the hydrogen price target can be reached in the period 2025-2030. “If green hydrogen production costs decline as projected, by 2025-2030 it will be possible to completely close the cost gap – even in a scenario with low fossil fuel prices. However, at the same time, if end-users are not willing to pay a “green surcharge” for steel that does not contain fossil fuels, significant financial support will be required,” the study explains.

In addition to cost concerns, the move to cleaner steel also involves the issue of hydrogen supply. “The total capacity of all installed blast furnaces in the EU is about 103 million tons of pig iron per year. Switching all of these power plants to hydrogen VFR/EFF could potentially reduce greenhouse gas emissions by up to 196 Mtpa, but would require up to 5.3 Mt of renewable hydrogen and up to 370 TWh of additional electricity generation from renewable sources (including electricity consumption in electric arc furnaces),” adds Hydrogen Europe.

The third task will be to ensure a constant supply of hydrogen to the reduction shaft. The steel sector will remain a difficult market for imported hydrogen, concludes Hydrogen Europe.