According to the World Steel Association, 2023, steel manufacturing is responsible for nearly a tenth of global CO2 emissions, making it a critical challenge in the fight against climate change. In this blog, we explore how green hydrogen can transform the steel industry by significantly reducing its carbon footprint to help meet global decarbonization goals.

‍

Decarbonizing Steel: A Crucial Step Toward Climate Goals

Steel is the backbone of modern society, found in everything from skyscrapers and bridges to vehicles, appliances, and essential tools. Steel production is over two billion tons annually and employs more than six million people worldwide (Metal World Insight, 2021). However, this vital material comes with a heavy environmental cost.

Around 75% of steel is still produced using coal-fired blast furnaces, which rely on coke—a carbon-rich fuel derived from coal—to reduce iron ore into molten iron (World Economic Forum, 2022). This process releases enormous quantities of carbon dioxide, both through the combustion of coke and the chemical reduction of ore. Each ton of conventional steel generates roughly 1.8 to 2.2 tons of CO₂, contributing to nearly 8% of human-induced CO₂ emissions worldwide (Metal World Insight, 2023). This stark reality highlights the urgent need for climate action in the steel sector.

The urgency for change is growing with pressure from international climate commitments like the Paris Agreement and reports such as the World Economic Forum, which highlight the steel sector’s disproportionate climate impact. For example, as early as 2016, the World Economic Forum's "Shaping the Future of Energy" report emphasized the significant role of the steel industry in global carbon emissions.

This outsized environmental footprint makes the steel industry both a major contributor to climate change and a prime focus for clean energy innovation. Cleaning up steel production is not only essential for climate goals but also represents a pivotal opportunity to lead in the future of steel.

Fortunately, the transition to a cleaner steel sector not only addresses environmental concerns but also presents significant economic benefits. According to the International Energy Agency's (IEA) "Net Zero by 2050: A Roadmap for the Global Energy Sector" (2021), adopting cleaner technologies in the steel industry can lead to the creation of new jobs, lower operational costs, and the development of new markets for sustainable products. Green steel, produced without fossil fuels, is a promising pathway to decarbonization. By substituting coal with renewable electricity and green hydrogen in the iron reduction process, steelmakers can significantly reduce their emissions while enhancing long-term sustainability and competitiveness.

This transition is supported by the World Steel Association's report "Steel and Climate Change" (2021), which emphasizes the critical role of green hydrogen and renewable energy in lowering the industry's carbon footprint. Among the emerging solutions, green hydrogen stands out for its potential to significantly reduce the carbon footprint of steel production and help industries meet increasingly urgent climate targets. The IEA’s report "The Role of Hydrogen in Clean Energy Transitions" (2020) further details how green hydrogen can play a crucial role in decarbonizing heavy industries, including steel.

Green Hydrogen: Clean Energy from Water and Renewables

Green hydrogen is produced through the electrolysis of water using renewable electricity, typically from wind or solar. In this process, an electrolyzer splits water (H₂O) into hydrogen (H₂) and oxygen (O₂) using electricity generated by renewable energy. This method results in zero greenhouse gas emissions. Unlike grey hydrogen, produced from fossil fuels with significant CO₂ emissions, and blue hydrogen, which uses carbon capture to reduce emissions, green hydrogen offers a clean, renewable solution, ideal for the effort toward carbon-neutral industrial processes.

With technological advancements such as the Proton Exchange Membrane (PEM) electrolyzer technology, green hydrogen is becoming more efficient and scalable. These advancements are enabling the rapid expansion of green hydrogen production and unlocking new possibilities in steel manufacturing.

The Industrial Power of Hydrogen

In industries such as ammonia, fertilizers, chemicals, and steel, hydrogen plays a vital role but has traditionally been derived from fossil fuels. Shifting to green hydrogen in these sectors would drastically reduce industrial emissions without disrupting operations (International Energy Agency, "The Future of Hydrogen: Seizing Today’s Opportunities," 2019). While today’s total global hydrogen production is around 70 million tons annually, less than 1 million tons of this is green hydrogen, which is produced from renewable energy sources (International Energy Agency, "The Role of Hydrogen in Clean Energy Transitions," 2020). The International Energy Agency (IEA) projects that by 2030, 70 million tons of green hydrogen will be produced annually from renewables (International Energy Agency, "The Role of Hydrogen in Clean Energy Transitions," 2020). This significant increase in green hydrogen production is essential for meeting the IEA’s target of 430 million tons of hydrogen per year by 2050, which is necessary to achieve global decarbonization goals.

What Industrial-Scale Green Hydrogen Needs to Succeed

For green hydrogen to make a significant impact on climate goals, it must be practical and scalable. Ideally, technology should operate reliably in diverse environments, from deserts to coastal areas, and be adaptable to existing industrial sites. Green hydrogen is typically produced on-site to avoid transport and storage challenges, requiring electrolyzers that are durable, compact, and capable of performing in extreme climates (International Energy Agency, "The Role of Hydrogen in Clean Energy Transitions," 2020).

Reinventing Steelmaking with Green Hydrogen

Steel is a major contributor to global CO₂ emissions, with 75% of steel still made using coal-fired blast furnaces, according to the International Energy Agency (IEA). Green hydrogen offers a promising alternative, with the potential to replace coal-fired blast furnaces and significantly reduce CO₂ emissions (International Energy Agency, "The Role of Hydrogen in Clean Energy Transitions," 2020).

Compared to traditional steelmaking, which relies on coke to produce molten iron, the Hydrogen-based Direct Reduction (H-DR) method significantly reduces emissions. The H-DR process works by using green hydrogen as the reducing agent to react with iron ore (Fe₂O₃), producing sponge iron and water vapor as a byproduct. This reaction formula—Fe₂O₃ + 3H₂ → 2Fe + 3H₂O—replaces the carbon-intensive reduction step (Vogl et al., 2018; Journal of Cleaner Production). After the hydrogen-based reduction, the sponge iron is melted using Electric Arc Furnaces (EAFs), which are powered by renewable electricity instead of coal. This process significantly reduces emissions at both the reduction and smelting stages, making it a more sustainable option. Technically, the H-DR process is well-aligned with existing DRI infrastructure, making it easier to retrofit current plants (International Energy Agency, "Hydrogen for Steelmaking," 2021). Hydrogen can be introduced into shaft furnaces commonly used in direct reduced iron (DRI) at high temperatures (around 800–1,050°C), which allows for a relatively straightforward substitution of hydrogen for syngas or natural gas (Vogl et al., 2018; Journal of Cleaner Production). The resulting DRI retains metallurgical properties similar to those produced using fossil fuels, ensuring compatibility with downstream processes like electric arc furnaces (International Energy Agency, "Hydrogen for Steelmaking," 2021).

The Path to Cost-Competitive Green Steel

Despite its promise, transitioning to green hydrogen and green steel production faces significant cost challenges. Green hydrogen is currently more expensive to produce than fossil fuel-derived hydrogen, making green steel less economically competitive. However, companies like Ohmium are now offering cost-competitive PEM electrolyzers, and green hydrogen is expected to become even more cost-efficient in the long term as production scales and technology advances.

Per the World Economic Forum (2022), the green hydrogen and green steel industries face significant challenges, including rapid scaling and overcoming infrastructure and technology hurdles. Widespread adoption of hydrogen-based Direct Reduction (H-DR) would require significant modifications to existing facilities, or the construction of entirely new plants equipped for hydrogen use (International Energy Agency, "Hydrogen for Steelmaking," 2021). While H-DR is technically compatible with Direct Reduced Iron (DRI) shaft furnaces, retrofitting them at scale demands substantial capital and time (Vogl et al., 2018; Journal of Cleaner Production). Additionally, scaling up a reliable green hydrogen supply remains a bottleneck—electrolyzer manufacturing capacity must rapidly expand to meet future industrial demand (International Renewable Energy Agency, "Green Hydrogen: A Guide to Policy Making," 2020).

Despite these challenges, momentum is building. Technological advancements in electrolyzers are improving system efficiency and reducing costs, while innovations in plant design and modular DRI systems are making it easier for steelmakers to begin transitioning incrementally. Market demand is also growing, as companies and consumers seek more sustainable processes and materials.

Ohmium is directly addressing this global green hydrogen supply bottleneck with a vertically integrated approach focused on scalable, cost-effective electrolyzer technology, particularly designed for industrial applications like steelmaking. Ohmium's hyper modular architecture and its plug-and-play solution set it apart from other electrolyzer companies.

Strategic Policy Support for Green Steel

Governments around the world are playing a pivotal role in driving the transformation into green steel. Globally, more than 50 governments have released national hydrogen strategies. Subsidies for low-carbon hydrogen have quadrupled over the past two years, totaling more than $280 billion as of August 2023 (International Energy Agency, "Global Hydrogen Review 2023").

In Europe, Germany’s H2Global initiative is a market-based funding mechanism that helps bridge the price gap between green hydrogen and fossil fuels. Backed by an initial €900 million, it enables long-term purchase agreements to stimulate private investment and accelerate scale-up (German Federal Ministry for Economic Affairs and Climate Action, "H2Global: Market-based Funding Mechanism for Green Hydrogen," 2023). Additionally, the United Kingdom has launched Project HySpeed, a £6.5 billion initiative to develop one gigawatt of hydrogen production capacity by 2030, supporting the UK’s broader goal of reaching ten gigawatts of low-carbon hydrogen by the same year (UK Government, "Project HySpeed: Hydrogen Production Capacity," 2023).

In India, the National Green Hydrogen Mission, launched in 2023 with a budget of ₹19,744 crore (approximately $2.3 billion), provides targeted incentives for green hydrogen production and industrial decarbonization, including pilot projects in steel (Ministry of New and Renewable Energy, Government of India, "National Green Hydrogen Mission," 2023).

In the MENA region, the United Arab Emirates has emerged as a green hydrogen frontrunner with its National Hydrogen Strategy, launched in 2023. The strategy targets 1.4 million tons of low-carbon hydrogen annually by 2031, with key applications in green steel, heavy industry, and exports (UAE Ministry of Energy and Infrastructure, "National Hydrogen Strategy," 2023).

These concerted efforts across industry and governments are helping to accelerate innovation, attract private investment, and create the conditions needed for green steel to become cost competitive. With the right support and continued progress, the steel sector can move from being one of the largest carbon emitters to a leader in industrial decarbonization.

Building the Future of Low-Carbon Steel

Green hydrogen can be a swift enabler for decarbonizing the steel industry, but its success depends on reliable, scalable, and cost-effective technology. Ohmium cutting-edge PEM electrolyzers are built to meet this challenge. Their hyper modular design allows for incrementally scalable production, optimizing generation with dynamic ramping based on demand. Additionally, their production efficiency, high plant availability, and built-in redundancy can generate more hydrogen with less energy.

By making green hydrogen production more flexible, efficient, and resilient, Ohmium is helping steelmakers accelerate their transition to lower-carbon operations. For instance, Ohmium’s modular approach has been shown to reduce capital expenditure and operational costs, while maintaining high output and reliability. Strengthening sustainability in the steel industry requires practical innovation, and Ohmium’s advanced PEM technology has the potential to be a key enabler in achieving this goal.

To learn more about green hydrogen and how it can support your energy transition efforts, contact us at hello@ohmium.com.

‍

References:

1. World Steel Association, "Steel and Climate Change" (2023) Link
2. Metal World Insight, "Steel Production and Employment" (2021) Link
3. World Economic Forum, "The Future of Hydrogen" (2022) Link
4. World Economic Forum, "Shaping the Future of Energy" (2016) Link
5. International Energy Agency, "Hydrogen for Steelmaking" (2021) Link
6. International Energy Agency, "The Role of Hydrogen in Clean Energy Transitions" (2020) Link
7. International Energy Agency, "Net Zero by 2050: A Roadmap for the Global Energy Sector" (2021) Link
8. Vogl, W., et al. (2018). "Hydrogen-based Direct Reduction of Iron Ore." Journal of Cleaner Production Link
9. International Renewable Energy Agency, "Green Hydrogen: A Guide to Policy Making" (2020) Link    
10. German Federal Ministry for Economic Affairs and Climate Action, "H2Global: Market-based Funding Mechanism for Green Hydrogen" (2023) Link
11. UK Government, "Project HySpeed: Hydrogen Production Capacity" (2023) Link
12. Ministry of New and Renewable Energy, Government of India, "National Green Hydrogen Mission" (2023) Link
13. UAE Ministry of Energy and Infrastructure, "National Hydrogen Strategy" (2023) Link

‍

‍

‍

‍

‍

‍

‍

‍