Hydrogen-Based Steel Production: Technical Developments in Japan and Australia
The global steel industry is undergoing a profound transformation, driven by the need to reduce CO? emissions. Hydrogen-based steel production is emerging as a central technology in this transition, with Japan and Australia leading the way. Both nations are heavily investing in hydrogen direct reduction (HDR), a process that replaces traditional coal-based methods of iron reduction with hydrogen. This shift is not only technologically challenging but also crucial in achieving carbon neutrality by 2050.
Japan: Nippon Steel’s Development of Hydrogen Direct Reduction
Japan’s steel industry, led by Nippon Steel Corporation, is among the largest in the world, historically reliant on the blast furnace-basic oxygen furnace (BF-BOF) method, where carbon from metallurgical coal reduces iron ore to iron, releasing substantial amounts of CO?. Hydrogen direct reduction (HDR) offers an alternative by using hydrogen as the reducing agent, thereby producing water vapor instead of CO? as a byproduct.
Nippon Steel’s investment in hydrogen-based steelmaking is significant. The company is developing pilot plants to demonstrate the feasibility of HDR at industrial scale, part of a larger initiative supported by the Japanese government’s Green Innovation Fund, which has allocated over $19 billion to hydrogen-related projects, including steel production. These investments are critical as Japan seeks to achieve carbon neutrality by 2050, with large-scale hydrogen steel production set to commence by 2030.
A key project in Japan’s hydrogen strategy is COURSE50 (CO? Ultimate Reduction in Steelmaking Process by Innovative Technology for Cool Earth 50). This initiative is a collaborative effort between Nippon Steel and other major Japanese steelmakers like JFE Steel. COURSE50 aims to reduce CO? emissions in the steelmaking process by 30-40% by injecting hydrogen into existing blast furnaces as a transitional step before fully adopting HDR. The project focuses on adapting current BF-BOF infrastructure to accommodate hydrogen, which will be sourced through electrolysis powered by renewable energy.
Technically, HDR operates through the Midrex or HYL (Energiron) process, where iron ore pellets or lumps are exposed to a reducing gas stream composed of hydrogen. In the Midrex process, the gas moves counter-current to the iron ore bed in a vertical shaft furnace, leading to efficient iron reduction. Hydrogen dissociates into atomic hydrogen, which reduces the iron ore (Fe?O?) to iron (Fe).
This process results in zero direct CO? emissions, though upstream emissions from hydrogen production, transport, and storage must also be minimized for a fully carbon-neutral system.
Australia: Green Hydrogen as a Decarbonization Tool for Steel
Australia, unlike Japan, benefits from vast renewable energy resources, particularly in solar and wind energy, enabling the country to produce green hydrogen—hydrogen generated via electrolysis using renewable electricity. Green hydrogen is essential for Australia's ambition to decarbonize its steel production sector and develop export capacities for hydrogen.
The Asian Renewable Energy Hub, located in Western Australia, exemplifies Australia’s commitment to green hydrogen production. This massive project, set to produce 1.75 million tons of green hydrogen annually, positions Australia as a global leader in hydrogen exports. The hub’s potential impact on the steel industry is significant, as green hydrogen from the project can replace coal-based reductants in both domestic steel production and international supply chains.
Australian steelmakers are also advancing hydrogen-based steel production. BlueScope Steel, Australia’s largest producer, is exploring the feasibility of using green hydrogen at its Port Kembla Steelworks. Partnering with the Commonwealth Scientific and Industrial Research Organisation (CSIRO), BlueScope is working on decarbonizing its operations by incorporating hydrogen into steelmaking. Specifically, the company is investigating hydrogen use in the Electric Arc Furnace (EAF) process, which is already less carbon-intensive than BF-BOF due to its reliance on recycled steel and electricity.
Australia's strategic focus is further underscored by government initiatives, including the National Hydrogen Strategy, which allocates over $1.4 billion towards hydrogen projects. This funding supports both the domestic transition to hydrogen steel production and Australia’s ambition to become a top-three global hydrogen exporter by 2030.
Hydrogen Steelmaking: Economic and Technical Challenges
Despite the promise of hydrogen-based steel production, significant challenges remain, particularly concerning the economic viability of green hydrogen. Current production costs of green hydrogen range from $3 to $6 per kilogram, whereas experts estimate that hydrogen needs to be produced at $1.50 to $2 per kilogram for hydrogen steelmaking to compete with coal-based blast furnaces. The cost is driven by the high energy intensity of electrolysis and the capital expenditure required for renewable energy infrastructure.
In addition, hydrogen poses technical challenges in steelmaking. Hydrogen has a lower density and different thermodynamic properties compared to carbon-based reducing agents, impacting reactor design and operational efficiency. For instance, hydrogen’s lower temperature in the reduction process compared to carbon leads to reduced heat transfer within the shaft furnace, which must be compensated for by integrating additional heat sources or optimizing reactor design.
Furthermore, hydrogen storage and transportation infrastructure is underdeveloped, presenting another barrier to scaling hydrogen steel production. Hydrogen is difficult to store due to its low energy density by volume, requiring either high-pressure tanks or cryogenic liquefaction. Both solutions involve additional energy use, which could offset some of the environmental benefits of hydrogen-based steel production.
Case Histories and Industry Examples
1. Kimitsu Works (Nippon Steel): Nippon Steel’s Kimitsu Works facility is at the forefront of hydrogen-based experimentation. As part of the COURSE50 initiative, this plant integrates hydrogen into existing blast furnaces, providing valuable data on how hydrogen can be utilized in current production lines while planning a transition to full HDR.
2. Fortescue Metals Group (FMG): Fortescue, one of Australia’s largest iron ore miners, has entered the green hydrogen race with a plan to build a green hydrogen plant in Queensland. This facility is designed to produce hydrogen for both steel production and export, helping Fortescue reduce its own carbon footprint and enter the global hydrogen market.
3. ArcelorMittal Hamburg: Though outside Japan and Australia, ArcelorMittal’s plant in Hamburg, Germany, is significant for being the first large-scale DRI plant to use 100% hydrogen in its reduction process. The success of this plant serves as a model for hydrogen-based steel production worldwide, offering key technical insights for other hydrogen steelmaking projects.
Conclusion: Technical Trajectory of Hydrogen-Based Steel
The technological development of hydrogen-based steel production in Japan and Australia signals a major shift in how steel will be produced in a carbon-constrained world. With large-scale pilot projects, government funding, and technical innovations in green hydrogen and direct reduction, both nations are pushing the boundaries of steelmaking technology.
While hydrogen production costs and infrastructure challenges remain, the commitment from governments and industries in Japan and Australia to hydrogen steelmaking provides a clear path towards commercializing low-carbon steel by 2030. As hydrogen production technology advances and costs decline, hydrogen direct reduction has the potential to become a mainstream process for the global steel industry.
Luigi Villani is the owner of GTG Consulting and specializes in analyzing industrial trends in materials science. For more insights, visit www.gtgcons.com.