Rethinking steelmaking: zero-emissions and flexibility with hydrogen direct reduction

Panel: 2. Sustainable production towards a circular economy

Authors:
Valentin Vogl, Lund University, Sweden
Max Åhman, Environmental and Energy Systems Studies, Lund University, Sweden
Lars J. Nilsson, Environmental and Energy Systems Studies, Lund University, Sweden

Abstract

The steel industry faces the big challenge of reducing its CO2 emissions to zero and breakthrough technologies are needed alongside efficiency and demand reduction measures in order to meet decarbonisation goals (Lechtenböhmer et al (2016), Worrell and Carreon (2017), Fischedick et al (2014)). Several European R&D projects are now looking into the possibility of using hydrogen for steel production. In Sweden the HYBRIT initiative aims at developing an entire fossil-free value chain for steel on the basis of hydrogen direct reduction (H-DR) and electrolysis.

Hydrogen direct reduction is a relatively unexplored process. The principle behind H-DR is to operate a natural gas based direct reduction with hydrogen from electrolysis instead, a changeover which has not been demonstrated industrially up to now. We analyse the energy efficiency and energy demand of the H-DR process and discuss the consequences for business opportunities and energy system integration. We use a previously developed chemical process model to evaluate different operational strategies.

We show that hydrogen-based steelmaking requires less energy than the incumbent blast furnace route, but instead of coal, oil and natural gas the process is based on electricity and renewable heat. The electrolyser is the largest energy consumer in the process, which makes its efficiency a crucial parameter for both energy efficiency and production cost. In addition we highlight several parts of the process which require high-temperature heat, which should be supplied from renewable sources to be in line with the Paris accord.

Our results show that H-DR can be competitive with the blast furnace at today’s electricity prices plus a carbon price of 50 €/tCO2. The main driver of production cost is electricity cost. The H-DR process is highly flexible because it bridges ore-based and scrap-based steelmaking. Furthermore, the storage of hydrogen and hot-briquetted iron enables a continuous steel output while reducing the load in parts of the process. The high degree of flexibility can be used by steelmakers to adapt to developments in the markets for electricity, scrap and iron ore by engaging in grid balancing services and active participation in electricity markets. Thus, hydrogen steelmaking opens doors to new business areas and intensified integration of the steel industry into the energy system.

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