Green steel: design and cost analysis of hydrogen-based direct iron reduction

Abstract

Hydrogen-based direct reduced iron (H₂-DRI) is an alternative pathway for low-carbon steel production. Yet, the lack of established process and business models defining “green steel” makes it difficult to understand what the respective H₂ price has to be in order to be competitive with commercial state-of-the-art natural gas DRI. Given the importance of establishing break-even H₂ prices and CO₂ emission reduction potentials of H₂-DRI, this study conducted techno-economic analyses of several design and operation scenarios for DRI systems. Results show that renewable H₂ use in integrated DRI steel mills for both heating and the reduction of iron ore can reduce direct CO₂ emissions by as much as 85%, but would require an H₂ procurement cost of $1.63 per kg H₂ or less. When using H₂ only for iron ore reduction, economic viability is reached at an H₂ procurement cost of $1.70 per kg, while achieving a CO₂ emission reduction of 76% at the plant site. System design optimization strategies around excess H₂ ratios in the DRI top gas and the H₂ recycle pressurization can further improve performance and economics. Low H₂ excess ratios are particularly attractive as they reduce pre-heating energy requirements and offer integration opportunities with static recycle ejectors if H₂ is supplied at sufficiently high pressure. The potential of utilizing the electric arc furnace off-gas is shown to be much more synergistic with H₂-DRI than natural gas-DRI and can increase the break-even H₂ procurement cost by up to 7¢ per kg H₂. Such findings are critical for setting technical performance criteria for H₂ supply and storage in the iron and steel sector.