Материал: The_Future_of_Hydrogen-IEA-2020

37 This does not account for emissions from captive utilities or subsequent uses of WAG, nor indirect emissions associated with centralised power generation. These, and several other factors, can substantially influence the emissions intensity.

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to produce steel (SIDERWIN, 2019). Boston Metal is a start-up venture that has recently attracted USD 20 million of investment to continue developing its molten oxide electrolysis process for producing a variety of metals (Boston Metal, 2019). Both of these processes utilise electricity directly for reduction, avoiding the need to produce hydrogen.

Ironmaking with ammonia. In Japan researchers have demonstrated the reduction of haematite (a constituent of iron ore) with ammonia at laboratory scale (Hosokai et al., 2011). If it can be demonstrated at commercial scale, this route could facilitate steel production in areas remote from those in which hydrogen (and ammonia) can be produced cheaply via lowcarbon pathways.

CO2 management pathways

HIsarna. Developed during the Ultra-Low Carbon Dioxide Steelmaking (ULCOS) research project funded by the European Union and several large steel producers, HIsarna is a demonstration-phase process for producing steel with significant potential for emissions reductions, especially if equipped with CCUS (HIsarna, 2019). The technology employs an upgraded smelt reduction process that processes iron ore in a single step, negating the need for coke ovens and agglomeration processes. Greenfield commercial plants could be available within 10 years of the completion of the current demonstration project.

DRI with CCUS. Al Reyadah, a wholly-owned subsidiary of Abu Dhabi National Oil Company, is capturing CO2 from a commercial-scale DRI-EAF plant operated by Emirates Steel (Al Reyadah, 2017). This post-combustion capture approach involves a chemical separation process that is more energy-intensive than that employed in the HIsarna process design, but benefits from the fact that the technology can be applied to existing equipment.

Chemicals from WAG. Several large pilot projects utilise the H2, CO and CO2 in WAG for various purposes. The climate benefit of these initiatives depends on the counterfactual considered, were they not to be used. The projects offer a variety of avenues to utilise a vast stock of existing steelmaking assets. Key examples include the public-private Carbon2Chem and Steelanol projects in Europe.

COURSE 50. This Japanese Iron and Steel Federation initiative seeks to raise the proportion of hydrogen used as a reduction agent in the BF-BOF route and to capture CO2 streams from blast furnace gas, with a full-scale demonstration planned in the 2030s (COURSE 50, 2019). The hydrogen is sourced from enriched and treated WAG streams. Together these modifications could lead to a 30% reduction in CO2 emissions per unit of steel produced.

Sources: HYBRIT (2019), “HYBRIT – towards fossil-free steel”; SALCOS (2019), “Project overview”; H2FUTURE (2019), “Production of green hydrogen”; GrInHy (2019), “Project overview”; SIDERWIN (2019), “Development of new methodologies for industrial CO2-free steel production by electrowinning”; Boston Metal (2019), “We transform dirt to metal very efficiently”; Hosokai et al. (2011), “Ironmaking with ammonia at low temperature”, Environmental Science & Technology; HIsarna (2019), “HIsarna: Game changer in the steel industry”; COURSE 50 (2019), “CO2 ultimate reduction in steelmaking process by innovative technology for cool earth 50”.

If, instead of following current trends, an alternative pathway were to be followed that aligns the future development of the energy sector with the goals of the Paris Agreement, the outlook for hydrogen demand and production in the sector could be very different. In such a pathway, the share of scrap recycling in total steel production is projected to grow more rapidly, from 23%

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38 “CO2 emissions free” is not the same as being “carbon free”. Some carbon will continue to be required in the process of steelmaking, as it is a key chemical constituent of the final material.

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The Future of Hydrogen Chapter 4: Present and potential industrial uses of hydrogen

Figure 45. Energy implications of fulfilling hydrogen demand via the DRI-EAF route

Notes: Only the energy and hydrogen requirements for the commercial coal/gas-based and 100% hydrogen-based DRI-EAF routes are included. Demand figures are consistent with a scenario in which the goals of the Paris Agreement are achieved, including the implementation of materials efficiency strategies and maximum deployment of the secondary production route. Average hydrogen requirements for both the gasand 100% hydrogen-based DRI-EAF routes are assumed in calculating the hydrogen requirements and energy inputs. Bubbles denoting energy and hydrogen requirements are sized on an LHV energy content basis. The hydrogen and energy quantities are equivalent, and not additive. 95% DRI charge to the EAF is assumed in all cases. Current DRI-EAF facilities often operate with a higher share of scrap, as this lowers costs. More information on the assumptions is available at www.iea.org/hydrogen2019.

Source: IEA 2019. All rights reserved.

While the role of hydrogen could expand dramatically in the medium to long term, gas would continue to play an important role even after 2030 while the shift took place.

Cost competitiveness of cleaner pathways

In the absence of sufficiently high CO2 prices to trigger a switch to low-carbon hydrogen, replacing unabated natural gas with renewable hydrogen in the DRI-EAF route would widen the difference in cost between the commercial DRI-EAF and BF-BOF routes (Figure 46). Energy and other raw material input costs represent upwards of about 45% of production costs for the DRI-EAF routes, so small price differences can make a big difference to cost competitiveness. Whereas the range of gas prices today makes the commercial DRI-EAF route competitive with the BF-BOF route in specific instances, the hydrogen-based DRI-EAF route, based on current estimates of key technology parameters, would only be competitive in those places with the lowest electricity prices. It would also be significantly more expensive than its natural gas-based counterpart (15–90% more), even if natural gas production involved CCUS (10–85% more).

Among the other low-emissions pathways for steel production currently being explored, the “oxygen-rich smelt reduction BOF with CCUS” (HIsarna) route appears to have the lowest overall production costs in most regions in the current energy price context. According to the limited techno-economic information currently available in the public domain, it is less capital-intensive even than today’s commercial BF-BOF route, and could reduce direct CO2 emissions by around 80–90%. In most regions, the family of “CO2 management” pathways tends to be at a more advanced stage of development today. In the context of a long-term Paris-compatible pathway, however, the HIsarna design would have to be deployed in conjunction with a widespread CO2 transport and geological CO2 storage infrastructure.

Another key consideration, which is not explored in Figure 46, is the stock of existing capacity. Despite recent efforts to decommission underutilised assets, the steel industry still

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suffers from overcapacity, and the market remained fragile in 2018 (OECD, 2019). Furthermore, the BF-BOF route accounts for around 90% of existing primary capacity, an asset class in which steel producers are generally not anticipating substantial greenfield investments in the coming years. With many facilities utilising this technology having been constructed in the past 10–20 years, it is going to be difficult for new alternative production routes to outcompete them without policy intervention. These dynamics underpin the development of CO2 management pathways (Box 10), which generally seek to reduce emissions while making use of existing integrated steel facilities. HIsarna is an exception to this as it requires greenfield investment.

To compete in the long term with its natural gas-based counterpart equipped with CCUS, the 100% hydrogen-based pathway currently looks likely to need low-carbon electricity prices in the range of USD 5–35/MWh (Figure 47). This translates into hydrogen costs of USD 0.7– 2.0/kgH2, assuming electrolysers with high efficiencies and low CAPEX requirements. As discussed in Chapter 2, these costs may be realistic in certain regions when using dedicated low-cost renewable resources, but are challenging to achieve elsewhere. Moreover, regions with low-cost renewables resources may involve extra costs if they are not endowed with sufficient reserves of iron ore and other materials, and if they are located far from centres of demand.

Figure 46. Estimated costs of steel for selected greenfield production routes in 2018

Notes: Oxy. SR-BOF = oxygen-rich smelt reduction. CCUS costs includes the costs of capturing, transporting and storing CO2. Range refers to the range of total levelised costs across regions, with the lower end of the range disaggregated for each technology. An availability factor of 95% is applied to all equipment and an 8% discount rate is used throughout. It is assumed that the electrolysis route is supplied with 100% renewable electricity. Natural gas-based and 100% hydrogen-based DRI-EAF considers 95% DRI charge to the EAF. More information on the assumptions is available at www.iea.org/hydrogen2019.

Source: IEA 2019. All rights reserved.

The hydrogen-based DRI-EAF route is between 10% and 90% more costly than its natural gas-based counterpart, and is highly sensitive to the cost of electricity.

From a policy perspective, there are two key areas where support is needed to bolster the sustainable adoption of hydrogen as a reduction agent in the iron and steel sector. First, support is needed for demonstration projects that seek to scale up the 100% hydrogen-based DRI-EAF process; this could, for example, take the form of access to low-cost financing for increasing scales of demonstration, and funding to supporting the specific aspects of research and development (R&D) required to accelerate development.

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