Is green hydrogen China’s answer to steel mill carbon emissions?
- Major steelmakers are adopting green hydrogen, setting up expensive experiments and pilot facilities
- However, to scale up its production and use, government support will be crucial
Last year was China’s second-hottest year on average, according to the country’s annual climate bulletin released earlier this month. Average temperatures last spring, summer and autumn were the highest since records began.
The challenge for steelmakers, however, is that the more prevalent this method of production becomes, the higher the demand for high-quality scrap, which is only available in certain regions to begin with, driving up the cost of steel production.
Yet, if green hydrogen can be produced on an industrial scale, it can play a crucial role in lowering the steel industry’s carbon emissions. And this is precisely what Chinese steelmakers hope to achieve.
Of China’s six world-leading steelmakers, half have started investing in green hydrogen technologies to decarbonise their production. Earlier this month, Baowu Steel began construction on a new, green-hydrogen-fuelled EAF in Zhanjiang, Guangdong province. The project is expected to be completed by the end of the year, and will be the steelmaker’s first zero-carbon furnace.
This comes after it unveiled in November 2021 a Global Low-Carbon Metallurgical Innovation Alliance and a fund to put US$5.5 million annually towards low-carbon metallurgy research, including on hydrogen. The alliance is a force to be reckoned with – it consists of more than 60 members from 15 countries, including steelmakers ArcelorMittal and Shougang Group, as well as miners BHP Group and Rio Tinto Group.
Last December, steelmaker HBIS Group completed the first phase of its hydrogen metallurgy demonstration project – a world first – in Zhangjiakou, the hydrogen energy pilot city in Hebei province. And last September, Ansteel Group, another prominent Chinese steelmaker, announced a technological breakthrough in using green hydrogen in the steelmaking process, a pioneering low-carbon technique from which Ansteel could potentially profit for years.
Yet despite these encouraging developments, the road ahead is likely to be treacherous. This is mainly because the technology of green-hydrogen-based steelmaking is still immature and costly. So high levels of investment are needed to scale up production and encourage adoption.
On the other hand, experts estimate that China could save nearly US$2 trillion between 2020 and 2060 by turning to green hydrogen instead of other clean energy solutions to achieve industrial carbon neutrality. The cost of renewable electricity is also falling, making it cheaper to produce green hydrogen – and enhancing the potential to scale it up.
As China leads the way, a ‘hydrogen society’ may get closer to reality
What is certain is that, given the sheer size of Chinese steelmakers, how they “green” their production will have profound implications for China’s transition to a low-carbon economy. And the pace of their decarbonisation over the coming decades will be critical to the global battle to arrest climate change.
Chin Hsueh is a Master of Science in Foreign Service candidate at Georgetown University. He previously served as a policy analyst at the Kuomintang’s Department of International Affairs and as a corporate affairs intern at the US-Taiwan Business Council