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

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” make 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 EAF off-gas is shown to be much more synergistic with H2 DRI than NG 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.