December 12, 2022 • Paul Rodden • Season: 2022 • Episode: 171
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In episode 171, Green steel is becoming a hyper buzzword in the hydrogen market. Today we’ll discuss how one Swedish steel company has made the switch to hydrogen, and how that could affect all other steel manufacturers around the world. All this on today’s hydrogen podcast.
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Green steel is becoming a hyper buzzword in the hydrogen market. Today we’ll discuss how one Swedish steel company has made the switch to hydrogen, and how that could affect all other steel manufacturers around the world. All this on today’s hydrogen podcast.
So the big questions in the energy industry today are, how is hydrogen the primary driving force behind the evolution of energy? Where is capital being deployed for hydrogen projects globally? And where are the best investment opportunities for early adopters who recognize the importance of hydrogen? I will address the critical issues and give you the information you need to deploy capital. Those are the questions that will unlock the potential of hydrogen, and this podcast will give you the answers. My name is Paul Rodden, and welcome to the hydrogen podcast.
In an article in the scientific american.com Davide Castelvecchi writes how the hydrogen revolution can help save the planet and how it can’t. The author writes, The White Hot river of liquid iron never stops. Every hour of the day and night at this steel plant in Sweden’s Far North. The metal pours out of a hole at the bottom of a massive 90 meter tall blast furnace, equally relentless a stream of carbon dioxide belches out of the top. The co2 is a waste product of a coal that the blast furnace devours. For every tonne of iron that will go to make steel this furnace produces 1.6 tons of co2. This according to Martin Pei Chief Technology Officer at SSAB, the company that owns the plant here in the Luleå, the world has hundreds of similar blast furnaces, most of them with larger emissions, add other energy intensive steps in the industry.
And it becomes clear how steelmaking causes 7% of the world’s greenhouse gas emissions comparable to the exhaust from all the world’s passenger vehicles combined. This according to some estimates, but a few 100 meters away from the Luleå furnace is a smaller one that makes iron with much less carbon pollution. This pilot technology replaces coal with hydrogen and releases only water vapor and a quote from Pei. He says this is the new way to make steel and with this, we can in principle eliminate all the carbon dioxide. The hydrogen to steel route isn’t entirely pollution free. Other steps in converting iron to steel still emit some co2, and the iron ore must be mined. Still, last year, this site produced the world’s first green steel with the aid of hydrogen that was made using Sweden’s abundant low carbon electricity generated from hydropower, nuclear and wind. The pilot plant is owned by HYBRIT, a joint venture that SSAB formed in 2016 with Swedish utility company Vattenfall and LKAB, the national mining company.
Making Green steel is just one of the ways that hydrogen is now expected to help decarbonize the world’s economy. Although some have touted hydrogens use as a transportation fuel, it’s unlikely to have much impact in that sector or in heating. Rather, hydrogens biggest contribution will be to clean up industrial processes from producing plastics and fertilizers to refining hydrocarbons. These industries have conventionally been thought of as harder to decarbonize and have received less attention from the media investors and policymakers. Hydrogen might find uses in energy production too liquid fuels made from hydrogen might one day power, air travel and shipping. And hydrogen could even help decarbonize the electricity grid, access solar or wind power could be diverted into making the gas which could then be used in other industrial processes or simply to store energy. In this way, hydrogen is expected to act as a bridge between many different sectors of the economy. Now right now, this article goes into talking about some of the other different kinds of hydrogen and how they’re made. But I would like to skip that and focus more on hydrogen current involvement in the steel processing in Sweden.
And so the article continues by saying of all the industries carbon skewers steel is one of the largest and it is the sector where hydrogen could have the biggest impact. People had tried to use hydrogen in the process for years this is going to Pei but couldn’t get it to scale up but in 2016, right around the time when most countries signed the Paris Climate Agreement, pledging to keep global warming to less than two degrees Celsius above pre industrial levels. Pei began to spearhead hydrogen research at SSAB it was clear that decarbonizing steel was crucial for Sweden to meet its Paris agreements. SSAB is not a major steel producer, yet, it alone accounts for 10% of Sweden’s co2. The hardest problem with making steel is that it involves extracting iron from iron ore, which is essentially rust containing iron in an oxidized form. In a blast furnace oxygen atoms are stripped away from the rust, leaving liquid iron behind. To do this or is melted together with Coke, a derivative of coal or with charcoal.
The main function of this fuel is not actually to melt the ore but to grab oxygen atoms from it in a chemical reduction process that has a thermodynamic cost more than six times greater than that of melting the rock. This process leads to the release of vast amounts of co2 SSAB considered ideas such as capturing the emitted co2 and storing it underground, but concluded that it would be too expensive. Instead, it chose the hydrogen pathway, hydrogen can diffuse inside pellets of solid iron ore and remove oxygen and a process called direct reduction of iron ore DRI, which takes place at 600 degrees Celsius, instead of the more than 1500 degrees Celsius have a blast furnace. HYBRIT’s Luleå trials are so successful that SSAB decided to move forward the date to shut down its blast furnaces from 2045 to 2030. This again according to Pei. HYBRIT is building its first full size plant in Galavan, a town 200 kilometers north of Lulea, and has made the results of its research publicly available, hoping to create momentum for the whole industry. This again according to Pei. Half an hour’s drive from Lulea. A Stockholm based startup company called H2 Green Steel has broken ground for an even larger plant, and says it has sold one and a half million tons of its product in advance. Because smelters last for decades.
Energy analysts say that if nations are to meet the goals of the Paris accord, the steel industry should immediately stop building new blast furnaces and instead, begin replacing them with hydrogen ready, direct reducers. Even if most initially use natural gas, they will be able to gradually wind down their carbon footprint while hydrogen supply ramps up over the next three decades. And can now I want to pull away from the article again here because this is a very important point. This is a micro example of what needs to be done to initiate the right kind of transition to a cleaner future. By implementing hydrogen ready equipment, you can begin that transition from coal based into natural gas and then down the road even more into hydrogen. Now back to the article many steel makers are taking in the DRI route. Although in China and India, new blast furnaces are being planned according to the nongovernmental organization, Global Energy Monitor, also in San Francisco. The task is so immense, however, that some organizations including Bloomberg Nef forecasts that some blast furnaces will still be active at mid century, and that carbon capture will have to be deployed to help reduce their emissions. Okay, so some good upside coming in this article.
And a follow it up I’d like to talk a little bit about a press release that came out just a couple of days ago from SSAB. It says hybrid technology and the pure waste that comes for it paints a positive picture of a society finally moving away from hydrocarbons, making SSAB steel production process the norm and will help combat the climate change crisis. SSAB is hybrid technology has proven it’s possible to produce steel on a large scale with virtually no co2, which will have less consequences on the environment is an undeniable giant leap forward to create a significant reduction in steals carbon emissions. Every major player in the industry needs to emulate the same process. That’s why SSAB has applied for a portfolio of patents for the hybrid process so that the technology can be shared with the world. Again, in a quote from Pei, the world is at a precipice of climate change. We have proven that there is a functioning technology to make hydrocarbon free steel, but we cannot change the entire industry ourselves. Others need to act quickly. Also to keep the Paris Agreement goals alive. He says that he hopes that their colleagues in the industry will seize this chance to transform our sector from a climate villain into a climate hero.
SSAB wants to support and inspire steel manufacturers on their journey towards zero emissions, drastically reduced greenhouse gas emissions and supporting customers to build an entirely hydrocarbon free chain along the way. This new process will also support businesses by fulfilling demands from investors and legislators and to avoid the high cost connected to carbon taxes. SSAB also wants to support users to demand more environmentally friendly policies and steel production and reduce their own carbon footprints through the electrification of machines and vehicles and solar heating holdings hydrocarbon free fuel as a multi layered solution. SSAB will offer hydrocarbon free steel to the market in 2026. The knowledge sharing platform is available at a website that we will put in the description below. It is a living platform where much of the information will be available during the coming months, and years.
In addition, it is possible to propose additional content and to consult SSAB and experts again in a website that we will post in the description of this podcast. Okay, so a very real example of a hard to abate sector starting to utilize hydrogen and their day to day processes and showing that they can be economic in doing so. And it looks like everyone else is jumping on board. The US is currently proposing a green steel club that would levy tariffs on outliers not producing steel with hydrogen. Oman has recently invested $3 billion in a green steel factory. And according to AES off analytics, the green steel market is projected to display a significant growth represented by a compound annual growth rate of 85.8%, between 2021 and 2031. And also Well, I know that steel is going to be the primary focus for hard to abate industries for hydrogen, there are so many other industries that have to use that high heat, or hydrogen can be used in place of coal, and then further down the line as new factories continue to be built. Using hydrogen ready equipment, hydrogen can then begin to take place of natural gas in those lines.
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