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Global trade of green iron as a game changer for a near-zero global steel industry? - A scenario-based assessment of regionalized impacts

Bilici, Süheyb ; Holtz, Georg ; Jülich, Alexander ; König, Robin ; Li, Zhenxi LU ; Trollip, Hilton ; Call, Bryce Mc ; Tönjes, Annika ; Vishwanathan, Saritha Sudharmma and Zelt, Ole , et al. (2024) In Energy and Climate Change 5.
Abstract

The currently most promising approach for reducing CO2 emissions of the global steel production is reducing iron ore in shaft furnaces with (green) hydrogen instead of blast furnaces. Unlike to the liquid iron produced in blast furnaces, the direct reduced iron produced in this route (green iron) exists in a solid state and can be transported at reasonable costs over long distances. This allows for spatial decoupling of the iron reduction step from the steelmaking step and may lead to global trade in green iron as a new intermediate product in the steelmaking value chain. This article assesses the potential impact of a global green iron trade in terms of shifting energy demand between regions and in terms of cost savings by... (More)

The currently most promising approach for reducing CO2 emissions of the global steel production is reducing iron ore in shaft furnaces with (green) hydrogen instead of blast furnaces. Unlike to the liquid iron produced in blast furnaces, the direct reduced iron produced in this route (green iron) exists in a solid state and can be transported at reasonable costs over long distances. This allows for spatial decoupling of the iron reduction step from the steelmaking step and may lead to global trade in green iron as a new intermediate product in the steelmaking value chain. This article assesses the potential impact of a global green iron trade in terms of shifting energy demand between regions and in terms of cost savings by comparing three scenarios for a global near-zero GHG steel industry: The Domestic scenario, assuming strict regional co-location of green iron and steel production; The Max Trade scenario, assuming early emergence of a global green iron market and the Intermediate Trade scenario, assuming late emergence of a global green iron market. In the trade scenarios, 12-21% of global crude steel is produced from traded green iron in 2050. 15-26 Mt/a of hydrogen consumption is relocated to global “sweet spots”, resulting in cost savings of 2.2-3.9% of the global annual steel production costs, which can provide important support for the development of net zero steel production. Enablers and barriers for global green iron trade are discussed.

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publication status
published
subject
keywords
Climate change mitigation, Global steel decarbonization, Green iron trade, Hydrogen direct reduction, Scenario analysis
in
Energy and Climate Change
volume
5
article number
100161
publisher
Elsevier
external identifiers
  • scopus:85206206260
DOI
10.1016/j.egycc.2024.100161
language
English
LU publication?
yes
id
22a70d42-428f-4871-8aac-13d6af1ac568
date added to LUP
2024-11-27 09:48:52
date last changed
2025-04-04 15:24:59
@article{22a70d42-428f-4871-8aac-13d6af1ac568,
  abstract     = {{<p>The currently most promising approach for reducing CO<sub>2</sub> emissions of the global steel production is reducing iron ore in shaft furnaces with (green) hydrogen instead of blast furnaces. Unlike to the liquid iron produced in blast furnaces, the direct reduced iron produced in this route (green iron) exists in a solid state and can be transported at reasonable costs over long distances. This allows for spatial decoupling of the iron reduction step from the steelmaking step and may lead to global trade in green iron as a new intermediate product in the steelmaking value chain. This article assesses the potential impact of a global green iron trade in terms of shifting energy demand between regions and in terms of cost savings by comparing three scenarios for a global near-zero GHG steel industry: The Domestic scenario, assuming strict regional co-location of green iron and steel production; The Max Trade scenario, assuming early emergence of a global green iron market and the Intermediate Trade scenario, assuming late emergence of a global green iron market. In the trade scenarios, 12-21% of global crude steel is produced from traded green iron in 2050. 15-26 Mt/a of hydrogen consumption is relocated to global “sweet spots”, resulting in cost savings of 2.2-3.9% of the global annual steel production costs, which can provide important support for the development of net zero steel production. Enablers and barriers for global green iron trade are discussed.</p>}},
  author       = {{Bilici, Süheyb and Holtz, Georg and Jülich, Alexander and König, Robin and Li, Zhenxi and Trollip, Hilton and Call, Bryce Mc and Tönjes, Annika and Vishwanathan, Saritha Sudharmma and Zelt, Ole and Lechtenböhmer, Stefan and Kronshage, Stefan and Meurer, Andreas}},
  keywords     = {{Climate change mitigation; Global steel decarbonization; Green iron trade; Hydrogen direct reduction; Scenario analysis}},
  language     = {{eng}},
  publisher    = {{Elsevier}},
  series       = {{Energy and Climate Change}},
  title        = {{Global trade of green iron as a game changer for a near-zero global steel industry? - A scenario-based assessment of regionalized impacts}},
  url          = {{http://dx.doi.org/10.1016/j.egycc.2024.100161}},
  doi          = {{10.1016/j.egycc.2024.100161}},
  volume       = {{5}},
  year         = {{2024}},
}