According to UK based research firm’s recent reports by IDTechEx [1], Hydrogen-powered steel production may remain out of reach for more than a decade unless significant cost reductions and infrastructure advancements are made.
Despite hydrogen-based direct reduced iron (DRI) projects leading the green steel transition in regions such as Europe, the Middle East, the US, and China, IDTechEx warns that high costs are a major obstacle. Steelmakers require low-carbon hydrogen at $2–3 per kilogram, far below the current price of green hydrogen, which ranges between $4 and $8 per kilogram. This price disparity has led companies like ArcelorMittal to delay final investment decisions, with the Luxembourg-based firm asserting that hydrogen and carbon capture-based steelmaking will remain commercially unviable before 2030.
Even prominent green steel initiatives are opting to begin operations using natural gas, with the intention to shift to hydrogen once supporting infrastructure is in place. If plans move forward as expected, IDTechEx projects that hydrogen-powered steel production could reach 46 million tonnes by 2035.
Infrastructure challenges remain another pressing issue. The research firm emphasizes that large-scale adoption hinges on expanding industrial hydrogen networks and reducing costs. Thyssenkrupp CEO Miguel Lopez has also voiced concerns, warning that the company’s €3 billion hydrogen-based steel plant in Germany could become a stranded asset without assured access to affordable green hydrogen.
SteelWatch, an advocacy group focused on steel decarbonization, previously suggested that importing green hydrogen-based sponge iron from renewable-rich nations could dramatically cut shipping volumes—by up to 75%—compared to producing it domestically with imported hydrogen and iron ore.
Sources:
[1] Green steel adoption over a decade away without cheaper hydrogen: IDTechEx https://www.h2-view.com/story/green-steel-adoption-over-a-decade-away-without-cheaper-hydrogen-idtechex/2125708.article/