Steelmakers should rethink shift to hydrogen, DRI: EuRIC
European steelmakers should revise their commitments to shift to hydrogen and direct reduced iron-based steelmaking following the increase in energy prices and lack of infrastructure development, says a new position paper by EU recycling industries’ confederation EuRIC.
In the paper seen by Kallanish, it notes that since 2020 most European flat steel producers have announced their move from coal-powered blast furnaces to DRI to decarbonise. However, it says these commitments should be revised following the increased energy prices since the Russian invasion of Ukraine, and delayed green hydrogen development in Europe. The latter is also correlated to high costs and poor market development.
It says that even the largest steelmakers admit that despite massive public subsides, it is not possible to produce steel with green hydrogen within the EU and remain globally competitive due to high energy prices.
It continues that considering current energy prices, the DRI route has become cost prohibitive to scale up in Europe. But it could represent a competitive advantage to emerging steelmaking countries in the Middle East and North Africa region which can benefit from low natural gas prices.
Decarbonising via the EAF route is a more immediate, scalable and economically reasonable solution for Europe; therefore, EuRIC is urging policymakers to develop a framework to incentive increasing scrap-based manufacturing capacity in Europe.
This would also further improve the recovery rates of steel and the quality of recycled steel, as well as ensuring stable demand and drive investment.
Over the past decade, the EU’s recycled steel output has remained stable, but steel production has decreased. The increase in recycled steel scrap exports has compensated for the reduced consumption, due to the downturn in EU production, driven by decreased construction activity and lower demand for vehicles.
To reduce reliance on third-country imports of iron ore and fossil energies for strategic raw materials, it is urgent for the EU to maximise its use of local resources, the paper says.
In recent days, MEPs and industry participants have said that high energy costs continue to threaten the existence of the EU steel industry as well as its efforts to decarbonise.
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Steelmakers should rethink shift to hydrogen, DRI: EuRIC, source
