FT Rethink
Green hydrogen: the key to decarbonising heavy industry
In April 2021, the European Union passed the EU Climate Law, committing its member nations to reducing their greenhouse gas (GHG) emissions by at least 55% by 2030.1 Meanwhile, earlier the same month, the UK passed its own law enshrining an even more ambitious commitment: to reduce its emissions by 78% by 2035.2 Despite a range of obstacles, the road to net zero in much of the economy is mostly clear. But, in some sectors, the decarbonisation solutions we need are still struggling to get off the ground.
One of these so-called “hard-to-abate” sectors is heavy industry, which includes steel, cement, and petrochemical (including plastic) manufacturing. These industries are hard to abate primarily for two reasons. First, they typically have production processes that require extraordinarily high temperatures, which remain difficult or near impossible to reach without burning fossil fuels. And second, many of these processes are highly integrated, regulated, and have significant investments of time and money behind them. As such, even where alternative methods are available in theory, the levels of complexity and sunk cost involved mean that the processes of the steel, cement, and petrochemicals industries are often extremely difficult to change in practice.
Read also: Challenge or opportunity? Rethinking hard-to-abate sectors
But, despite these challenges, change they must. Barring some unexpected and revolutionary scientific discoveries, these industries will remain essential to a functioning society for generations to come, even as their high-temperature processes account for around 10% of global emissions – more than cars and planes combined3.
To achieve such a radical shift, the consensus seems to be crystallising around an approach that is, in one sense, very much back-to-basics.
Elementary
With atoms consisting of a single proton and electron, hydrogen is the simplest and most abundant element in the universe. It constitutes around 75% of all normal matter, is colourless, odourless, and tasteless, and is of great interest to those looking to decarbonise high-temperature industries. Because, like fossil fuels, hydrogen in its gaseous form is highly flammable. But unlike fossil fuels, the only emission produced by burning hydrogen is water.
Read also: Investing in the future of hydrogen
Now, the steel, cement, and petrochemical industries are taking their first steps toward turning that interest into a profound transformation.
For instance, Canada-based ArcelorMittal, the second largest steelmaker in the world, recently conducted a successful test using “green” hydrogen to reduce iron ore.4 Green hydrogen is produced using 100% zero-carbon electricity and, as such, will be a vital energy source if high-temperature industries are to truly decarbonise.
Meanwhile, last October, Volvo revealed an eight-tonne electric truck made partly out of green steel – a world first.5 The steel used in Volvo’s truck, which is designed to be used in quarries and mines, was produced by SSAB using green hydrogen in place of the usual coking coal6. These are small yet crucial achievements for an industry that accounts for at least 7% of global emissions7, and which must halve its emissions by 2050 if we’re to achieve our global net-zero targets.
Collaborations count
Delivering these green industrial products is, however, challenging for any one company alone. The steel used in the Volvo truck was procured through HYBRIT, a green steel joint venture between the Swedish steelmaker SSAB, Swedish state-owned utility Vattenfall, and miner LKAB. Such complex value chain collaborations reflect the challenges that transitioning sectors like steel face in deploying the clean electricity and hydrogen production capacity they need, on top of the transformative capital investments required to build low-carbon and net-zero production routes. Consortiums, public-private partnerships, industrial clusters, joint ventures, cross-sector partnerships, and off-take agreements will all be needed to develop the underpinning energy infrastructure of transitioning industrial sectors8.
Also leveraging the power of collaborations, manufacturer British Steel has pledged to deliver net-zero steel by 20509, and will work with EDF, University College London, and the Materials Processing Institute to achieve that goal. While on the cement front, manufacturer Hanson UK is collaborating with Swansea University to replace natural gas with green hydrogen in burners at its Port Talbot plant in Wales.10
Sourcing clean energy
However, before green hydrogen can become mainstream, these industries must first figure out how to source the vast quantities of zero-carbon energy required to produce green hydrogen at scale. Last year, INEOS announced plans to create a green hydrogen supply hub by producing hydrogen through the electrolysis of water in Norway, to be powered by zero-carbon electricity.11 This will be an important step, but to decarbonise heavy industry massively more capacity will be needed.
For example, Europe currently produces around 100 million tonnes of steel a year. Producing that amount of steel using green hydrogen instead of fossil fuels would require about 400 terawatt-hours of electricity, which is equivalent to 15% of Europe’s annual energy consumption – and that energy would have to be 100% carbon-free.
Read also: Is sustainable policy working?
Policymakers will also play a vital role, such as by introducing government subsidies designed to promote development and investment in power grids and infrastructure. The EU and the UK have both published ambitious plans to develop a hydrogen economy – an economy that looks set to help shape the future of our society and our planet.
1 European Commission (2021). 'European Climate Law'. Available here: https://ec.europa.eu/clima/eu-action/european-green-deal/european-climate-law_en
2 GOV.UK (2021). 'UK enshrines new target in law to slash emissions by 78% by 2035'. Available here: https://www.gov.uk/government/news/uk-enshrines-new-target-in-law-to-slash-emissions-by-78-by-2035
3 Roberts, D. (2020). 'This climate problem is bigger than cars and much harder to solve', Vox. Available here: https://www.vox.com/energy-and-environment/2019/10/10/20904213/climate-change-steel-cement-industrial-heat-hydrogen-ccs
4 ArcelorMittal (2022). 'ArcelorMittal successfully tests partial replacement of natural gas with green hydrogen to produce DRI'. Available here: https://corporate.arcelormittal.com/media/news-articles/arcelormittal-successfully-tests-partial-replacement-of-natural-gas-with-green-hydrogen-to-produce-dri
5 Tomlinson, M. (2022). 'Volvo Trucks: First in the world to use fossil-free steel in its trucks'. Volvo Trucks. Available here: https://www.volvotrucks.co.uk/en-gb/news/press-releases/2022/may/volvo-trucks-first-in-the-world-to-use-fossil-free-steel-in-its-trucks.html
6 https://www.ssab.com/en-gb/news/2021/10/ssabs-fossilfree-steel-featured-in-volvo-groups-vehicle
7 Energy Transitions Commission (2018). 'Mission Possible: Reaching net-zero carbon emissions from harder-to-abate sectors by mid-century. Sectoral focus: steel.' Available here: https://www.energy-transitions.org/wp-content/uploads/2020/08/ETC-sectoral-focus-Steel_final.pdf
8 https://www.climateaction100.org/wp-content/uploads/2021/08/Global-Sector-Strategy-Steel-IIGCC-Aug-21.pdf
9 British Steel (2021). 'British Steel unveils Low-Carbon Roadmap with net-zero pledge'. Available here: https://britishsteel.co.uk/news/british-steel-unveils-low-carbon-roadmap-with-net-zero-pledge/
10 Hanson (2021). 'Collaboration on green hydrogen research'. Available here: https://www.hanson.co.uk/en/news-and-events/green-hydrogen-research
11 INEOS Hydrogen (n.d.). 'INEOS & Hydrogen'. Available here: https://www.ineoshydrogen.com/ineos-hydrogen/ineos-and-hydrogen
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