Decarbonisation of the steel industry will remain a leading theme in 2024
The decarbonization of the steel industry will continue to be a leading theme in 2024, according to Fastmarkets’ forecast.
Adequate supply of clean hydrogen and renewable energy at competitive prices will be crucial in this process.
Current hydrogen prices are around €5/kg, but they would need to be much lower to become commercially viable for steel production.
Plans to use hydrogen and green energy require significant investments. Implementing them in the steelmaking process could increase costs, according to market participants. In addition, the economic conditions in 2024 are unknown.
In particular, Europe needs to establish electricity production without the use of fossil fuels. However, large-scale electrolysis to produce green hydrogen requires significant volumes of it. Therefore, it makes sense to locate the most energy-intensive operations near places where the required volumes are available. In addition, it makes sense to increase the production of hot briquetted iron (HBI), which will be used by steelmakers that have replaced blast furnaces with electric arc furnaces.
As GMK Center reported earlier, financial support and a large supply of green electricity are the two main challenges for the steel industry to achieve carbon neutrality. This opinion was expressed by company executives and experts at a specialized forum in China. Chung-Woo Choi, CEO of Posco Group, predicts that the share of green energy in the total energy supply of the steel industry will increase to 31% in 2030 and 70% in 2050, compared to 16% now. However, it does not have stable and economical supply conditions.