Green steel still decades away: BlueScope

Market: Coking coal, Hydrogen, Metals
15/08/22

Australia-based steel producer BlueScope Steel believes green steel is decades away, as Shell withdraws investment from a renewable hydrogen hub at the 2.1mn t/yr Port Kembla steelworks in the Illawarra region of New South Wales (NSW).

BlueScope will continue to work with other potential investors to investigate building a 10MW pilot-scale renewable hydrogen electrolyser to test the use of green hydrogen in its blast furnace at Port Kembla. Shell is still supportive but has decided not to invest in the project, BlueScope chief executive Mark Vassella said.

Bluescope will continue to investigate hydrogen production, including as a potential feed for a pilot direct reduced iron (DRI) plant at Port Kembla, as part of the firm's tie-up with UK-Australian mining firm Rio Tinto to investigate green steel production. But commercial steel production using hydrogen instead of coking coal is still decades away with no commercially viable options available anywhere in the world, Vassella said.

One of the major drags on green steel developments is the global energy crisis, particularly in Europe, because green steel requires significantly more electricity than traditional steelmaking methods, he added. This is also a problem in Australia, where an unstable energy market is starting to hollow out the manufacturing sector.

BlueScope's plans to develop a hydrogen hub in the Illawarra region is in part to take advantage of the NSW government's A$3bn ($2.13bn) state-funded investment plan to develop green hydrogen hubs.

BlueScope will invest A$150mn to cut greenhouse gas (GHG) emissions over the next five years. But it is also moving forward with the A$700mn-800mn reline of its blast furnace at Port Kembla, which implies a 20-year commitment to traditional steelmaking using iron ore and coking coal, albeit with some tweaks to minimise emissions.

It plans to initially replace pulverised coal injection (PCI) grade coking coal with gas from its coke ovens, which contain 60pc hydrogen. It has also teamed up with the federal government's Commonwealth Scientific and Industrial Research Organisation (CSIRO) to work on the pilot hydrogen electrolyser at Port Kembla to supplement coke oven gas.

BlueScope is also partnering with CSIRO to use charcoal produced from the pyrolysis of organic material, or biochar, as another replacement for a portion of the metallurgical coal used in the blast furnace.

BlueScope has set a goal of net-zero GHG emissions by 2050.

By Jo Clarke

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