Abstract
Decarbonised steel, enabled by green hydrogen-based iron ore reduction and renewable electricity-based steel making, will disrupt the traditional supply chain. With promising technology in development, the current challenge is to re-design the supply chain around high quality renewable resources - the key precedent for the affordability of green hydrogen and fossil-free steel. This study investigates the direct reduced iron-electric arc furnace production route with hydrogen-enabled renewable energy systems deployed in regional settings.We assessed 12 cases, differentiated by spatial and temporal dimensions, in a bid to achieve energy, water and land efficiency and drive down green premiums. Regional alliances are necessary for steel’s decarbonisation; the Australia-Japan binational relationship was strategically selected as a case study. The results show clearly that concentrating manufacturing processes in proximity to high-quality renewable energy resources (e.g., in Australia’s Pilbara region) and iron ore deposits will enable price parity with fossil-based steel by 2050. In 2030, however, price signals must be sent to the market to avoid carbon lock-in with
long asset lifetimes. If Australia continues its reputation as an energy and mineral export nation, liquefied hydrogen may be a more efficient energy vector than ammonia. The magnitude of energy exports, and related pathway efficiency, are crucial determinants of the system’s resource stress. The study also shows that the scale and resource stress potential are immense: producing 40Mt of decarbonised steel will require 74-129% of Australia’s current electricity production, 80-118% of the Pilbara’s water consumption and A$137-328 billion in capital investment; such challenges need to be tackled to decarbonise steel at scale.