Substituting natural gas with hydrogen: A case study on mass,energy,and emissions in electric arc furnace steelmaking

Abstract

This study sets out to explore the use of hydrogen into steelmaking via the electric arc furnace route, weaving together technoeconomic analysis with a comprehensive carbon footprint assessment. Through a detailed examination, we scrutinize the financial prospects of integrating hydrogen within a scrap-based steel mill, using Liberty GFG's data for a case study. Based on the data, the steel plant's annual consumption is 1.2 million GJ/y of energy, primarily derived from natural gas, to produce 0.75 million tonnes of steel. We explore the potential of replacing this natural gas with 10-kilotonnes of hydrogen per year (1.35 t/h), considering the steel mill's capacity factor of 0.82. By employing sophisticated flowsheet-based calculations, we unravel the environmental implications of integrating hydrogen into the steelmaking process. The investigation reveals that the plant consumes 2.9 GJ per tonne of steel from natural gas, indicating a demand of 23.5 kilograms of hydrogen to completely supplant natural gas. This equates to 2.35 kilograms of hydrogen per tonne of steel for every 10% displacement of natural gas. At present, the comprehensive cost of employing hydrogen stands at US$ 144 per tonne of steel, predicated on a wind electricity price of US$ 38 per MWh. In contrast, utilising natural gas amounts to US$ 58 per tonne of steel. However, the horizon holds promise for a substantial reduction in hydrogen costs over the next decade, heralding a potential paradigm shift in its utilisation.

The emission analysis shows that the plant produces greenhouse gas emissions of 735 kgCO₂e/t steel, out of which 70% is due to the use of dominant fossil electricity and the rest 30% (223 kgCO₂e/t steel) from other carbon sources such as natural gas, lump coke, coke fines, and diesel fuel. Modeling proposes that a complete substitution of grid electricity and natural gas would lead to process emissions totaling 104 kgCO₂e/t steel. To achieve a net-zero emission target, a strategic shift is suggested: replacing lump coke and coke fines with biochar. This substitution not only eliminates lifecycle emissions but also paves the path towards realising a sustainable, carbon-neutral future.

Keywords

electric arc furnace green steel decarbonisation hydrogen natural gas technoeconomics emissions

Introduction

Steelmaking is one of the highest energy-intensive processes, accounts for 8.0% of the global energy demand, and contributes 7–9% of global CO₂ emission.¹ According to the World Steel Association, 1951 million tonnes (Mt) of crude steel were produced globally in 2021.² Following the blast furnace basic oxygen furnace route (73%), the second major route of producing steel is recycling steel scrap and direct reduced iron (DRI) in electric arc furnaces (EAF) (26%). Steel scrap is one of the top recycled materials globally, with 70 million tonnes per year,³ accounting for 21% of global steel production.⁴ Steel scrap can be classified as obsolete (from end-of-life products), industrial, manufacturing (from industrial and manufacturing processes), and home scrap (from the iron, steelmaking and foundry processes).^1,5 Besides, some EAFs use ore-based metallics such as DRI, hot briquetted iron (HBI), pig iron and hot metal, producing about 5% of the global steel.⁶ Adding ore-based metallics is important, especially for producing high-quality steel, where the control of residuals present in the scrap is an issue.

The plant used for the case study produces steel by recycling ferrous steel scrap. Depending on the source of electricity, the EAF route emits relatively low CO₂ emissions per tonne of steel production.⁴ In the last few decades, the improvement of the EAF has been significant, especially in reducing the consumption of electricity and electrodes. Currently, the electricity consumption in EAF is 400 to 500 kWh/ t steel compared to over 630 kWh/ t steel in 1960,⁷ though this data varies depending on details around the furnace technology and feed materials.⁸ The electricity consumption from the EAF of the studied plant is reported to be 427 kWh/ tonne with an emission factor of 1320 g CO₂e/kWh,⁹ leading to the emission of 0.75 tCO₂e/t steel.¹⁰ The total emission from the studied plant is reported to be 0.53 million tonnes of CO₂e/yr.

As the main energy consumption in the EAF is electricity, thus, CO₂ emission mainly depends on how the electricity used in the process is generated. Green steel can be manufactured if the electricity is sourced from renewable energy. In the foreseeable future, shifting the conventional carbon-intensive BF-BOF route to a more environmentally friendly EAF route will depend on the availability of high-quality scrap, green electricity, and cost-competitive alternatives to natural gas, such as green hydrogen. Currently, natural gas, pure carbon and oxygen are supplied to the EAF to provide the required carbon content (∼0.04–1.5%) and heat, helping to reduce electricity consumption simultaneously. Recently, carbon-neutral biochar has been tested as a potential carbon source in EAF to reduce CO₂ emission, which also helps slag formation.^11,12

Hydrogen is expected to play a significant role in future energy systems. The cleaner and the high energy content of hydrogen (LHV: 120 MJ/kg) make it a promising option for future energy supply. Besides various technological challenges, the main driver for successfully shifting from fossil fuel to hydrogen-based steel manufacturing is the cost-effective sourcing of hydrogen. Currently, renewable hydrogen is not affordable for commercial-large scale applications. However, there is a significant effort worldwide to generate hydrogen with a price of US$ 2/kgH₂ by 2030. This competitive hydrogen will pave the way for its widespread integration into the steel industry- one of the major manufacturing industries.

Hence, research is underway to implement H₂ as a fuel and reducing agent to fully or partially replace natural gas.^13,14 However, many technical and economic challenges must be addressed before making hydrogen-based EAF technology affordable/available in the wider steelmaking industries. Some of the key challenges include the effective utilisation of hydrogen in reheat furnaces and EAF, maintaining desired carbon content in steel, removal of gangue content, energy and material balance under hydrogen combustion, formation of slag and its effective removal and above all availability of cost-effective renewable green hydrogen.^1,13 Despite various challenges, the emerging hydrogen-based EAF technology to produce “Green steel” has immense potential, especially in Australia, with abundant solar and wind resources to produce green hydrogen. Also, the transition to hydrogen as an alternative energy source has become important due to declining global fossil reserves and climate change.

Thus, this study assessed the feasibility of hydrogen integration in a “mini mill” operated by GFG's Australian subsidiary InfraBuild, which has been manufacturing steel in the studied plant for about 30 years with a current production capacity of 0.75 million tonnes per year.¹⁰ In 2021, The plant consumed a substantial amount of energy, with a total of 3.4 petajoules.¹⁰ However, in the open literature, there are no modelling or experimental studies on decarbonising EAF-based mini-mills using hydrogen and its implications on environmental impact. Furthermore, carbon footprint analyses for EAF steelmaking in various parts of the world have been conducted in previous studies.^15,16 Nonetheless, there is a scarcity of research on the carbon footprint of EAF steelmaking within the Australian context.¹⁷

This study conducts a thorough examination of the cost of hydrogen steelmaking, incorporating future projections specific to Australian conditions, including natural gas, electricity, and hydrogen prices. The environmental impact of hydrogen and renewable wind electricity is evaluated as potential alternatives to grid electricity and natural gas. Ultimately, the findings from this study aim to offer valuable insights into integrating hydrogen into EAF-based steel plants and assist in making well-informed decisions for future investments.

Methodology

The study conducted a case study using a typical “mini mill” operated in many parts of the world, including Australia.^15,18 We were supplied with the key performance data of the steel plant. Those data contained information about material and energy consumption at different plant sections (melt shop, rod mill, bar mill). Based on this information, we calculated the total consumption of natural gas, lump coke and coke fines for the individual section of the plant per tonne of steel manufacturing. The volume of hydrogen required against the substitution of natural gas per tonne of steel production was calculated on an energy basis. The resources needed to produce hydrogen to meet the supply-demand of the plant were calculated, and the operating cost associated with hydrogen-based steel manufacturing considering partial substitution of natural gas was evaluated. Standard data from different government agencies and open literature were used where required. Mass and energy balance was performed using flowsheet-based mathematical modelling aided by Microsoft Excel. The carbon footprint of the proposed hydrogen-integrated processes was performed using standard emission factors,¹⁹ as discussed in Section 4. It is worth mentioning that all money value reported in this study for technoeconomic modelling is in US$ in 2023, while standard units are used for mass, energy, and emission values.

Data analysis and modelling

Material and energy consumption of the plant

As shown in Table 1, the production capacity of the plant is 0.75 million tonnes, with a gross yield (billet to scrap ratio, including alloys) of about 93.5%. As seen, 52% of the product is the rod, while the rest, 48%, is the bar. The average energy consumption from the EAF and ladle furnace (LF) is 427 kWh and 27 kWh/t of steel, respectively. Hence, total energy consumption from the plant is estimated to be 484 GWh/t steel excluding 50 kWh/t for scrap processing.

Table 1.

Overall material and energy consumption of the plant.

Item	Rod mill	Bar mill	Melt shop	Total
Production (BT- Billet tonne/y)	389,348	361,352	750,700	750,700
Scrap (BT- Billet tonne/y)	-	-	802,900	802,900
NG consumption (Nm³/BT)	31.1	30.8	7.1	69.0
NG consumption (GJ/BT)	1.31	1.29	0.30	2.90
NG consumption (Nm³/y)	12,049,652	11,084,622	5,177,362	28,311,636
NG consumption (GJ/y)	506,085	465,554	217,449	1,189,089
The current cost of NG (US$/BT)	26.26	26.0	5.96	58.29
The current cost of NG (US$/y)	10,172,315	9,357,638	4,370,729	23,900,682
Eq. H₂ requirement (Nm³/y)	45,909,173	42,232,410	19,725,751	107,867,333
Eq. H₂ requirement (t/y)	4132	3801	1775	9708
Eq. H₂ requirement (kg/h)	574	528	247	1348
Theoretical electricity for H₂ production (GWh)	-	-	-	534
EAF + Ladle furnace energy consumption (kWh/t steel)	15	15	454	484
Lump coke (kg/billet tonne)	-	-	11.0	(8400 t/y)
Coke fines-char (kg/ billet tonne)	-	-	7.0	(5600 t/y)

Besides electricity, other primary energy sources used in the plant include natural gas, with an estimated consumption of 1.2 million GJ per year. The consumption of natural gas in the rod, bar and melt shop is determined to be 1.31, 1.29 and 0.30 GJ/t steel, respectively, indicating 43% of this natural gas is consumed in the rod mill, 39% in the bar mill and the rest 18% in the melt shop. To replace the natural gas fully, the plant needs to source 9708 tonnes of hydrogen per year. Besides grid electricity and natural gas, per tonne of steel requires 11.0 kg of lump coke and 7.0 kg of coke fines (char), leading to the yearly consumption of about 8400 tonnes of lump coke and 5600 tonnes of coke fines (char).

In the case of onsite hydrogen generation, the electrolyser will consume 530 GWh of electrical energy and 106,700 kilolitres of water. Modelling also shows that purchasing hydrogen from an external supplier may cost US$ 45–59 million in 2023 to replace natural gas fully, which is forecasted to be US$ 32–43 and US$ 21–27 million in 2030 and 2040, depending on the electricity price (best or base price). Moreover, in 2040, the cost of hydrogen is expected to be around 40% lower than natural gas, projecting a hydrogen price of about US$ 3.0/kg.

Substituting natural gas with hydrogen for melt shop

The consumption of hydrogen and natural gas (NG) with respect to the substitution of natural gas in the melt shop of the plant is shown in Figure 1. The calculations were carried out for substituting 10 to 100% natural gas per tonne of steel.

Figure 1.

Requirement of H₂ and NG per tonne of steel concerning the substitution of NG in the melt shop.

Increasing the share of hydrogen by substituting natural gas increases the hydrogen requirement linearly, starting from 2.7 to 27.0 Nm³/t steel, while the corresponding requirement of natural gas was 6.4 to 0 Nm³/t steel. Considering mass basis, the corresponding equivalent hydrogen requirement is 0.25 to 2.35 kg/ t steel. As seen in the secondary vertical axis, about 300 MJ of energy is required per tonne of steel. Every 10% substitution of natural gas (energy basis) leads to an energy requirement of 30 MJ from hydrogen.

Technoeconomics analysis for melt shop

The cost of hydrogen and natural gas are predicted per tonne of steel for 2023, 2030 and 2040 (for future scenarios). For technoeconomic modelling, the levelised cost of hydrogen (LCH₂) used was based on our modelling,²⁰ while the cost for NG was supplied by the plant. A summary of the current and forecasted costs of hydrogen and natural gas is reported in Table 2.

Table 2.

Predicted cost of hydrogen and natural gas for technoeconomic modelling.

Year	Price of H₂ ($/kg)	Price of H₂ ($/GJ)	Price of NG-$/GJ
2023	5.0	42.37	20
2030	3.35	28.42	27*
2040	1.85	15.35	30*

*Predicted value.

In 2023, the melt shop needs to spend about $1.35 to $12.75/ t steel for hydrogen concerning the substitution of 10 to 100% natural gas, as shown in Figure 2. Also, the cost of 100% natural gas per tonne of steel is calculated to be about $6.0/t steel, which decreases by $0.6 with every 10% increase of hydrogen in the blend.

Figure 2.

In 2030, the cost of hydrogen in the melt shop will decrease markedly with $0.85 to $8.7 tonne of steel for substituting 10 to 100% natural gas, as reported in Figure 2. In contrast, the cost of natural gas is predicted to be about $8.0/t steel, which is $2.0 higher than the cost in 2023. While considering total cost, it appears that the melt shop needs to spend about ∼$8.0/t steel in 2030 regardless of the share of hydrogen, meaning hydrogen-based steelmaking would be more beneficial. The biggest change in cost share from hydrogen is expected in 2040, with only $0.46 to $4.7/ t steel concerning the substitution of 10 to 100% natural gas, which seems to be approximately one-third of the cost in 2023, as shown in Figure 2. In summary, the cost of using 100% hydrogen in the melt shop in 2023, 2030 and 2040 are predicted to be $12.75, $8.7 and $4.7 per tonne of steel, respectively.

Substituting natural gas with hydrogen for rod mill

The consumption of hydrogen and natural gas concerning the substitution of natural gas in the rod mill of the plant is shown in Figure 3. As can be seen, increasing the share of hydrogen, the hydrogen requirement increases linearly, starting from 11.8 to 118.8 Nm³/t steel, while the corresponding requirement of natural gas is 28.0 to 0.0 Nm³/ tonne of steel. Considering mass basis, the corresponding equivalent hydrogen requirement is 1.0 to 10.6 kg/ tonne of steel. As seen in the secondary vertical axis, 1307 MJ of energy is required in the rod mill per tonne of steel manufacturing. Every 10% substitution of natural gas (energy basis) leads to an energy requirement of 131.0 MJ from hydrogen. The rod mill consumes about ten times more energy than the melt shop.

Figure 3.

Requirement of H₂ and NG per tonne of steel concerning the substitution of natural gas in the rod mill.

Technoeconomics analysis for rod mill

In 2023, the rod mill needs to spend about $5.4 to $55.6/t steel for hydrogen concerning the substitution of 10 to 100% natural gas, as shown in Figure 4. Also, the cost of 100% natural gas per tonne of steel is calculated to be about $26.1, which decreases by $2.6 with every 10% increase of hydrogen in the blend. It appears that the rod mill needs to spend $26.1 to $55.61/ t steel in 2023, depending on the share of hydrogen. As seen, in 2030, the cost of hydrogen in rod mills will decrease markedly with $3.68 to $37.1/t steel, depending on the substitution (10 to 100%) of natural gas. In contrast, the cost of natural gas per tonne of steel is predicted to be about $34.85, 25% higher than in 2023. It appears that in 2030, the rod mill needs to spend about $35/ t steel from natural gas, which is very close to the cost of 100% hydrogen ($37), and variation with respect to the share of hydrogen is insignificant.

Figure 4.

As shown in Figure 4, a drastic change in cost from hydrogen is expected in 2040, with $2.0 to $20.77/t steel, concerning the substitution of 10 to 100% natural gas. The cost of using hydrogen seems to be half of the cost of natural gas in 2040 and about one-third of the cost in 2023. In summary, the cost of using 100% hydrogen in the rod mill in 2023, 2030 and 2040 are predicted to be $55.6, $37.1 and $20.77 per tonne of steel, respectively.

Substituting natural gas with hydrogen for bar mill

Figure 5 shows the consumption of hydrogen and natural gas with respect to the substitution of natural gas in the bar mill. The consumption in rod and bar mill is nearly the same. As seen, by increasing the share of hydrogen, the hydrogen requirement increases linearly, starting from 11.7 to 117.6 Nm³/t steel, while the corresponding requirement of natural gas is 30.8 to 0.0 Nm³/ tonne of steel. Considering mass basis, the corresponding equivalent hydrogen requirement is 1.0 to 10.5 kg per tonne of steel. As seen in the secondary vertical axis, 1294 MJ energy is required in the bar mill per tonne of steel manufacturing. Every 10% substitution of natural gas (energy basis) leads to an energy requirement of 129.4 MJ from hydrogen. The bar mill consumes nearly similar energy to the rod mill.

Figure 5.

Requirement of H₂ and NG per tonne of steel concerning the substitution of NG in the bar mill.

Technoeconomics analysis for bar mill

In 2023, the bar mill needs to spend about $5.5 to $55/ t steel for hydrogen to substitute 10 to 100% natural gas, as shown in Figure 6. Also, the cost of 100% natural gas is calculated to be about $26/ t steel, which decreases by $2.61 with every 10% increase of hydrogen in the blend. Considering the total cost of hydrogen and natural gas, the bar mill needs to spend $26.1 to $55/ t steel in 2023, depending on the share of hydrogen.

Figure 6.

Figure 6 shows the predicted cost of hydrogen and natural gas per tonne of steel from the bar mill in 2030. As seen, in 2030, the cost of hydrogen will decrease markedly with $3.7 to $36.9/ t steel, depending on the substitution of 10 to 100% natural gas. In contrast, the cost of natural gas is predicted to be about $34.85/ t steel, which is 25% higher than the cost in 2023. It appears that in 2030, the bar mill needs to spend about $34.85/t steel from natural gas, which is very close to the cost of 100% hydrogen ($36.85), and variation with respect to the share of hydrogen is insignificant.

As shown in Figure 6, the cost of hydrogen in 2040 is expected to be significantly low, with $2.0 to $20.0/ t steel, depending on the substitution of natural gas. The cost of using hydrogen seems to be half of the cost of natural gas in 2040 and about one-third of the cost in 2023.

Substituting natural gas with hydrogen for the entire plant

As shown in Figure 7, the requirement of hydrogen and natural gas and their corresponding energy with respect to the substitution of natural gas for the entire plant. As seen, increasing the share of hydrogen by substituting natural gas increases the hydrogen requirement linearly from 26.0 to 264.0 Nm³/ t steel, while the corresponding requirement of natural gas is 62.0 to 0 Nm³/ t steel against the substitution of 10 to 100% natural gas. Considering mass basis, the corresponding equivalent requirement of hydrogen is 2.4 to 23.5 kg /t steel. The entire plant (melt shop + rod mill + bar mill) requires 2.9 GJ/ t steel, and every 10% substitution of natural gas (energy basis) leads to an energy requirement of about 0.29 GJ from hydrogen.

Figure 7.

Requirement of H₂ and NG per tonne of steel concerning the substitution of NG in the entire plant.

Technoeconomics analysis for the entire plant

Finally, the total cost of hydrogen and natural gas was determined per tonne of steel for the entire plant, as shown in Figure 8. It shows that in 2023, the entire plant needs to spend $12 to $122.6/t steel for hydrogen with respect to the substitution of natural gas by 10 to 100%. Moreover, the cost of natural gas is estimated to be $58/ t steel using 100% natural gas, which decreases by $5.8 with every 10% blending of hydrogen on an energy basis.

Figure 8.

The data presented in Figure 8 shows the predicted cost of hydrogen and natural per tonne of steel from the entire plant in 2030. As an obvious fact, increasing the share of hydrogen increases the cost of steel manufacturing linearly. However, a significant drop in the total cost of hydrogen-based steelmaking is predicted with decreasing price of hydrogen in 2030 and 2040 (Figure 8). As can be seen, in 2030, the cost of hydrogen decreases markedly with $8.0 to $82.4/t steel, depending on the substitution of 10 to 100% natural gas. In contrast, the cost of natural gas increases by 33% per tonne of steel compared to 2023. It appears that in 2030, the entire plant needs to spend about $77.7/ t steel from natural gas (100%), which is close to the cost of 100% hydrogen ($82), and variation with respect to the share of hydrogen is insignificant. The cost of hydrogen in 2040 is expected to decrease further, with $4.4 to $44.5/ t steel, depending on the substitution of natural gas. The cost of using hydrogen seems to be half of the cost of natural gas in 2040 and about one-third of the cost compared to 2023.

Figure 9 presents the mass and energy balance for the entire plant considering per tonne of steel production. According to data provided by the plant, per tonne of steel manufacturing requires approximately 1075 kg of scrap with an average gross yield of 93.5%. Under 100% hydrogen or natural gas cases, the gas consumption in the melt shop is 27 Nm³H₂/t steel or 7.0 Nm³CH₄/t steel (298 MJ/t steel). Whereas rod mill consumes 119 Nm³H₂/t steel or 31.1 Nm³CH₄/t steel (1307 MJ/t steel), bar mill consumes 118 Nm³H₂/t steel or 30.8 Nm³CH₄/t steel (1294 MJ/t steel). The total gas consumption in the entire plant is estimated to be 264 Nm³H₂/t steel (∼23.5 kgH₂) or 69 Nm³CH₄/t steel (2900 MJ/t steel).

Figure 9.

Mass and energy balance for entire plants using 100% H₂ or NG.

Assessment of carbon footprint for the hydrogen-integrated steel plant

A life cycle assessment for the hydrogen-integrated electric arc furnace steelmaking process was conducted to assess the environmental impact of hydrogen integrations. The key processes involved in scrap-based steel manufacturing include scrap processing, melting scrap in the melt shop, and forming bars and finished rods. The system boundary for the carbon footprint study of the plant is shown in Figure 10, while Table 3 reports the details of the materials and energy flow for all processes. Equivalent CO₂ emission based on the materials flow was calculated according to the standard emission factor reported in Ref.¹⁹

Figure 10.

The system boundary for the carbon footprint analysis of the plant.

Table 3.

Material and energy flow for the plant.

Plants	Raw materials	Intermediate products	Products and co-products	By-Products and Wastes
Scrap processing	Diesel	Shredded scrap (by-products)
Melt shop (EAF, ladle furnace)	Electricity, Natural gas, charging coke/biomass, flux and limestone, refractory	GHG gases, Circulating cooling water, Sludges, dust	Liquid/crude steel,	EAF slag, Ladle Slag, Dust, Refractory
Billet processing	Natural gas, electricity, water	GHG gases, Circulating cooling water	Billet	WastewaterMillscale
Reheat furnace	Natural gas, electricity	GHG gases, Circulating cooling water	Hot billet	Millscale
Rod mill	Natural gas, electricity, water	GHG gases, Circulating cooling water	Rod	WastewaterMillscale
Bar mill	Natural gas, electricity, water	GHG gases, Circulating cooling water	Bar	WastewaterMillscale

The carbon footprint study has been carried out considering above mentioned process on a gate-to-gate basis. This study aims to assess the environmental impact of NG and hydrogen (by partially substituting NG) based steel manufacturing using an EAF for one tonne of steel as a functional unit.

The data presented in Table 4 shows the GHG emissions from carbon and electricity sources for the entire plants (scrap processing, melt shop, ladle furnace, rod mill and bar mill). As seen, electricity is the major contributor to GHG emissions with 512 kgCO₂e/ t steel, followed by natural gas, lump coke, coke fines, and diesel with 157, 31, 19 and 16 kgCO₂e/t steel. The total GHG emission from the plant was calculated to be 735 kgCO₂e/t steel, which is 178 kgCO₂e/t steel lower than the study conducted by Burchart-Korol in Poland.¹⁵ Of 735 kgCO₂e/t steel, 70% was due to dominant fossil electricity, and the rest, 30%, was due to carbon sources used in the steelmaking process. In Polish EAF-based steel production, electricity is responsible for 70% of emissions,¹⁵ similar to the Australian share. However, in a study conducted by Hornby and Brooks,¹ the CO₂ emission distribution is as follows: electrical energy 56%, carbon oxidation 23%, burner natural gas 5%, metal oxidation 8%, volatiles from scrap 7% and the rest of 2% from electrode consumption with a total of 704 kWh/t steel from EAF steel making.

Table 4.

Total GHG emission from the entire plant.

Emission sources	GHG (kgCO₂e/t steel)			Total GHG emission (kgCO₂e/t steel)
Emission sources	CO₂	CH₄	N₂O	Total GHG emission (kgCO₂e/t steel)
Natural gas	156.41	0.304	0.091	156.81
Lump coke	31.06	0.003	0.134	31.20
Coke fines (char)	18.90	0.004	0.042	18.95
Diesel	16.02	0.023	0.046	16.10
GHG from carbon sources (kgCO₂e/t steel)	222.39	0.334	0.313	223.05
Emission from electricity (kgCO₂e/t steel)				511.71
Total GHG emission (kgCO₂e/t steel)				734.75

It is to be noted that the studied plant sources the electricity for the process from the grid, which is primarily based on lignite with a combined emission factor of 960 gCO₂e/kWh.²¹ This emission intensity is significantly higher than gas-based electricity, with an emission intensity of 570 gCO₂e/kWh, respectively.^17,22 Hence, GHG emission also varies depending on the sources of electricity and the use of other resecures.

The calculation in Figure 11 shows the GHG emission from various plant sections, including the melt shop, rod mill, and bar mill. As observed, the total GHG emission is 735 kgCO₂e/t steel, of which 80% comes from the melt shop, while the rest accounts from bar and rod mill with 10% each. Besides natural gas, the emission from other carbon sources (Lump coke, coke fines, and diesel) accounts for 66 kgCO₂e/ t steel in the melt shop.

Figure 11.

Sector-wise GHG emission from the melt shop, rod mill, and bar mill.

The calculation presented in Figure 12 predicts the emission reduction with respect to substituting natural gas with renewable hydrogen. Obviously, increasing the share of hydrogen decreases the emission linearly.

Figure 12.

GHG emission from carbon sources (excluding electricity) with respect to the substitution of natural gas with H₂.

Carbon sources (CH₄, lump coke, coke fines, diesel) emit GHG emissions of 223 kgCO₂e/t steel. Every 10% increase of hydrogen in the blend helps reduce CO₂, CH₄ and N₂O by 12.6, 0.04 and 0.01 kgCO₂e/t steel. It is possible to reduce CO₂ by 56% while CH₄ and N₂O by 100% fully by substituting natural gas 100% with renewable hydrogen. The results depict that carbon sources used in the plant emit only 30% (223 kgCO₂e/t steel) of the total emission while the rest 70% emission is emitted from grid electricity.

Moreover, hydrogen can practically reduce 56% of that 30% even if we fully replace natural gas. The remaining emission from the rest of the carbon-based sources, diesel, lump coke and coke fines, seems hard to abate, accounting for 98 kgCO₂e/t steel. Hence, more focus should be given to replacing grid electricity with renewables. Moreover, replacements of lump coke and coke fines with biochar (i.e., palm shell) or waste rubber have been suggested.^23,24 This biochar not only reduces net CO₂ emission but also reduces power consumption significantly.²⁵

The predictions presented in Figure 13a show the effect of substituting grid electricity with wind-based renewable electricity with an emission factor of 11 gCO₂/kWh. Increasing the share of renewable electricity decreases the emission from 512 to 6.0 kgCO₂e/t steel with a reduction of 50 kgCO₂e/t steel with every 10% increase in renewable electricity. The combined effect of wind electricity and hydrogen integration in the plant is shown in Figure 13b. As seen, a decrease from 735 to 104 kgCO₂e/ t steel is possible by replacing natural gas and grid electricity. Hence, an 86% reduction (69% from electricity and 17% from hydrogen) is possible by fully replacing grid electricity and natural gas.

Figure 13.

Effect of substituting grid electricity and natural gas with (a) renewable electricity and (b) hydrogen.

Conclusions and recommendations

The plant data studied in this study is a mini mill operated by InfraBuild with a production capacity of 0.75 million tonne billet from steel scrap using an electric arc furnace. The total energy consumption from natural gas is 1.2 million GJ per year, with a share of 43% in the rod mill, 39% in the bar mill and 18% in the melt shop. Besides, the plant consumes about 8400 tonnes of lump coke and 5600 tonnes of coke fines (char) in the melt shop per year. The combined CO₂ emission from electricity, natural gas, lump coke and coke fine is estimated to be 0.55 million tonnes. Excluding electricity, per tonne of steel manufacturing requires 2.9 GJ of energy, equivalent to 69 Nm³ of natural gas or 264 Nm³ of hydrogen. This volume of energy corresponds to 23.5 kgH₂/t steel. Hence, every 10% substitution of natural gas corresponds to the requirement of 0.29 GJ/t steel or 2.35 kgH₂/t steel. Currently, an estimated US$ 58 is spent per tonne of steel using 100% natural gas.

In contrast, the cost is more than double (US$ 123) using hydrogen without considering the cost of transportation and storage. Every 10% substitution of natural gas corresponds to the cost addition of about $6.7/t steel. However, in the coming years, the cost of hydrogen is expected to decrease, while the scenario is assumed to be the opposite for natural gas. The analysis shows that in 2030, the cost of using either hydrogen or natural gas would be nearly the same at $77 to 82/t steel, respectively. Hence, substituting natural gas would not necessarily affect steel production costs. The results predict that using hydrogen instead of natural gas would be substantially beneficial in 2040. Using 100% natural gas, an estimated cost per tonne of steel would be $87 compared to $44.2 from hydrogen.

The carbon footprint analysis shows that electricity is the major contributor to GHG emissions with 512 kgCO₂e/ t steel, followed by natural gas, lump coke, coke fines, and diesel. The total GHG emission from the plant is calculated to be 735 kgCO₂e/t steel, of which 70% accounts for the use of fossil dominant grid electricity and the rest 30% (223 kgCO₂e/t steel) from the use of carbon sources. Obviously, substituting natural gas with hydrogen decreases the emission linearly. However, it can only reduce emissions arising from natural gas, which is 70% of 223 kgCO₂e/t steel. The emission from the rest of the carbon-based sources accounts for 66 kgCO₂e/ t steel. As electricity is the dominant emission source, more emphasis should be given to replacing grid electricity with renewables. Increasing the share of wind-based renewable electricity can potentially reduce emissions from 512 to 6.0 kgCO₂e/t steel with a reduction of 50 kgCO₂e/t steel with every 10% substitution of grid electricity. A full substation of natural gas with hydrogen and grid electricity with renewables may potentially reduce CO₂ emission by 86%, leading to only about 104 kgCO₂e/ t steel.

Footnotes

Acknowledgements

The authors would like to acknowledge the financial support from the Victorian Hydrogen Hub (VH2), Swinburne University of Technology, Australia.

Declaration of conflicting interests

The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The authors received no financial support for the research, authorship, and/or publication of this article.

ORCID iDs

Geoffrey Brooks

M. Shahabuddin

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