Mitsubishi Heavy Industries, a Japanese company is constructing the world’s largest net-zero carbon emissions hydrogen steel plant in Austria. Through a British unit, Mitsubishi Heavy is constructing the pilot plant at a complex of Austrian steelmaker Voestalpine. The trial operation is scheduled to begin later this year. The plant will use hydrogen instead of coal in the reduction process for iron ore. The next-generation equipment will produce 250,000 tons of steel product a year. The global steel industry generated about 2 billion tons of Carbon Dioxide in 2018, according to the International Energy Agency (IEA), double the volume in 2000. The steel sector’s share among all industries grew BY 5% to 25%.
Mitsubishi Heavy’s plant adopts a hydrogen-consuming reduction process called direct reduced iron (DRI). DRI equipment produces less steel than blast furnaces typically used, and they require half the investment, which is approximately US$4.8 billion out of the total US$9.6 billion. However, since DRI produces less steel, low-cost hydrogen will be essential for attaining the same level of cost-competitiveness as blast furnaces. Iron ore reduction accounts for much of the CO2 emissions in steelmaking. Japanese steelmakers including Nippon Steel are developing hydrogen-consuming reduction processes based on the conventional blast furnace design.
Mitsubishi Heavy is currently the world’s third-largest steelmaking equipment supplier and is taking it a step further by securing a hydrogen supply chain. It has already purchased a stake in a Norwegian outfit that makes hydrogen-producing equipment and plans to acquire stakes in hydrogen producers in Australia, among other places. The company will oversee equipment engineering and construction and the supply of hydrogen once operational. In doing so, it will capture the steel industry’s demand for hydrogen as it decarbonizes. The European Union announced in July an initiative to invest US$572 billion in hydrogen by 2050. Hydrogen steel plants are anticipated to receive support. Europe is home to a growing number of businesses that deal in hydrogen.