Green steel alone can double global hydrogen demand - India Renewable Energy Consulting – Solar, Biomass, Wind, Cleantech
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Net Zero by Narsi is a series of brief posts by Narasimhan Santhanam (Narsi), on decarbonization and climate solutions.
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The world annually produces about 100 million tons of (conventional, grey) hydrogen, used mainly in fertilizer production and oil refining.

About 2 billion tons of steel are produced annually around the world.

The global steel industry is one of the largest CO2 emitting sectors (about 10% of all CO2 emissions), and is regarded as a hard-to-abate sector – that is, a sector in which it is difficult to significantly bring down CO2 emissions by just using low-hanging avenues such as switching over to renewable electricity.

The steel industry is under significant pressure to decarbonize, with regulations and mandates driving its greening. It could hence become one of the first new, large off-takers for green hydrogen – in fact, this seems to be 𝐨𝐧𝐞 𝐨𝐟 𝐭𝐡𝐞 𝐟𝐞𝐰 𝐢𝐧𝐝𝐮𝐬𝐭𝐫𝐢𝐞𝐬 that have a strong business case for large scale green hydrogen in the medium term (around 2030).

Given all the above, I was interested in knowing how much green hydrogen would be needed to completely decarbonize the global steel industry.

Well, the answer might not be straightforward as there are quite a few scenarios, but my reading suggests that if the global steel industry were to completely decarbonize using green hydrogen as the key driver, this sector alone will annually require about 100 million tons of green hydrogen.

𝘑𝘶𝘴𝘵 𝘰𝘯𝘦 𝘪𝘯𝘥𝘶𝘴𝘵𝘳𝘺 – 𝘴𝘵𝘦𝘦𝘭 – 𝘩𝘢𝘴 𝘵𝘩𝘦 𝘵𝘩𝘦𝘰𝘳𝘦𝘵𝘪𝘤𝘢𝘭 𝘱𝘰𝘵𝘦𝘯𝘵𝘪𝘢𝘭 𝘵𝘰 𝘥𝘰𝘶𝘣𝘭𝘦 𝘵𝘩𝘦 𝘵𝘰𝘵𝘢𝘭 𝘤𝘶𝘳𝘳𝘦𝘯𝘵 𝘩𝘺𝘥𝘳𝘰𝘨𝘦𝘯 𝘥𝘦𝘮𝘢𝘯𝘥 𝘸𝘰𝘳𝘭𝘥𝘸𝘪𝘥𝘦.

Even at $2/Kg, that would be a new $200 billion business opportunity, from just one industry – about the same size as the TOTAL global solar power market currently.

Even a fraction of this potential could take quite a long while to fructify, but these are the raw numbers.

Cement is another hard-to-abate sector with potential for large GH2 offtakes…sectors such as Aluminium etc. could offer reasonable potential as well in similar contexts.

Green hydrogen is still in its early stages. While optimists might claim it is round the corner – without being too specific about how far the corner is – one of the reasons even hard-headed folks are attracted to it is because of its ability to decarbonize hard-to-abate sectors such as steel, and the ensuing large business that opens up.

Here’s a lovely representation of the green steel sector by the creative folks at Visual Capitalist –

(See all my decarbonization posts from 𝐍𝐞𝐭 𝐙𝐞𝐫𝐨 𝐛𝐲 𝐍𝐚𝐫𝐬𝐢 – )

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About Narasimhan Santhanam (Narsi)

Narsi, a Director at EAI, Co-founded one of India's first climate tech consulting firm in 2008.

Since then, he has assisted over 250 Indian and International firms, across many climate tech domain Solar, Bio-energy, Green hydrogen, E-Mobility, Green Chemicals.

Narsi works closely with senior and top management corporates and helps then devise strategy and go-to-market plans to benefit from the fast growing Indian Climate tech market.

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