Public and private company initiatives in China
At the end of 2019, China’s second-largest steelmaker HBIS
Group announced its ambition to build a 1.2 Mt/a hydrogen-based
steelmaking plant. This is a historic step forward for the
decarbonisation of the Chinese steel industry, which represents more
than half of global steel production and related carbon dioxide
emissions.
Although it is not clear when the 1.2 Mt/a new plant will be put
into operation, HBIS Group has begun working with the Italian
company Tenova on technical preparation for ground-breaking in 2020.
This project is claiming to be the first and the largest real-life
plant using hydrogen-based technology at an industrial production
scale.
Baowu Group is also very active. In early 2019, it created a
partnership with the China National Nuclear Corporation and Tsinghua
University to develop a technology jointly to use nuclear power to
generate hydrogen to replace fossil fuel in steelmaking.
In September 2019, another medium-sized steelmaker Jiuquan Steel*,
situated in Northwest China, created a research institute to study a
new hydrogen-based ironmaking technology mixing the roles of both
hydrogen and coal. Following successful laboratory experiments, a
pilot plant will be built.
The above three are all state-owned companies, however, a
privately-owned steelmaker, Jianlong Group, the fifth-largest in
China, has also taken its first steps towards developing hydrogen
technology.
In September 2019, Jianlong Group* launched the construction work
for a 0.30 Mt/a smelting reduction plant which uses a mixture of
hydrogen and coal. Hydrogen will be extracted from the coke oven gas
and the project is scheduled for first production in October 2020.
The latest project was launched in early May 2020 by another private
steelmaker, Rizhao Steel*. The project will produce 0.5 Mt/a DRI
using hydrogen, which is extracted from the co-products of a natural
gas-based process to make vinyl acetate.
Challenges ahead for hydrogen’s widespread use
According to some analysts reports, the global hydrogen-making
capacity is about 70 Mt/a and China accounts for one-third of the
total.
So far, this hydrogen supply in China is mainly for the chemical
industry with a fraction for transportation, e.g. HBIS Group’s pilot
hydrogen station for refuelling of heavy trucks which was commenced
on 28 August 2020.
Therefore, the existing hydrogen-making capacity in China is not
sufficient to support the steel industry.
HBIS Group pilot hydrogen station for refuelling of heavy trucks
In addition to availability, the cost of hydrogen is another
challenge. With the current hydrogen market price in China
(approximately RMB 60,000/tonne / Euros 7,800/tonne), the energy
cost of the hydrogen-based ironmaking technology would be more than
five times costlier than the traditional blast furnace technology.
Hydrogen production levels and its cost will therefore need to be
resolved for it to become a viable solution. This will require
engagement and funding.
China trading system supporting decarbonisation
Decarbonisation is a core challenge ahead for the Chinese steel
industry. In 2019, China produced 996 Mt of crude steel, of which
approximately 780 Mt or 78% was produced from iron ore with coal as
the primary source of energy, the remaining 22% was from recycled
steel.
Since 2011, a few Chinese steelmakers have been involved in a pilot
system for carbon emission trading established by the central
government.
In December 2017, the Chinese government officially launched its
carbon emission trading system with power generation being the first
sector covered. It was reported that the steel industry will also
soon be covered by the carbon trading system, which will push the
steelmakers to allocate more resources to look for low-carbon energy
such as hydrogen.
Long-term – a promising outlook?
All in all, this is looking very promising, and it only goes to
confirm worldsteel’s conviction that globally with the combined
efforts of all the players in the industry, new carbon-neutral
technologies will emerge. The question is when is this likely to
happen.
Source from World Steel Association |