Hydrogen made from clean power will be the cheapest way to bring emissions from steel production near zero by 2050, according to a BloombergNEF report.
While making green steel with hydrogen requires a price premium now, the process will likely be cheaper than coal- or natural gas-based production by mid-century, though that would require building new plants, BNEF said.
Geography will also determine the most cost-effective way to produce green steel. A country with abundant hydrogen supplies could make it the dominant fuel for steel production, while a nation rich in hydropower or another clean energy source could directly electrify steelmaking through a process called molten oxide electrolysis, BNEF said.
Other technologies to decarbonise steel include recycling, carbon capture, alternative iron-making processes and carbon offsets. A combination of these will likely be needed on a global scale, BNEF said.
“We expect that the cost of many of these technologies can fall by realizing economies of scale and greater efficiency,” BNEF said.