Gert van Poelwrode, the head of ArcelorMittal’s European division, has expressed skepticism regarding the practicality of utilizing green hydrogen for steel production within the EU. Despite receiving substantial subsidies for relevant equipment, he suggested that importing Direct Reduced Iron (DRI) might be a more viable option for producing low-carbon steel.
According to van Poelwrode, the high cost of “green” hydrogen in Europe could render it economically unfeasible for steel plants. He emphasized concerns about market competitiveness and the potential exclusion from international markets should they opt for hydrogen-based steel production.
While policymakers advocate for decarbonization efforts in the steel sector through the utilization of DRI produced with “green” hydrogen, van Poelwrode’s comments underscore apprehensions that ArcelorMittal’s planned installations may not immediately adopt this approach, despite substantial government subsidies.
The company anticipates significant grants from various European governments to facilitate the transition to “green” steel production, with an estimated total subsidy amounting to €1.65 billion. However, van Poelwrode noted that cost-effective hydrogen pricing, around €2/kg, is essential to ensure the competitiveness of low-carbon steel derived from it, even with progressive carbon emission taxes in Europe.
Furthermore, he highlighted the challenges of green hydrogen production costs in Europe, which can reach €6-7/kg under current electrolysis schemes. Importing “green” hydrogen, although cheaper in regions like Africa, would still incur substantial transportation costs, approximately €1.5/kg.
The decarbonization of the steel industry remains a pivotal issue in 2024, with the availability of environmentally friendly hydrogen and competitively priced renewable energy playing crucial roles in the process.
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