Hydrogen in steel: Addressing emissions and dealing with overcapacity

Oecd

No 174, OECD Science, Technology and Industry Policy Papers from OECD Publishing

Abstract: The adoption of hydrogen in steelmaking presents a significant opportunity to decarbonise the industry, potentially reducing emissions by up to 90% compared to traditional methods. However, the glut of overcapacity undermines the transition to hydrogen-based solutions, limiting investment and delaying progress. This paper explores the prospects for hydrogen-based steelmaking in a low-carbon future, set against a backdrop of overcapacity and market distortions, highlighting how these challenges compound to the inherent difficulties of deploying such solutions. It reviews current investments, corporate strategies, and government policies that facilitate the adoption of hydrogen as a pathway for low-carbon steelmaking. The paper also emphasises the need to prioritise the steel sector as a key end-use for hydrogen, given its potential to significantly reduce emissions, and discusses principles to ensure that government support for hydrogen-based solutions does not lead to further market distortions.

Keywords: Decarbonisation; Hydrogen; Hydrogen-based solutions; Low-carbon; Market distortions; Overcapacity; Steel; Steelmaking (search for similar items in EconPapers)
Date: 2025-03-28
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Persistent link: https://EconPapers.repec.org/RePEc:oec:stiaac:174-en

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