Hydrogen blending for partial decarbonisation in a steel melt shop: A year-long comprehensive analysis across multiple scenarios

The iron and steel industry, accounting for 7% of global greenhouse gas emissions and 33% of industrial CO₂ emissions, faces significant challenges in achieving carbon-neutral operations due to the limited availability of alternative high-temperature fuels. This study investigates the feasibility of hydrogen integration in a Spanish steel plant, targeting a 30% replacement of natural gas with hydrogen across all furnaces over a one-year period. A techno-economic analysis incorporating four optimisation scenarios and multiple sensitivity analyses identifies the optimal hydrogen integration model as the most effective approach. The results indicate that hydrogen production via solar-powered electrolysis requires a 294.43 MW photovoltaic plant and a 109.5 MW electrolyser, leading to a hydrogen production cost of 4.49 €/kg, approximately 2.5 times higher than natural gas. This cost disparity is attributed to high capital expenditures and Weighted Average Cost of Capital (WACC) rates. Power Purchase Agreements (PPAs) emerge as the most economically viable strategy for scaling up green steel production. The proposed transition is projected to reduce CO₂ emissions by 163,115 tons annually. However, addressing economic constraints through technological innovation, regulatory incentives, and investment frameworks will be crucial for the large-scale adoption of hydrogen-based steelmaking. Implementing Carbon Capture, Utilisation, and Storage (CCUS) in the steel sector can significantly reduce CO₂ emissions by trapping and either storing or repurposing the carbon emissions generated during production. Additionally, recovered CO₂ can be combined with hydrogen to produce synthetic fuels through processes like power-to-methane or power-to-methanol, which could further enhance sustainability by recycling these fuels within the facility or injecting them into the gas grid.