PhD student Süheyb Bilici publishes analysis of global trade in green iron

Currently, the most promising approach to reducing CO2 emissions in global steel production is to reduce iron ore in shaft furnaces using (green) hydrogen instead of blast furnaces. In contrast to the liquid iron produced in blast furnaces, the directly reduced iron (green iron) is in a solid state and can be transported over long distances at low cost. This enables a spatial decoupling of the iron production process from the steelmaking process and could lead to a global trade in green iron as a new intermediate product in the steel value chain. The article assesses the potential impact of global trade in green iron in terms of shifting energy demand between regions and cost savings by comparing three scenarios for a near GHG-neutral steel industry: The "Domestic" scenario, which assumes strict regional coupling of green iron and steel production; the "Max Trade" scenario, which assumes the early emergence of a global market for green iron; and the "Intermediate Trade" scenario, which assumes the later emergence of such a market. In the trade scenarios, 12-21% of global crude steel in 2050 is produced from traded green iron. 15-26 million tons of hydrogen consumption per year are shifted to global "sweet spots", resulting in global savings of 2.2-3.9% in steel production costs. These savings could provide important support for the development of climate-neutral steel production. The analysis also discusses the drivers and barriers to global trade in green iron.

Süheyb Bilici is a PhD student in the section Sustainable Technology Design and his analysis was developed within the Horizon Europe research project NDC ASPECTS.

The article can be downloaded from the website of the journal Energy and Climate Change.