Transition of a Conventional Fossil-based Steel Mill into a Hydrogen Direct Reduction Iron and Steel Mill in an Industrial Hydrogen Valley

Many base industry sectors, such as fuel or steel industry, require fossil chemical feedstock and contribute significantly to global greenhouse-gas emissions. Novel carbon-neutral production methods for these industry sectors are often power-to-X (P2X) production concepts, requiring not only vast amounts of green power and hydrogen (H2) but also extensive investments in new production processes. Such novel production processes can come at very a high cost preventing not only investments in the new production facility but also in needed green hydrogen and renewable power production.
Obviously, affordable intermediate technical concepts and investment steps are needed on the pathway towards a completely decarbonized production process. For the steel industry, such a first low-cost investment step could be direct injection of renewable green or decarbonized turquoise H2 into existing blast furnaces (BF), replacing a significant share of needed fossil coal or coke. This kind of first step would enable a large investment in hydrogen infrastructure as well as renewable power production and open a realistic pathway towards fossil-free H2-based steel production.
Using an optimization model for Hydrogen Valley (HV) and P2X-plant investments and operation, this study evaluates the techno-economic feasibility and system-level impacts of introducing lowcarbon hydrogen—specifically electrolytic (green) and turquoise H2 —for BF-injection at a 6600 t hot metal/day (tHM/day) steel mill located within a large-scale industrial HV in Northern Finland. Supplying a stable hydrogen demand of 7.65 tH₂/h with green H2 alone would require 340–920 MW of electrolyser and 1,000–1,800 MW of wind power capacity, with resulting hydrogen costs of €3.8–€4.0/kgH2. Integrating turquoise H2 improves flexibility, reduces needed electrolyser and wind power overcapacity. However, future RFNBO-H2 quota requirements on industry in the EU significantly reduce utilization rates and increase H2 costs to €4.2–€4.3/kgH₂. All scenarios achieve similar GHG reductions of ~20–21% per tHM. H2 injection into existing BFs offers a strategic entry point for decarbonizing steel production and enabling broader H2 infrastructure deployment.