Hilton Trollip, Bryce McCall, Chris Bataille in a recently published study have highlighted that producing Green Hydrogen Direct Reduced Iron in South Africa could help global decarbonization. They said “Green primary iron imports from SA to the EU could reduce the cost of overall decarbonization while increasing the competitiveness of steel product manufacturing. Green primary iron imports can reduce demands on EU low carbon electricity supply, lowering electricity prices and increasing energy security. The collaboration envisioned between the EU and SA could help develop the framework for future inter-regional decarbonization strategies for other commodities and other countries.”The production of iron and steel is one of the largest global sources of industrial greenhouse gas emissions. South Africa could competitively export near-zero embodied GHG primary iron to steelmakers in leading decarbonizing markets. A green primary iron production process substitutes hydrogen for coke as the iron ore reductant. A South Africa plant would enjoy most of its competitive cost advantage from hydrogen produced using very low-cost solar photovoltaic electricity. This new South African export commodity would also not be vulnerable to trade measures such as a looming EU carbon border adjustments mechanism and could, thus, help offset revenue losses that will arise as global demand for coal, a major South African export earner, tapersThe authors calculate that a GHDRI plant able to produce at a yearly rate of one-million tonnes, could yield export earnings of between USD 300-million and USD 500-million a year. Coal exports of some 70 million tonnes per annum earn some USD 5 billion per year. Thus, each 1 million tonne per annum GHDRI plant could replace export revenue losses from 7 million tonne of coal. Using these assumptions, it would take ten such plants to replace the entire value of lost coal export earnings and associated tax revenueThree things are needed to unlock new global business models involving the relocating of green primary iron production to regions with abundant renewable energy(1) A steelmaker with access to a hydrogen reduction technology appropriate for South Africa’s ores willing and able to invest in a plan(2) Access to a bankable lead market for that plant’s production(3) International trade rules and emissions accounting related to the carbon content of commodities that enable the reconfiguration of supply chains to reduce global decarbonization costsThis work was supported by Agence Nationale de la Recherche: Bundesministerium für Umwelt, Naturschutz und Reaktorsicherheit
Hilton Trollip, Bryce McCall, Chris Bataille in a recently published study have highlighted that producing Green Hydrogen Direct Reduced Iron in South Africa could help global decarbonization. They said “Green primary iron imports from SA to the EU could reduce the cost of overall decarbonization while increasing the competitiveness of steel product manufacturing. Green primary iron imports can reduce demands on EU low carbon electricity supply, lowering electricity prices and increasing energy security. The collaboration envisioned between the EU and SA could help develop the framework for future inter-regional decarbonization strategies for other commodities and other countries.”The production of iron and steel is one of the largest global sources of industrial greenhouse gas emissions. South Africa could competitively export near-zero embodied GHG primary iron to steelmakers in leading decarbonizing markets. A green primary iron production process substitutes hydrogen for coke as the iron ore reductant. A South Africa plant would enjoy most of its competitive cost advantage from hydrogen produced using very low-cost solar photovoltaic electricity. This new South African export commodity would also not be vulnerable to trade measures such as a looming EU carbon border adjustments mechanism and could, thus, help offset revenue losses that will arise as global demand for coal, a major South African export earner, tapersThe authors calculate that a GHDRI plant able to produce at a yearly rate of one-million tonnes, could yield export earnings of between USD 300-million and USD 500-million a year. Coal exports of some 70 million tonnes per annum earn some USD 5 billion per year. Thus, each 1 million tonne per annum GHDRI plant could replace export revenue losses from 7 million tonne of coal. Using these assumptions, it would take ten such plants to replace the entire value of lost coal export earnings and associated tax revenueThree things are needed to unlock new global business models involving the relocating of green primary iron production to regions with abundant renewable energy(1) A steelmaker with access to a hydrogen reduction technology appropriate for South Africa’s ores willing and able to invest in a plan(2) Access to a bankable lead market for that plant’s production(3) International trade rules and emissions accounting related to the carbon content of commodities that enable the reconfiguration of supply chains to reduce global decarbonization costsThis work was supported by Agence Nationale de la Recherche: Bundesministerium für Umwelt, Naturschutz und Reaktorsicherheit