'Steel sector's bond with hydrogen will become visceral' – ArcelorMittal Brasil exec

The steel sector's bond with hydrogen will become visceral, said Guilherme Abreu, general manager of sustainability at ArcelorMittal Brasil, during the Enase national meeting of electricity sector agents in Rio de Janeiro.  

"Since the steel sector accounts for 9% of global emissions, the honorable way forward would be hydrogen, which acts as a great reducing agent, combining with oxygen," he explained.  

Reduction consists of the transformation of iron ore into liquid pig iron in the blast furnace and, in the end, into liquid steel. Today, the main reducing agent used by the industry is fossil carbon. 

In the coming decades, steel production will be done very differently, likely with direct reduction reactors and electric furnaces, and using large amounts of hydrogen.

"But it will be necessary to convert the steel industry's assets for this. The first entrants will dictate the rules, but they will suffer a lot," said Abreu. 

He said he had no doubt that Brazil would be a leader in the production of green hydrogen, but warned that the industry needs a price of US$2/kg. 

The executive said that one of the major challenges is the logistics of hydrogen to enable it to arrive to large consumers in adequate quantities, on a continuous basis and at an acceptable price. 

"I think this is something that, at first, isn't being properly assessed and could become a major bottleneck," he underscored.

Globally, steel companies are engaged in a series of efforts to reduce their greenhouse gas footprint at different stages of their production, including seeking higher-quality iron ore as an input, which reduces carbon emissions for steel output by up to 10%.

REGULATORY FRAMEWORK

On Wednesday, the senate approved the bill, with amendments, that establishes the regulatory framework for the production of low-carbon hydrogen and determines tax and financial incentives for the sector. 

Amendments by senators that have been singled out for separate votes remain to be voted on, and will be debated in a session that has yet to be defined.

Once the vote is over, the text will have to go back to the lower house for further analysis. 

The bill defines rules and benefits to stimulate the hydrogen fuel industry in Brazil. The aim is to help decarbonize the Brazilian energy matrix.