Major steelmakers, including ArcelorMittal, acknowledge that key technologies for reducing emissions — hydrogen-powered direct reduction of iron (DRI) and carbon capture (CCS) — will not become economically viable in the coming years, according to the company’s 2024 sustainability report.

Major reasons for the delay

High cost of green hydrogen

• Natural gas-fired DRI steelmaking is not yet competitive with traditional blast furnaces, even after taking into account carbon charges.
• Green hydrogen remains too expensive and its widespread use in steelmaking is unlikely before 2030.

Insufficient development of CCS

• Carbon capture and storage technologies are in the early stages of implementation, and the necessary infrastructure has not yet been created.

Uncertainty in the regulatory environment

• Companies are waiting for clearer support measures from governments before making major investment decisions.

Changes in ArcelorMittal’s strategy

Instead of large-scale implementation of hydrogen technologies and CCS in the current decade, the company will focus on:

• Expanding the use of electric arc furnaces (remelting scrap metal).
• Improving the energy efficiency of existing production facilities.
• Switching to renewable energy to power enterprises.

More radical measures, such as hydrogen DRI and CCS, are considered long-term solutions that can be implemented after 2030.

Situation in the industry

• Thyssenkrupp (Germany) suspended green steel projects due to the high cost of hydrogen.
• Salzgitter continues to work on hydrogen metallurgy (SALCOS), but only with public funding.

Decarbonization outlook

1. No significant reduction in emissions from the steel industry is expected until 2030. The main progress will be achieved through scrap recycling and the use of clean energy.
2. Hydrogen and CCS remain promising technologies, but their implementation will require significant investment and political support.
3. Tighter carbon regulations (e.g. CBAM in the EU) can accelerate the transition to low-carbon production methods.

Conclusion

The decarbonization of the steel industry is proceeding more slowly than planned. Without additional incentives, deep emission reductions in the industry will be pushed back to the 2030s.