Importing green iron saves 75% of transport capacity needs compared to separate hydrogen and iron ore shipments
London, 25 February 2025 – Shipping green sponge iron from countries rich in renewable energy will be one solution to the elephant in the room at key steel summits this week, with SteelWatch showing that importing just the green iron briquettes will result in almost 75% less material being shipped than importing hydrogen and iron ore separately.
To supply the inputs for a 2.5 mtpa direct reduced iron (DRI) plant when they are not available locally, 3.5 million cubic metres of hydrogen and iron ore need to be imported. In contrast, shipping 2.5 million tonnes of green sponge iron from a DRI plant overseas with locally available hydrogen and iron ore to an electric arc furnace (EAF) involves moving 0.75 – 1 million cubic metres of materials. It therefore takes roughly four times more transport capacity to ship both the hydrogen and the ore separately, than it does just shipping DRI in hot briquetted iron (HBI) form.(1)
At this week’s World Hydrogen UK Intelligence Day in London and the Global Steel Sustainability Europe Summit in Frankfurt, much will be heard from companies about the lack of green hydrogen availability for steel decarbonisation. SteelWatch will challenge companies and governments to think more holistically about their green steel plans, and work closer with international partners to solve challenges.
“The costs of building DRI plants and securing electrolysers will be pricey in any country, but as the unavoidable transformation from dirty coal-based production to fossil-free steel accelerates, steelmakers have to be smart about where to find savings. Importing green iron from our trading partners and allies to supplement the feed to UK and EU electric arc furnaces is the most obvious opportunity that is simply not getting publicly discussed,” said Caroline Ashley, Executive Director of SteelWatch and panelist at this week’s events.
Savings also go beyond just shipping capacity, as countries with abundant renewable energy resources, such as Australia, Canada, South Africa, Spain and Brazil,(2) will need fewer solar panels, less land, and/or fewer wind turbines, while also producing cheaper electricity in larger amounts to convert into clean hydrogen. RMI estimates cost savings of around 20% per tonne of steel, compared to producing DRI in the UK for example.(3)
“Key decisions are being made right now, with the UK Government launching a consultation on its steel strategy, and the EU’s Clean Industrial Deal tomorrow will be followed by a Strategic Metals Action Plan. Companies and policy-makers alike need to work out how much green iron can be produced ‘at home’ and start building partnerships to import the rest. To ensure this critical industry supports European economies with quality steel and decent jobs, we need to get out of a country-by-country mindset and embrace a unified, end-to-end approach. In the economy of the future, driven by renewable energy, producing iron where it is most efficient will help protect steel and climate alike.”
ENDS
Contacts:
Caroline Ashley
Director, SteelWatch (United Kingdom, GMT)
[email protected], +44 7947 691 911
Julia Karlysheva
Communications, SteelWatch (The Netherlands, CET)
[email protected]
Greg McNevin
Communications, SteelWatch (Australia, GMT+11)
[email protected], +61 0475 247 044
Key dates:
Caroline Ashley, Executive Director at SteelWatch is to speak at the following panels this week:
- World Hydrogen UK Intelligence Day – London, 25 February 2025
Fuelling Demand: Exploring Hydrogen Applications Across Diverse Industries (11.20 GMT)
- Global Steel Sustainability Europe Summit – Frankfurt, 26 February 2025
Direct reduced iron: A key enabler for the future of green steelmaking (11.40 CET)
Notes:
- A direct reduced iron (DRI) plant producing 2.5 mtpa requires around 135,000 tonnes of green hydrogen and 3.6 million tonnes of iron ore pellets. Transport volume is calculated assuming green iron is transported as HBI, and hydrogen is transported as liquid hydrogen, and based on densities as follows: HBI density of 2.5-3.3 tonnes / m3; iron ore density of 2.2 tonnes / m3 of iron ore pellets; liquid hydrogen, with density of 0.07 tonne / m3. Importing both hydrogen and iron ore to the DRI plant thus requires 3.5 million cubic metres of hydrogen and iron ore to be imported. By comparison shipping 2.5 million tonnes of HBI requires 0.75 – 1 million cubic metres of volume. It therefore takes an estimated 3.5 – 4.7 times more transport capacity to ship both the hydrogen and the ore, than it does just shipping DRI in hot briquetted iron (HBI) form. SteelWatch calculation, 2025.
- Many countries are dependent on others for iron ore and metallurgical coal. Double handling and associated costs can be eliminated by shipping Green DRI from countries with both the ore and abundant potential for producing green iron. These include Canada, Australia, Brazil, and South Africa internationally, and Sweden, Spain and Portugal inside the EU.
- RMI and the Green Hydrogen Catapult, Green Iron Corridors: Transforming the Steel Supply Chains for a Sustainable Future, September 2024. https://rmi.org/insight/green-iron-corridors
Read more:SteelWatch Explainer: Why smart use of green hydrogen is critical for steel decarbonisation
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