Emission Mitigation in the Global Steel Industry: Representing CCS and Hydrogen Options in Integrated Assessment Modeling

Abstract

We conduct a techno-economic assessment of two low-emissions steel production technologies and evaluate their deployment in emissions mitigation scenarios utilizing the MIT Economic Projection and Policy Analysis (EPPA) model. The two technologies are steelmaking equipped with carbon capture and storage (CCS) and hydrogen-based steelmaking. Our technoeconomic analysis based on the current state of technologies found that the steelmaking equipped with carbon capture and storage increased costs ~7% relative to the conventional steel technology. The hydrogen-based steelmaking increased the costs by ~18% when utilizing Blue hydrogen and ~77% when using Green hydrogen. The exact pathways for hydrogen production in different world regions and CCS and hydrogen deployment in steelmaking are highly speculative at this point, but actions in the forms of research and development (R&D), technology demonstration, technology transfers, infrastructure development and policy incentives could speed up the transition to a low-emitting steelmaking industry. Our findings can be used to help decision-makers assess various decarbonization options and design economically efficient pathways to reduce emissions in the steel industry and other hard-to-abate sectors. Our cost evaluation can also be used for other energy-economic and integrated assessment models to provide insights on future decarbonization pathways.

Keywords: carbon capture, hydrogen, steel production, decarbonization, integrated assessment