Mining and metals firm BHP and South Korean steelmaker Posco are to undertake trials to use hydrogen-based direct reduction technology to reduce the carbon intensity of the steelmaking process.

The firms will also investigate optimising coke quality and assessing carbon capture storage and utilisation options, as well as the use of biomass and offsets.

Hydrogen direct reduction converts pre-heated iron ore into direct reduced iron (DRI) by using hydrogen as a reducing agent and energy source. DRI can be fed into an electric arc furnace to produce steel.

Studies by Lund university in Sweden have shown that the steel produced can be competitive with that manufactured using conventional methods at today’s electricity prices plus a carbon price of €50/t ($58.3/t) CO₂—well below current prices in the EU emissions trading scheme.

“Steel is a critical product for the world to grow and decarbonise, and we must work hard together to enable greener steel, reducing carbon intensity in the blast furnace and testing new technologies for steel production,” says BHP chief commercial officer Vandita Pant.

BHP intends to invest up to $10mn over the next five years under the agreement, drawn from its $400mn Climate Investment Program released in 2019. The firm recently announced a goal to pursue net-zero scope three emissions by 2050.

“We must work hard together to enable greener steel” Pant, BHP

BHP has existing partnerships established with major steelmakers China Baowu, JFE Steel and HBIS Group to explore emissions reduction.

Posco has already announced plans to move into green hydrogen, aiming to produce 5mn t by 2050 to supply its own decarbonised steelmaking processes and to sell to other industrial sectors. The firm already produces 7,000t of hydrogen as a byproduct of its steelmaking processes.

“Though achieving carbon neutrality is a difficult path ahead, with Posco working together with BHP’s outstanding mining expertise and the will to achieve a low-carbon future, I have every reason to believe that we can create a significant turning point in carbon emission reduction across our value chain,” says the head of Posco’s steel business unit, Hag-Dong Kim.

---

Author: Tom Young