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Towards a Carbon-Free Steel Industry: Hydrogen in Steelmaking and the HYDRA Project
ANTONIO PAIANO

The steel industry plays a fundamental role in modern society, providing essential materials for construction, transportation, energy infrastructure, and manufacturing. Despite its strategic importance, steel production remains one of the most carbon-intensive industrial activities worldwide, accounting for approximately 7–9% of global CO₂ emissions. The sector's heavy reliance on fossil fuels, particularly coal and coke in conventional blast furnace-basic oxygen furnace (BF-BOF) routes, has made steelmaking one of the most challenging industries to decarbonize. In response to the growing urgency of climate change and the ambitious climate neutrality targets established by the European Green Deal and the Paris Agreement, the steel sector is undergoing a profound technological transformation aimed at achieving near-zero greenhouse gas emissions. This thesis investigates the opportunities and challenges associated with the transition towards green steel production, with particular emphasis on the role of hydrogen and the development of innovative pilot projects such as HYDRA.

The study begins with an analysis of conventional steelmaking technologies and their environmental impacts. The BF-BOF route, which remains the dominant production pathway globally, relies on carbon-intensive reduction processes where coke acts both as a fuel and reducing agent. This results in average emissions of approximately 1.9 tonnes of CO₂ per tonne of steel produced. While improvements in energy efficiency and process optimization have reduced emissions over recent decades, these measures alone are insufficient to achieve the deep decarbonization required to meet long-term climate objectives. The research highlights the limitations of traditional steelmaking and the growing importance of alternative technologies capable of significantly lowering emissions while maintaining industrial competitiveness.

A substantial part of the work is dedicated to examining the regulatory framework shaping the decarbonization of the European steel industry. Key policy instruments, including the European Union Emissions Trading System (EU ETS), the Carbon Border Adjustment Mechanism (CBAM), and the European Green Deal, are analyzed in terms of their impact on industrial competitiveness and climate performance. These initiatives create strong incentives for low-carbon investments while protecting European manufacturers from carbon leakage. At the same time, the study discusses the challenges associated with increasing operational costs and the need for substantial public and private investments to support the transition toward sustainable steel production.

The thesis explores three major decarbonization strategies currently being pursued across the steel sector: Carbon Capture and Utilization/Storage (CCUS), Process Integration (PI), and Carbon Direct Avoidance (CDA). CCUS technologies focus on capturing carbon dioxide generated by existing industrial processes and either storing it permanently or converting it into valuable products. Experimental evidence suggests that these systems can capture over 90% of emissions from conventional steel plants, offering a transitional solution while more radical technologies mature. Process Integration approaches, on the other hand, improve the efficiency of existing facilities through energy recovery, gas recycling, and optimization of material and energy flows. While these strategies provide meaningful emission reductions, they are unlikely to achieve full carbon neutrality independently.

Among the available decarbonization pathways, Carbon Direct Avoidance emerges as the most promising long-term solution. This approach fundamentally redesigns steelmaking by replacing fossil fuels with renewable electricity and hydrogen-based processes. Central to this transformation is the Direct Reduced Iron-Electric Arc Furnace (DRI-EAF) route, in which hydrogen is used as the reducing agent to convert iron ore into metallic iron, producing water vapor instead of carbon dioxide as the primary reaction by-product. Combined with renewable electricity, hydrogen-based DRI-EAF technology has the potential to reduce steel-related emissions to near-zero levels, representing a paradigm shift in industrial metallurgy.

Hydrogen is therefore examined as a critical enabler of low-carbon steel production. The thesis provides a detailed overview of hydrogen production pathways, including grey, blue, and green hydrogen. Particular attention is devoted to green hydrogen produced through water electrolysis powered by renewable energy sources, which represents the only truly carbon-neutral option. The study discusses the technological maturity, advantages, and limitations of various electrolysis technologies, including alkaline electrolysis, proton exchange membrane (PEM) systems, solid oxide electrolysis cells (SOEC), and emerging technologies such as anion exchange membrane (AEM) electrolysis. Although green hydrogen offers substantial environmental benefits, challenges related to production costs, scalability, and renewable electricity availability continue to limit widespread deployment.

In addition to production technologies, the research investigates hydrogen storage and transportation systems. Due to hydrogen's low volumetric energy density, effective storage solutions are essential for large-scale industrial adoption. The study evaluates compressed gas storage, liquefied hydrogen, geological storage in salt caverns and depleted gas reservoirs, and chemical carriers such as ammonia and liquid organic hydrogen carriers (LOHCs). It also discusses the development of hydrogen pipeline networks, including the European Hydrogen Backbone initiative, which aims to establish an integrated hydrogen infrastructure across Europe. The creation of robust hydrogen supply chains is identified as a prerequisite for the successful decarbonization of the steel sector.

The thesis further examines innovative hydrogen-based ironmaking technologies, including the MIDREX and HYL-Energiron direct reduction processes. These technologies have demonstrated significant potential for reducing emissions while maintaining high production efficiency. HYL-Energiron systems, in particular, integrate carbon capture and gas recycling functionalities, enabling emission reductions of up to 90% compared to traditional BF-BOF routes. The research also reviews emerging technologies such as hydrogen plasma steelmaking, which could theoretically eliminate direct carbon emissions entirely, although these technologies remain at relatively low technology readiness levels.

A critical challenge associated with hydrogen adoption is hydrogen embrittlement, a phenomenon that can significantly affect the mechanical properties of steels and metallic infrastructures. The thesis investigates the mechanisms responsible for hydrogen-induced degradation, including Hydrogen Enhanced Decohesion (HEDE), Hydrogen Enhanced Localized Plasticity (HELP), and other microstructural interactions. Various mitigation strategies are presented, including material selection, microstructural engineering, protective coatings, post-processing treatments, and advanced monitoring techniques. These solutions are essential for ensuring the reliability and safety of future hydrogen-based industrial systems.

The final section of the thesis focuses on the HYDRA project, an innovative pilot initiative promoted RINA-CSM, and developed as part of the European IPCEI framework. HYDRA aims to establish Italy's first integrated hydrogen-based steelmaking platform, capable of testing and validating every major stage of the green steel value chain, from hydrogen-compatible materials and direct reduction technologies to electric arc furnace melting and downstream thermal treatments. The project is designed as an open innovation platform, fostering collaboration among industry, research institutions, and technology providers. Its experimental facilities include an ENERGIRON-ZR pilot direct reduction reactor, a pilot electric arc furnace, and advanced combustion systems for hydrogen utilization. The project represents a strategic effort to accelerate the industrial adoption of hydrogen technologies while building technical expertise and supporting Europe's broader decarbonization objectives.

In conclusion, the transition to green steel represents both an urgent environmental necessity and a major industrial opportunity. While significant technical, economic, and infrastructural barriers remain, hydrogen-based steelmaking offers a credible pathway toward a carbon-neutral future. Achieving this vision will require coordinated efforts in technology development, renewable energy deployment, hydrogen infrastructure expansion, regulatory support, and workforce development. Projects such as HYDRA demonstrate that the transition is already underway and provide valuable evidence that a competitive, sustainable, and carbon-free steel industry is both technically feasible and strategically essential for achieving global climate goals.

RINA Consulting - Centro Sviluppo Materiali S.p.A., Via di Castel Romano 100, 00128 Rome (RM), Italy

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Funded by the European Union. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or the granting authority. Neither the European Union nor the granting authority can be held responsible for them.

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