Green steel opportunity in the Middle East and North Africa |...

Green steel opportunity in the Middle East and North Africa | IEEFA



The global steel industry is eyeing a switch to direct reduced iron (DRI) using green hydrogen to reduce emissions. Unlike the blast furnace-basic oxygen furnace (BF-BOF) process that uses coal to make iron, the direct reduced iron-electric arc furnace (DRI-EAF) route predominantly uses natural gas, which produces lower carbon emissions.

The Middle East and North Africa (MENA) region is potentially in a good position to begin producing carbon-neutral or green steel, as it has particular advantages over other areas in the world.Its steel sector is already dominated by DRI with an established supply of DR-grade iron ore. Technical barriers may make it difficult to ramp up DR-grade iron ore production to supply other regions.

The International Energy Agency (IEA) in its Net Zero Emissions scenario models the global share of hydrogen-based (H2) DRI-EAF production reaching 29% of primary steelmaking by 2050. BloombergNEF estimates that 56% (840 Mt) of primary steel production will come from H2DRI-EAF by 2050 in a net zero emissions scenario. MENA’s transition to H2DRI-EAF could commence immediately due to the region having more DRI plants than anywhere else globally.

Demand for green steel is rising globally, led by European car manufacturers. With the European Union soon establishing a Carbon Border Adjustment Mechanism, MENA steel exports would have an advantage if they were zero carbon.