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Middle East and North Africa in pole position to be global leaders in Green Steel – EQ Mag Pro
MENA has an established supply of DR-grade iron ore and its iron ore pelletising plants are among the world’s largest. MENA region can lead global steel decarbonization with investment in green hydrogen and renewable energy.
According to the new report by IEEFA, the Middle East and North Africa (MENA) region is in a prime position to start producing carbon-neutral or green steel.
Steel sector is assumed to be hard-to-abate in decarbonization as it uses coal in the world’s dominant steelmaking technology (i.e.BF-BOF).
The global steel industry eyes switching to direct reduced iron (DRI) production and using green hydrogen to reduce emissions.
Primary steelmaking in MENA is dominated by DRI-EAF technology, which releases lower emissions than BF-BOF process. The region produced just 3% of global crude steel in 2021 but it accounted for nearly 46% (55 Mt) of the world’s DRI production.
Initially, it would be possible to replace 30% of natural gas with hydrogen in the incumbent fleet of DR plants without any major equipment modifications. The region could then move towards 100% green hydrogen to produce carbon-free steel.
MENA has an established supply of DR-grade iron ore and its iron ore pelletising plants are among the world’s largest. Unlike other parts of the world, supplying high grade pellet is not a big challenge for MENA’s steel producer.
“The MENA region can lead the world if it shifts promptly to renewables and applies green hydrogen in its steel sector.” Soroush Basirat, energy finance analyst, IEEFA
Compared to other regions, MENA’s transition to green steel is simpler and cheaper. The existing DRI-EAF capacity means no extra investment is needed for replacing the base technology. All new investment could be focused on expanding production of green hydrogen among other renewables.
MENA has excellent solar resources to aid production of green hydrogen from renewable electricity. The World Bank found MENA has the highest photovoltaic power potential capacity globally and could theoretically produce more than 5.8 kilowatt hours (kWh) per square metre daily. According to IEA, with MENA’s available capacity, producing green hydrogen below US$1/kg is achievable by 2050.
“MENA’s access to rich solar energy resources will allow for production of green hydrogen at a competitive price.” Soroush Basirat, energy finance analyst, IEEFA
MENA’s knowledge of this specific steel technology is an invaluable asset. This production knowledge, abetted by further work on iron ore beneficiation, pelletising and DR plants, is among the most important steel decarbonization pillars, and will greatly assist MENA’s transition.
Egypt, Saudi Arabia and UAE are MENA’s pioneers in shifting towards renewables and green hydrogen. Fortescue’s recently announced green hydrogen facility, with an ambitious capacity of 9.2GW, could be one of the largest plants of its kind. Saudi Arabia’s investment to produce green hydrogen from the Mohammed bin Rashid Al Maktoum Solar Park and the joint investment of Emirates Steel and TAQA are among the tens of green project announcements in the MENA region
If it acts fast, MENA has the potential to lead the world in green steel production.