According to a new report from the Institute for Energy Economics and Financial Analysis (IEEFA), the Middle East and North Africa (MENA) region could become a leader in the global decarbonization of steel thanks to investments in hydrogen green and renewable energy.
As the global steel industry shifts to direct production and use of reduced iron (DRI) green hydrogen To reduce emissions, the MENA region is in a prime position to start producing carbon-neutral or green steel, according to the report.
The author of the report explains that the Direct Reduction Iron Electric Arc Furnace (DRI-EAF) process, which is dominant in the region and uses syngas made from natural gas or gasified coal as well as electricity, could be zero emissions if hydrogen (produced from renewable energy powered electrolysis) and electric arc furnaces powered by renewable energy have been used.
The International Energy Agency (IEA) in its Net Zero Emissions Scenario models the global share of DRI-EAF hydrogen (H2) based production to reach 29% of primary steel production by 2050 BloombergNEF estimates that 56% (840 million tonnes) of steel production will come from H2DRI-EAF by 2050 in a net zero emissions script.
“Compared to other regions, MENA’s existing DRI-EAF capability means that no additional investment is needed to replace core technology. Any new investments could be focused on expanding green hydrogen production among other renewables. If acted quickly, MENA has the potential to become the world leader in green steel production,” says the author.
Additionally, the report notes that the MENA region has excellent solar resources to aid in the production of green hydrogen from renewable electricity.
The World Bank has found that the region has the highest potential photovoltaic energy capacity in the world and could theoretically produce more than 5.8 kWh per square meter per day. It is expected that 83 GW of wind power and 334 GW of solar power will be added by 2050, increasing the share of wind and solar from 1% and 2% respectively to 9% and 24%.
“Access to such high solar energy resources makes it possible to produce green hydrogen at a competitive price. With available capacity in the MENA region, producing green hydrogen below $1/kg is achievable by 2050,” says the author of the report.
Egypt, Saudi Arabia and the United Arab Emirates (UAE) are leading the MENA region in the transition to renewable energy and green hydrogen.
Just recently, Australian iron ore company Fortescue proposed a green hydrogen facility in Egypt, with a capacity of 9.2 GW, which could be one of the largest such plants.
Egyptian government units have also reached an agreement with Abu Dhabi’s Masdar and investment platform Hassan Allam Utilities to establish green hydrogen production plants with an electrolyzer capacity of 4 GW by 2030 and production up to 480,000 tonnes of green hydrogen per year.
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