Levelised cost of steel production via hydrogen-based direct reduced iron in the Stated Policies Scenario, 2035

Notes

H2 DRI = hydrogen-based direct reduced iron; VRE = variable renewable electricity. The levelised cost of production is the price that would have to be charged per unit of production to achieve a net present value of zero for a given investment. Grid uses the Industrial end-user range of grid electricity for industry in 2024. VRE uses the price range of electricity produced from variable renewables plus the cost of hydrogen storage required to guarantee a minimum load of 80%. The range for imported iron assumes the iron is produced in a region with lower energy price (Brazil for the European Union and Australia for Japan) and imported to produce steel locally. The conventional range gives the cost of unabated conventional primary production of steel with unabated fossil fuels (blast furnace-basic oxygen furnace and DRI-electric arc furnace), with or without carbon pricing at a value of USD 150/tonne of CO2.