Steel production is a cornerstone of South Africa’s industrial landscape, supporting everything from construction to automotive manufacturing. Yet, the sector faces mounting pressure to reduce its carbon footprint.
As global markets and local stakeholders demand cleaner solutions, hydrogen-based direct reduction of iron (DRI) is materialising as a promising answer.
What is Hydrogen-Based DRI?
Traditional steelmaking relies heavily on coal, particularly in blast furnaces, to convert iron ore into steel. This process is energy-intensive and produces significant carbon dioxide emissions.
In contrast, hydrogen-based DRI utilises green hydrogen, generated from renewable energy sources, to reduce iron ore. The chemical reaction produces water vapour instead of carbon dioxide, offering a substantial reduction in emissions.
The process works by introducing hydrogen into a shaft furnace, where it reacts with iron ore at around 1,000°C. The result is direct reduced iron, also known as sponge iron, which can then be melted in an electric arc furnace. When powered by renewable electricity, this route offers a near-zero emissions pathway for steel production.
Global Momentum and Local Relevance
Countries such as Sweden and Japan are already piloting and scaling hydrogen-based DRI projects. The HYBRIT initiative in Sweden, for instance, has successfully produced fossil-free steel, with several large-scale plants currently under construction across Europe and Asia.
For South Africa, the relevance is clear. The country is a major producer of iron ore and has a robust steel sector. However, it also ranks among the world’s top emitters of greenhouse gases from the steelmaking industry. As export markets—especially in Europe—move toward stricter carbon regulations, the pressure to decarbonise will only intensify.
Opportunities for South Africa
South Africa is uniquely positioned to benefit from this transition. The country’s abundant solar and wind resources can be harnessed to produce green hydrogen at scale. This would not only supply the domestic steel industry but could also create opportunities for export, supporting economic growth and job creation.
Adopting hydrogen-based DRI could also help local producers maintain access to global markets. The European Union’s Carbon Border Adjustment Mechanism (CBAM), for example, will soon impose tariffs on high-carbon steel imports. By investing in low-carbon technologies, South African steelmakers can stay competitive and meet evolving customer demands.
Challenges and the Road Ahead
Transitioning to hydrogen-based DRI is not without its hurdles. The cost of green hydrogen remains high, and the process requires high-quality iron ore. Infrastructure investments will be needed, from renewable energy generation to hydrogen production and storage. Collaboration between government, industry, and research institutions will be essential to address these challenges.
However, costs are expected to decline significantly over the next decade as technology matures and renewable energy becomes more affordable. Early pilot projects and partnerships can help build the expertise and supply chains needed for large-scale adoption.
Hydrogen-based DRI represents a significant opportunity for South Africa’s steel industry. By embracing this cleaner technology, the sector can reduce emissions, secure its place in global markets, and contribute to a more sustainable future. The journey will require investment and innovation, but the potential rewards—for the industry, the economy, and the environment—are substantial.
For more information or assistance with your next project, contact the Steelmor team.