Hydrogen use in industry
Hydrogen demand has grown threefold since the beginning of its use in the 1970s [i]. Out of the 73.9 Mt of hydrogen produced in 2018, 38.2 Mt was used in refining (including polymers and resin production), 31.5 Mt in ammonia (fertiliser) production and 4.2 Mt in other applications.
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The demand for hydrogen continues to increase, but the supply of hydrogen is still almost entirely fossil based, relying on natural gas and coal. However, as low-carbon hydrogen becomes available, it will become a decarbonisation tool for various sectors – including energy intensive industries.
Hydrogen in the near term:
valuable and scarce
While there are many applications in energy intensive industries, providing the quantities of low-carbon hydrogen necessary to meet those needs will be challenging.
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Due to resource limitations, low-carbon hydrogen production will be of limited scale when compared to the overall climate change mitigation challenge[ii]. Consequently, early hydrogen volumes need to be directed into maximum decarbonisation value and into sectors and processes where no direct use of electricity is applicable. For instance, the use of low-carbon hydrogen in industrial processes should be prioritised over its use as a fuel in passenger car transport or residential heating [iii].
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Focusing on limited, specific applications where hydrogen could reach the highest reductions in CO2 per kilogram of H2 used will be crucial to make the most out of this valuable resource. ‘Hydrogen-ready’ facilities should be avoided, as the phrase remains a potential not a commitment to action and removes responsibility from individual plants to decarbonise.
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In energy intensive industries, there are a few potential applications of low-carbon hydrogen. The following sections tackle these various applications for steel, cement and chemicals.
Hydrogen replacing fossil fuels in industry
High temperature heat
All heavy industry sectors consume a significant portion of energy, both as a fuel and as a feedstock. Processes such as melting, sintering, drying materials and heating large furnaces all require significant amounts of energy, which is usually provided in the form of heat. This heat is currently generated by using fossil fuels such as coal, oil and natural gas [1], which contribute to more than a half of the overall emissions from energy intensive industries [iv].
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Historical development in the use of different products within the industrial sector.
Source: Adapted from Sintef (2019); data from IEA (2016)
Some of these emissions can be reduced by redesigning the high-temperature processes to integrate more renewable electricity directly or facilitate the use of low-carbon fuels such as hydrogen [v]. While for some processes the direct use of electricity might be more efficient [2], [vi], for others there is still a need for a fuel to heat furnaces and feed into fuel boilers in the short term.
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In some cases [vii], hydrogen can produce medium and high-grade heat and hence provide a low-carbon alternative to fossil fuels such as natural gas or coal. According to some assessments, a fuel switch from burning oil, natural gas, or coal to low-carbon hydrogen in steel, cement and chemical sectors could lead to an annual CO2 reduction of up to 85 Mt CO2 in Europe [xxviii].
[1] Other energy sources used in industry include electricity, biomass and waste.
[2] Efficiency comparisons with direct electricity use need to be made on a case-by-case basis to determine whether there is a more efficient solution (Agora Energiewende 2021).
Hydrogen use in steel production
In the steel sector, there are two major pathways for hydrogen use as a reactant:
1. Hydrogen can be injected into existing blast furnace to both create heat and strip the oxygen from the raw iron ore. However, as with all blending, a fossil and therefore carbon intensive feedstock will remain. This use of hydrogen therefore delivers only up to 20% of emission reductions compared to regular steel making [viii].
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2. Hydrogen can also be used as the main reduction agent in the process of making sponge iron through direct iron reduction (DRI) [3] in a shaft furnace [ix],[x]. The resulting sponge iron is then used in the production of steel in an electric arc furnace. The DRI with hydrogen can deliver significant emission reductions of approximately 90-95%[x], provided that the hydrogen used is entirely carbon neutral [xi]. Even though the first part of this process is carbon-free, there is still a need to add some carbon content during the second phase of the steel making process (i.e. in the electric arc furnace).
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Assuming that renewable hydrogen is used, significant quantities of renewable electricity are needed to 1) produce hydrogen needed for the direct reduction of iron ore and 2) power the electric arc furnace and other components in this steelmaking process.
[3] Direct reduced iron in a shaft furnace or a fluidised bed reactor.
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Example: Direct reduction of iron ore for steelmaking
Source: Adapted from SSAB, LKAB, Vattenfall (2017) HYBRIT Fossil-free steel, Summary of findings from HYBRIT pre-feasibility study 2016-2017.
Scale for industrial use in steelmaking
Producing one kilogram of hydrogen requires about 48-55 kWh of electricity. With 50 kg of hydrogen required to produce 1 ton of steel, approximately 2400-2750 kWh is needed to produce the hydrogen needed for one ton of steel. Once the additional electricity for the electric arc furnace and heating is added, the overall electricity needed per ton of steel adds up to approximately 3200-3500 kWh. [xii],[xiii],[xiv],[xv] This figure can go up to 5900 kWh and mostly depend on the efficiency of the electrolyser used to produce the hydrogen used in the process [xvi],[4].
Examples of existing projects within Europe are useful indicators of the scale of these electricity requirements:
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Voestalpine, an Austrian steelmaker, will need 30TWh per year to produce all of their steel through hydrogen DRI + EAF [xvii] (approximately 50% of Austria’s electricity generation [xviii])
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Replacing all of Germany’s steel production will require around 147 TWh (approximately 28% of Germany’s electricity generation) [5]
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To replace all BF-BOF steelmaking in Europe, an additional 493-517 TWh of renewable electricity would need to be deployed [xvi] (roughly 18% of EU28 total electricity generation and 93% of EU28 renewable electricity generation).
Consequently, steelmaking with hydrogen needs to be developed in parallel with the deployment of additional renewable electricity generation in Europe.
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[4] A full breakdown of the electricity requirements for DRI +EAF steel production can be found in Bhaskar et al. (2020).
[5] Assuming 3500KWh are needed for the production of 1 ton of steel via the DRI + EAF route.
Example: Production of ammonia
Source: Adapted from Smith et al. 2020. Current and future role of Haber–Bosch ammonia in a carbon-free energy landscape.
If low-carbon hydrogen is used for the production of products which contain a carbon component (i.e. methanol, other refined fossil fuels or materials such as plastics, the source of the carbon should be taken into account [7]. For instance, the petrochemical sector, essentially an extension of the fossil fuel oil and gas sectors [xxiii], will have to switch to entirely bio-based products, low-carbon feedstocks and renewable energy use to be carbon neutral [xxiv]. Switching to low-carbon hydrogen would address only a part of their emissions.
[7] The chemicals containing carbon components will be analysed further in the Carbon Capture and Utilisation section of this project.
Hydrogen use in chemicals
In the chemical industry, hydrogen can be used as an ingredient for various chemical products [xix]. 84% of the hydrogen currently used in the chemical sector is used for ammonia production,12% for methanol production, 2% polyurethane, and 2% nylon [xx].
European ammonia production uses 3.6Mt of H2 annually. As illustrated in the figure below, the hydrogen is mixed with nitrogen (in a 3:1 ratio) under certain pressure, temperature conditions and with an additional catalyst to produce ammonia.
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By decarbonising ammonia production with low-carbon hydrogen [xxi], emissions in the chemical sector could reduce by approximately 30Mt of CO2 [6]. Replacing this fossil hydrogen with low-carbon hydrogen from electrolysis would require around 173 TWh of additional renewable electricity.
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Despite its clean production, the subsequent use of ammonia can result in additional N2O emissions and other environmental impacts, such as disturbances in the nitrogen cycle [xxii]. In order to paint a full picture of the impact of the product, these consequences must be taken into account as well.
[6] Assuming 8.62 tons of CO2 emissions per ton of hydrogen produced with natural gas (EPA 2001; NREL 2001).
Hydrogen use in refining
Hydrogen is also used to improve the quality of oil and gas products (e.g. via desulphurisation). While the substitution of the fossil hydrogen used for the production of these products would lead to a substantial decrease in emissions, it would not be compatible with climate neutrality in 2050 in the long term.
The use of low-carbon hydrogen in oil refining is not compatible with climate goals due to the overall emissions associated with fossil fuel use.
Hydrogen use in cement production
Unlike the steel and chemical sector, hydrogen has a limited use in producing cement. While it can substitute some of the fossil fuels used in the sector, it cannot be used as an ingredient or reactant in conventional cement production.
Over the past few years, experts have been developing the use of hydrogen as a fuel providing high-grade heat cement kilns[xxv]. By replacing some of the coal or natural gas, the use of low-carbon hydrogen as a fuel could reduce some emissions coming from the cement industry. However, the flame coming from hydrogen combustion has different properties to the heat coming from the fuels currently used [xxvi]. As a fuel with different heat dispersion and properties, it might not be sufficient to heat the cement kiln or be suitable for the burner used in clinker production. To address these limitations, researchers are currently focusing on pairing hydrogen with other low-carbon fuels such as biomass[xxvii]. While these efforts might result in successful projects further down the line and result in significant emission reductions[xxviii], further research and testing is needed[8][xxix].
Once developed and optimised for kiln heating, hydrogen burners can be paired with other cement making technologies which can be combined with carbon capture and storage. For instance, cement production with a technology separating process gases from the combustion gases (i.e. the LEILAC project[xxx]) would enable low-cost carbon capture and storage on one hand, and the use of an alternative fuel such as hydrogen on the other. Such a combination of decarbonisation technologies, once feasible, would tackle all emissions from cement production and achieve deep reductions in the sector[xxxi].
[8] According to Cembureau (2019), physical aspects of the kiln system, fuel mass flows, temperature profiles, heat transfer and the safety considerations for the plant still need to be analysed.
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Integrating low-carbon hydrogen use into large industrial clusters
The industries with the largest potential for low-carbon hydrogen use have existing infrastructure which can be reused or repurposed for the use of hydrogen. As one of the main consumers of hydrogen, ammonia producers have ample experience and all the necessary infrastructure to convert to low-carbon hydrogen momentarily.
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In other industrial sites, implementation will not be immediate since the existing infrastructure will not be suitable for direct hydrogen use[xxxii]. However, large industrial clusters often have access to large pieces of infrastructure (e.g. natural gas pipelines) which can be retrofitted to enable the transportation of hydrogen (e.g. layering pipes with plastic to avoid hydrogen leakage and corrosion).
In the near term, hydrogen production with carbon capture and storage is particularly relevant for areas which cannot produce low-carbon electrolytic hydrogen due to the high carbon intensity of the grid. According to an assessment from the Wuppertal Institute (2020) [xxxiii], regions with the most electricity demand including industrial decarbonisation do not have the corresponding renewable electricity generation potential. The projections for the balance of renewable generation potential and demand with electricity for hydrogen in Europe 2050 are negative for the heavily industrialised regions in the North of Europe:
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Source: Graph from Wuppertal Institute (2020), with data from Material Economics (2019) and ENTSO-E (2014).
The regions with a large deficit in renewable energy potential, such as North-West of Germany, Belgium and the Netherlands, house large industrial clusters, where there is potential for direct applications of hydrogen in the steel and chemical industry. Some of the large manufacturers such as Thyssenkrupp have already committed to using hydrogen for DRI when it becomes available, but have said that their plants will be operated using unabated natural gas until then [9]. Producing blue hydrogen in the next decades can provide a supply of low-carbon hydrogen to such industries and prevent the unabated use of natural gas in the meantime.
[9] S&P Global. 2020. Germany's Thyssenkrupp to build DRI plant run on hydrogen for green steel production.
How do we use hydrogen to achieve the most emission reductions in industry?
Start off with hydrogen with a very low-carbon footprint (for more information see previous section of the project on hydrogen production). Without a low-carbon production process, there are no reductions further down the product supply chain either.
Focus the application on a specific industry where reductions over 70-80% are possible (i.e. substitution of grey H2 in fertiliser production, DRI of iron ore). Investing in projects which will reach a ceiling at 30% emission reductions is too little too late.
Avoid blending hydrogen with fossil fuels or fossil carbon/CO2, both in the energy sector and the production of chemicals and fuels.
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Following these simple principles while will ensure that hydrogen investments have a future in the carbon neutral economy – hydrocarbons, particularly fuels such as diesel and petrol, will not.
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References
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