Importing green iron saves 75% of transport capacity needs compared to separate hydrogen and iron ore shipments

Importing green iron saves 75% of transport capacity needs compared to separate hydrogen and iron ore shipments

London, 25 February 2025: Shipping green sponge iron from countries rich in renewable energy will be one solution to the elephant in the room at key steel summits this week, with SteelWatch showing that importing just the green iron briquettes will result in almost 75% less material being shipped than importing hydrogen and iron ore separately.

To supply the inputs for a 2.5 mtpa direct reduced iron (DRI) plant when they are not available locally, 3.5 million cubic metres of hydrogen and iron ore need to be imported. In contrast, shipping 2.5 million tonnes of green sponge iron from a DRI plant overseas with locally available hydrogen and iron ore to an electric arc furnace (EAF) involves moving 0.75 – 1 million cubic metres of materials. It therefore takes roughly four times more transport capacity to ship both the hydrogen and the ore separately, than it does just shipping DRI in hot briquetted iron (HBI) form.(1)

At this week’s World Hydrogen UK Intelligence Day in London and the Global Steel Sustainability Europe Summit in Frankfurt, much will be heard from companies about the lack of green hydrogen availability for steel decarbonisation. SteelWatch will challenge companies and governments to think more holistically about their green steel plans, and work closer with international partners to solve challenges. 

Caroline Ashley, Executive Director of SteelWatch and panelist at this week’s events, said :

The costs of building DRI plants and securing electrolysers will be pricey in any country, but as the unavoidable transformation from dirty coal-based production to fossil-free steel accelerates, steelmakers have to be smart about where to find savings.

“Importing green iron from our trading partners and allies to supplement the feed to UK and EU electric arc furnaces is the most obvious opportunity that is simply not getting publicly discussed,”

Savings also go beyond just shipping capacity, as countries with abundant renewable energy resources, such as Australia, Canada, South Africa, Spain and Brazil,(2) will need fewer solar panels, less land, and/or fewer wind turbines, while also producing cheaper electricity in larger amounts to convert into clean hydrogen. RMI estimates cost savings of around 20% per tonne of steel, compared to producing DRI in the UK for example.(3)

Key decisions are being made right now, with the UK Government launching a consultation on its steel strategy, and the EU’s Clean Industrial Deal tomorrow will be followed by a Strategic Metals Action Plan.

“Companies and policy-makers alike need to work out how much green iron can be produced ‘at home’ and start building partnerships to import the rest. To ensure this critical industry supports European economies with quality steel and decent jobs, we need to get out of a country-by-country mindset and embrace a unified, end-to-end approach. In the economy of the future, driven by renewable energy, producing iron where it is most efficient will help  protect steel and climate alike.”

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Importing green iron saves 75% of transport capacity needs compared to separate hydrogen and iron ore shipments, source

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