Executive Viability Abstract
This feasibility study evaluates the integration of green hydrogen-based Direct Reduced Iron (DRI) technology within the Chinese steel industry to meet 2030 decarbonization targets. The project focuses on replacing traditional blast furnaces with electric arc furnaces powered by renewable-sourced hydrogen, supported by favorable Chinese government subsidies and carbon trading mechanisms.
Return on Investment
18.5%
Payback Span
8.5 years
Net Present Value
$1.45 Billion
IRR Index
14.2%
## Executive Summary
Development of a 2.5 million tonnes per annum (mtpa) green steel facility in Hebei province using green hydrogen instead of coking coal.
## Market Analysis
China produces over 50% of the world's steel. With the expansion of the Chinese Emissions Trading Scheme (ETS) to include steel, the price of carbon is expected to rise from $10/t to over $30/t by 2030. There is an increasing premium for 'Green Steel' in automotive and construction sectors globally.
## Technical Feasibility
The project utilizes Proton Exchange Membrane (PEM) electrolyzers powered by dedicated wind and solar farms. The resulting green hydrogen replaces carbon as the reducing agent in the DRI process, reducing CO2 emissions by up to 95% compared to traditional BF-BOF routes.
## Financial Projections
Total investment involves significant upfront CAPEX for hydrogen infrastructure. However, operational costs are mitigated by declining renewable energy prices and government tax incentives for 'Dual Carbon' goal contributors.
## Risk Assessment
Primary risks include the high cost of hydrogen production and grid stability for 24/7 industrial operations.