Amid the string of announcements over the past eight months asserting Abu Dhabi’s arrival on the international hydrogen stage, two in a day in early August stood out as affirming intent both to decarbonise domestic industries and exploit other countries’ desire to do so.

First, state-owned duo Abu Dhabi National Energy Company (Taqa) and Emirates Steel agreed to collaborate on the Middle East’s first use of hydrogen in steelmaking—a notoriously hard-to-decarbonise process. Meanwhile, state-owned Adnoc advanced plans to become a core provider of the vast volumes of hydrogen required to fulfil Japan’s emissions-reduction ambitions by exporting a first cargo of blue ammonia to Japanese firm Itochu.

Finding a way to green steel production is increasingly recognised as key for global industrial decarbonisation: the sector accounts for around 7-9pc of the world’s direct emissions from fossil fuels, which are used to heat furnaces and also as a reagent in the manufacturing process.

Head start

This makes decarbonising the sector especially challenging and costly. However, Abu Dhabi and the wider Middle East have an advantage in their dependence primarily on the direct reduced iron (DRI) production method rather than the blast furnace technology predominant in Europe and elsewhere—a consequence of the region’s ample gas reserves.

“We aim to create a wide range of ammonia value chains for existing industrial applications as well as future energy use” Tanaka, Itochu

It is easier and cheaper to substitute hydrogen into the DRI process than into the blast furnace process. Emirates Steel’s 3.5mn t/yr integrated iron and steel plant encompasses 2mn t/yr of DRI capacity. Meanwhile, Taqa agreed last month to co-develop a 2GW green hydrogen complex at the local Kizad industrial area.

Their joint announcement on 3 August was short on detail—the description “green steel” is used to denote varying reductions in carbon intensity, and precisely where in the production process the green hydrogen would be deployed was unstated—with project design said to be already underway.

At present, low-carbon steel is considerably more costly to manufacture, whether using carbon capture and storage (CCS) or green hydrogen. But falling prices for the latter—as renewable power becomes cheaper, electrolysers are scaled up and global demand increases thanks to carbon pricing—will make the cleaner option increasingly cost-competitive. Abu Dhabi’s government is also aware of its diminishing gas reserves.

Greener steel than most

The Emirates Steel plant is already greener than most. It became the first in the world to deploy CSS at scale in 2016, with 800,000t/yr of CO₂ emitted during the production process sequestered underground at the Ruwais downstream hub.

In May, Adnoc announced plans for a near sixfold expansion of CCS capacity, to 5mn t/yr, as part of a joint venture (JV) project with government holding company ADQ to produce 1mn t/yr of blue ammonia using hydrogen derived from its nearby refining and petrochemicals operations. Fertiglobe—a recently created JV between Adnoc and Netherlands-based fertiliser company OCI— joined the scheme the following month.

Meanwhile, Adnoc has signed a series of agreements with various firms to cooperate on fuel ammonia production and the development of an international hydrogen supply chain, signalling intent to expand into the hydrogen sector.

Adnoc and Itochu recently announced that a first blue ammonia shipment of unspecified size had been sold to the Japanese company ‘at an attractive premium’ to its grey cousin for use in fertiliser applications. The chemical was manufactured at Fertiglobe’s Fertil plant at Ruwais, whose 1.2mn t/yr of ammonia production will be incrementally transformed from grey to blue through retrofitting CCS.

7-9pc – Emissions produced by global steel sector

Tokyo’s hopes of decarbonising power generation and its 130mn t/yr of potential steel production rest heavily on hydrogen imports—a position its existing Mid-East Gulf oil suppliers, primarily the UAE and Saudi Arabia, are well-placed to exploit.

“Starting with this trial…we aim to create a wide range of ammonia value chains for existing industrial applications as well as future energy use,” says Itochu executive officer Masaya Tanaka.

Adnoc’s counterpart and rival Saudi Aramco shipped a pilot blue ammonia cargo to Japan last year.

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Author: Clare Dunkley