Regional supply chains for decarbonising steel: Energy efficiency and green premium mitigation

Decarbonised steel, enabled by green hydrogen-based iron ore reduction and renewable electricity-based steel making, will disrupt the traditional supply chain. Focusing on energetic techno-economic assessment of potential chains, this study investigates direct reduced iron-electric arc furnace production route energy deployed in regional settings. The hypothesis, that co-locating manufacturing processes with resources would offer highest efficiency cost reduction, is tested through an Australia-Japan case study. binational partnership structured to meet Japanese demand (for domestic use exports) source both from Pilbara region Western Australia. A total 12 unique chains differentiated spatial configuration, timeline carrier were simulated, which validated hypothesis: exports remote producers (i.e. Japan-based production), as opposed abundant Australia-based increased consumption levelised 45% 32%, respectively, when averaged across 2030 2050. Two decades technological development economies scale realisation be crucial; average 12% more energy-intense 23% expensive than 2050 equivalents. On vectors, liquefied hydrogen was efficient ammonia for export-dominant due pairing its process flexibility intermittent solar profile, well avoidance need cracking prior reduction. To mitigate premium, a carbon tax range A$66–192/t CO2 required A$0–70/t 2050; diminished requirement latter achievable only wholly production. Further, modelled system immense; producing 40 Mtpa decarbonised require 74–129% Australia’s current electricity output A$137–328 billion capital investment power, production, shipping vessel infrastructure. These results call strategic planning resource drive efficiencies accelerate global decarbonisation steel.