Challenges and prospects of steel production using green hydrogen in Nepal

Abstract

Steel is one of the most significant commodities for global development thus the production of steel cannot be condensed, however, steel making process can be transformed with a low-carbon fuel. The steel industry is a highly energy-intensive sector that alone is responsible for utilizing 8 % of global energy demand and accounts for 9% of global greenhouse gas emissions. The Intergovernmental Panel on Climate Change (IPCC), United Nations Sustainable development goals-2030 (SDG), United Nations Framework Convention on Climate Change, and the Paris agreement have directed to take necessary measures to confine global temperature rise to below 2°C till 2050. Green hydrogen is the most prominent energy carrier and with the help of renewable hydroelectricity to produce it, Nepal has the potential to be the cheapest producer and exporter of green hydrogen. Billet worth 865 USD was imported in 2020 to fulfil the annual steel demand of 1.2-1.4 million tons. Nepal has explored iron reserves (hematite) with a total Fe recovery potential of 70% which is sufficient to fulfil the steel demand of 50-100 years at Dhaubadi, Nawalparasi, and has prevailing iron reserves in other parts of Nepal. The history of steel production in Nepal has been studied and the reasons for the discontinuation have been analyzed. Secondary data from the literature and archival data have been used as methods to conduct the research. The status of energy demand and supply in Nepal and the energy management issues in Nepal during the wet season have been identified as opportunities to establish green hydrogen production in Nepal. The urgency to establish the steel industry and the need for compliance with climate change agreements are the motivation for the adoption of a green steel production process for Nepal. This paper reviews the current status and opportunities of the steel industry in Nepal using green hydrogen and proposes the future prospects and challenges that come along.