Posted on 18 Jun 2025
A new study from the Stockholm School of Economics finds that the competitiveness of green steel production in Romania partly hinges on hydrogen sourcing, Kallanish notes.
The research, published in the Journal of Industrial Ecology, evaluates the financial viability of Liberty Steel Galați’s transition to low-carbon steelmaking using green hydrogen and electric arc furnace-based technologies. The plant, one of the EU’s top 10 most polluting steel facilities, aims to become carbon-neutral by 2030.
“Our findings show that Romanian green steel production can be competitive, if hydrogen is produced on-site and electricity prices remain stable,” says Mara Balasha, lead author and PhD Fellow at the Stockholm School of Economics. “But if hydrogen is purchased externally, a 15% price premium in the market would be needed to avoid steep value losses.”
Without this premium, decarbonising the country’s only primary steel producer could result in billions of losses, the study claims.
Using a novel dataset collected by the Energy Policy Group, a Bucharest-based non-profit independent think tank, the study finds that the premium required to produce green steel in Romania could swing by as much as €100/tonne ($115/t) depending on how hydrogen is sourced. “If hydrogen is purchased externally, a €90/t premium would be needed for Liberty Steel Galați to avoid losing an estimated €3.3 billion in net value over a period of 20 years,” it adds.
However, if produced on-site with relatively stable electricity prices, green steel could instead come with a €10/t discount, potentially making it cheaper than steel produced with today’s conventional blast furnace-based technology, the research argues.
“Full on-site hydrogen production would likely triple annual electricity demand to an estimated 10.9 TWh [terawatt-hours] from about 3.4 TWh today and that is equivalent to about 30% of the total electricity consumption by non-households in Romania in 2022,” says Energy Policy Group. “Such a jump in electricity demand could lead to spikes in electricity prices, making production costs higher. Also, the electricity would need to be sourced from fossil-free energy sources to qualify as climate neutral, but currently about 30% of Romania’s electricity is generated from fossil fuels such as natural gas and coal.”
The researchers note several limitations primarily stemming from forecasting uncertainties regarding future electricity prices, hydrogen infrastructure readiness, and policy interventions such as carbon contracts for difference (CCfDs).
Source:Kallanish
