Posted on 28 Jul 2025
Two steel producers acted separately to postpone or cancel hydrogen energy-related projects in mid-2025, with those moves joining several in the petrochemical and utility sectors as signs of skepticism concerning the future of hydrogen as an energy form.
This June, Cleveland-Cliffs CEO Lourenco Goncalves told attendees at a steel industry event in the United States had canceled its more than $1.5 billion hydrogen-power project at its mill in Middletown, Ohio
Vardah Gill of Yahoo! Finance quotes Goncalves as saying that despite the potential contribution of a $500 million grant from the U.S. Department of Energy, would have needed to invest another $1.1 billion, for a total project cost of $1.6 billion.
The hydrogen system would have replaced a coal-fueled blast furnace. However, “I will not have hydrogen at the time I need for that specific project,” Goncalves reportedly remarked at the event.
Also in June, Luxembourg-based steelmaker ArcelorMittal announced it would not move forward with previously announced plans to install hydrogen-powered direct-reduced iron (DRI) and electric arc furnace (EAF) capacity in at two locations in Germany.
“It is increasingly well documented that there has been slower than expected progress on all aspects of the energy transition, including green hydrogen not yet being a viable fuel source and natural gas-based DRI production not being competitive as an interim solution,” stated the global steel producer in its announcement.
ArcelorMittal did not rule out converting from blast furnace/basic oxygen furnace production at the two German sites to EAF technology, saying it would “focus on detailed planning” for such conversions.
In a late June posting on the CleanTechnica website, Canadian energy sector blogger Michael Barnard included the Cliffs and ArcelorMittal project on a list of nine cancellations or postponements in an article titled “Hydrogen’s brutal month: Billions lost as mega-projects collapse.”
In addition to those two steel sector projects, Barnard lists announcements delaying hydrogen plans by petrochemical companies including BP, ExxonMobil and Repsol in locations around the world, including Australia, the United Kingdom, the U.S., India, Germany and Spain.
One week before that article, Barnard posted another one titled “Why hydrogen won’t win the zero-carbon steel race,” in which he makes a case that hydrogen-powered DRI production is not cost effective compared with several potential alternatives.
By his calculations, what he calls hydrogen DRI technology would cost about $495 per metric ton of steel production in northern Europe. That compares with $245 per metric ton for a technology he refers to as electrified biomethane-based DRI coupled with carbon capture and storage (CCS).
Barnard describes that system as using natural gas-based direct reduction technology that substitutes fossil natural gas with biomethane. “When deployed in regions with plentiful waste biomass, [the] economics become remarkably favorable,” he says.
“We must confront the persistent economic reality that hydrogen-based steelmaking has failed to achieve cost parity due to wildly optimistic projections of cheap green hydrogen from five to 10 years ago,” writes Barnard. “The widespread assumption that renewable electricity would rapidly drive electrolyzer and hydrogen costs to ultra-low levels has not materialized.”
As of late July, hydrogen power remains in the plans of some steel mill projects on the drawing board or underway, including at Blastr Green Steel in Finland and Sweden-based startup H2 Green Steel (H2GS), which has attracted investors and steel purchasing customers with the premise that it will use hydrogen as a power source.
Source:Recycling Today
