Green steel · 2026
Green Steel Revolution: How H2-DRI Replaces Coal
Hydrogen instead of coking coal. Water vapour instead of CO 2 . Here is what it costs in 2026.The problem
Blast furnaces run on coal
2.32 t CO 2 per tonne of crude steel from the blast furnace. Source: worldsteel Sustainability Indicators.How H2-DRI works
Hydrogen strips oxygen from iron ore
In a shaft furnace, hydrogen reacts with iron ore to make direct reduced iron . The by-product is water, not CO 2 .The fuel
Green only if the hydrogen is green
The near-zero route uses 100% renewable hydrogen made by electrolysis. Source: ICCT, Aug 2026.US cost benchmark
What a tonne of green steel costs
$812/t US H2-DRI-EAF production cost: 34% more than a relined blast furnace (about $606/t implied), 24% more than a new one.Where the $812 goes
Energy and ore dominate
Energy (mostly electrolysis) 39% · ~$317. Iron ore & raw materials 38% · ~$309. Capital & other costs 23% · ~$187.The tipping point
Hydrogen at $1/kg flips the math
At $1.0/kg hydrogen, H2-DRI-EAF steel costs $491/t vs $539/t for blast-furnace steel, with no carbon price at all.EU CBAM
Coal steel now pays at the EU border
€82.32 CBAM certificate price per tonne of CO 2 , Q3 2026.Closing the gap
Cheaper power, better ore
ICCT finds the premium narrows with cheaper regional industrial electricity or imported Brazilian iron ore .US policy
Tax credits could erase most of the premium
34% → 5% Ten years of 45V clean-hydrogen credits plus the proposed Steel Modernization Act support would shrink the premium to about 5%.Your next step