Middle East and North Africa poised to lead in green steel production

The Middle East and North Africa (MENA) region is well-positioned to become a global leader in low-emission steel production, according to the Institute for Energy Economics and Financial Analysis (IEEFA). As demand for decarbonized steel increases, MENA producers are uniquely situated to transition their gas-based Direct Reduced Iron (DRI) plants into hybrid systems that blend natural gas and hydrogen, significantly lowering their carbon footprint.

Renewables and green hydrogen as key drivers

MENA’s abundant renewable energy resources, particularly solar and wind, will be crucial in reducing indirect (Scope 2) emissions from electricity consumption. The gradual shift from natural gas to green hydrogen will also be essential in cutting direct (Scope 1) emissions. With the right infrastructure, the region’s steelmakers could become major consumers of green hydrogen, positioning themselves at the forefront of the global green steel supply chain.

Transition to hybrid DRI systems

Existing plants in MENA are equipped to incorporate new hybrid technologies like Midrex Flex and Energiron Zero Reformer, which allow for hydrogen blending without extensive modifications. This hybrid approach not only facilitates a smoother transition to green steel but also keeps costs manageable. As Soroush Basirat, Energy Finance Analyst at IEEFA, states, “This partial substitution not only allows for smaller facility sizes but also results in reduced capital costs, making the transition process more feasible.”

Key projects driving MENA’s green steel transformation

Several ongoing projects highlight the region’s momentum:

• Mauritania’s AMAN project: This massive 30 GW renewable energy initiative, spanning an 8,500 km² site, aims to produce 500,000 tonnes per year of green hydrogen. Mauritania could become a major exporter of Hot Briquetted Iron (HBI), leveraging its solar and wind resources to fuel low-emission steel production.

 
• In July 2024, Turkish steelmaker Tosyalı and the Libya United Steel Company (SULB) signed an agreement to construct the world’s largest DRI complex in Benghazi, Libya, with a production capacity of 8.1 million tonnes per annum. The facility will meet the growing demand for HBI in the region and Europe, supporting green steel initiatives.

 
• Saudi Arabia’s National Industrial Development Center (NIDC) is also partnering with Tosyali to develop a 4 million tonnes per annum (mtpa) flat steel plant in the Ras Al Khair industrial zone. Initially using natural gas, the plant will gradually transition to 100% hydrogen.

Outlook for global DRI production

World Steel Dynamics (WSD) projects that global DRI production will increase from 125 mt in 2022 to 175 mt by 2030, with the largest growth expected in the EU (20 mt) and MENA (18 mt).

For more detailed insights, refer to the full IEEFA briefing note, "MENA in pole position for green steel race," published September 19, 2024.


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