Hydrogen-Based Steelmaking Moves From Pilot to Industrial Scale
Two of the steel industry's most closely watched hydrogen-based direct-reduction projects have both posted concrete production results within the past two years, suggesting the technology is moving from laboratory demonstration toward industrial deployment — though still on a small scale relative to the roughly 76-million-tonne-a-year global DRI industry it aims to eventually decarbonize.
The data points
- In Sweden, the HYBRIT project — a joint venture of steelmaker SSAB, miner LKAB and utility Vattenfall — completed its pilot phase on August 27, 2024, after producing more than 5,000 tonnes of hydrogen-reduced sponge iron at a facility in Luleå, testing 175 different process configurations, according to LKAB's project summary. The resulting sponge iron reached 98-99% metallization with near-zero Scope 1 and 2 CO2 emissions (about 0.05 tonnes of CO2-equivalent per tonne of steel) and, per LKAB, better resistance to mechanical stress than comparable industrial references. The project is now moving to industrial-scale implementation, with a hydrogen-storage pilot continuing through 2026.
- In Japan, JFE Steel produced approximately one tonne of reduced iron using green hydrogen over a three-day run from June 29 to July 1, 2025, at a 15-kilogram-per-hour pilot unit at its East Japan Works in Chiba, using green hydrogen supplied by Yamanashi Hydrogen Company and Tomoe Shokai, according to Global Hydrogen Review. JFE has set a target of carbon neutrality for itself by around 2035, ahead of the wider Japanese steel sector's 2050 target; the steel industry accounts for roughly 14% of Japan's total CO2 emissions.
Context: how big is the DRI industry these projects are trying to change
For scale, global MIDREX-technology DRI production — the dominant commercial direct-reduction process, which today runs overwhelmingly on natural gas rather than hydrogen — totaled 76.284 million tonnes in 2024, up a modest 0.37% from 76.002 million tonnes in 2023, according to Midrex Technologies' own 2024 operations summary, with cumulative MIDREX production surpassing 1.475 billion tonnes since the process was commercialized. Against that backdrop, HYBRIT's 5,000-tonne pilot run and JFE's one-tonne test batch are still tiny, proof-of-concept volumes — but both mark a step beyond laboratory research toward facilities that could plausibly scale toward commercial production.
Why it matters for the wider industry
Steelmaking is one of the hardest industrial sectors to decarbonize because conventional blast-furnace routes rely on coke (carbon) as both fuel and chemical reducing agent, while even gas-based DRI — the technology already widely used in the Middle East, including Iran — still relies on natural gas as the reducing agent and emits substantially more CO2 than a hydrogen-based process would. Replacing the reducing agent with green hydrogen, produced from renewable electricity, is one of the few technically demonstrated pathways to near-zero-emission primary steel production, which is why both projects are being closely watched across the steel and mining industries as reference points for what an eventual technology transition could look like.
Relevance for Iran's steel sector
Iran is among the world's largest users of gas-based direct-reduction technology (chiefly MIDREX-type processes) for primary steelmaking, a technology base that shares core process engineering with hydrogen-DRI — the main difference is the reducing gas used, not the overall plant concept. That overlap means Iranian steelmakers already operate the type of plant architecture that a hydrogen transition would build on, making early pilot results from HYBRIT and JFE directly relevant technical reference points for the domestic industry, even though neither project currently involves Iranian participation and any large-scale hydrogen-DRI transition for Iran would depend on the future cost and availability of green hydrogen and renewable power domestically.
Limits of the data and what to watch
Both projects remain pilot- or early-industrial-scale, not commercial production: HYBRIT has not yet stated a commercial-scale start date beyond "moving to industrial-scale implementation," and JFE's test was a short, three-day run rather than continuous operation. Neither company has published a cost comparison against conventional gas-based or coal-based DRI/blast-furnace routes in the sources reviewed here. The key indicators to watch going forward are whether either project announces a commercial-scale investment decision, and how the cost of green hydrogen evolves relative to natural gas.
