Masdar and Emirates Steel Arkan team up to develop green hydrogen project in Abu Dhabi

The pilot project, which will be commissioned next year, will help in decarbonising the hard-to-abate steel sector

Emirates Steel has pledged to reduce its carbon emissions by 40 per cent by 2030 and achieve net-zero emissions by 2050. Photo: Emirates Steel Arkan

Abu Dhabi’s clean energy company Masdar is teaming up with Emirates Steel Arkan to develop a green hydrogen project to decarbonise the hard-to-abate steel sector in the UAE.

The pilot project, which is being hailed as the first of its kind in the Mena region, will be located at Emirates Steel’s production units in the Industrial City of Abu Dhabi and will help the company produce green steel, which is in high demand globally.

The project, expected to be commissioned early next year, will demonstrate the use of green hydrogen, instead of natural gas, to extract iron from iron ore, a key step in steel making, the two companies said on Wednesday.

“Steel is an essential commodity driving economic growth and creating jobs and this project presents huge potential for reducing emissions while increasing trade,” Mohamed Al Ramahi, chief executive of Masdar, said.

Active in more than 40 countries and with a total electricity generation capacity of over 20 gigawatts, Masdar is targeting 100 gigawatts by 2030.

The announcement of the latest project comes as the global green steel market is projected to record an “exponential growth”, expanding about 130 per cent annually between 2023 and 2030, according to a new report from Fairfield Market Research. The market size for green steel is expected to reach $47.2 billion by the end of this decade.

Steel manufacturing contributes between 7 and 8 per cent of worldwide carbon emissions and companies are ramping up efforts to decarbonise their operations.

“We are spearheading the industry's shift towards a more sustainable future, in harmony with the UAE's strategic commitment to achieving net zero by 2050,” Saeed Al Remeithi, group chief executive of Emirates Steel Arkan, said.

In 2022, the Abu Dhabi-listed company achieved a double-digit reduction in energy intensity and in emissions and emissions intensity by using 80 per cent clean electricity, carbon capture and scrap metal utilisation, according to its statement.

The company has pledged to reduce its carbon emissions by 40 per cent by 2030 and achieve net-zero emissions by 2050.

Earlier this year, Emirates Steel Arkan in partnership with AD Ports Group, the operator of industrial cities and free zones in Abu Dhabi, also signed a non-binding initial agreement with Japanese companies to establish a low-carbon iron supply complex in Abu Dhabi.

“A lot of companies are approaching us and leveraging our decarbonisation levels” and the company is in a leading position “in terms of carbon dioxide emissions compared with others”, Mr Al Remeithi told The National in an interview this year.