Towards low-carbon steel: System dynamics simulation of policies impact on green hydrogen steelmaking in China and the European Union

Abstract

Green hydrogen (GH) has been included in the steel emission reduction plans of many countries. This study evaluates the status quo of GH and steel industry and the related subsidy and regulatory policies in two major steelmaking countries/regions: China and the European Union. A system dynamics model coupling GH and steel industry is established to conduct simulation analysis of the low-carbon transition path of GH replacing fossil fuels in these two countries/regions' steel industry under several carbon emission reduction scenarios. Results verify the feasibility of using GH in the steelmaking and GH's contribution to the steel industry's carbon emission reduction. And this study assesses the policy impacts on the development of green hydrogen steel and gives specific policy implications on the timing and measures. The methodology and policy tools in this study also provide the reference for other countries who are still in wait-and-see attitude towards the development of GH steel.