At the AISTech conference in Columbus, Ohio earlier this year, direct reduction technology was a hit with the iron and steel industry. The turnout was so much larger than expected that the event’s organizers had to put the DRI exhibitors into a larger room long used for blast furnace technology, where attendance was down.

“This is a sign of the transition that our industry is facing,” says Stefano Maggiolino, President and CEO of Tenova HYL. “Decarbonization and sustainability are now at the core of the industry’s vision.”

The result is that “the DRI market is booming,” he says.

This is a big change. For many years, DRI was an alternative for markets with abundant natural gas resources and little available scrap metal, such as in the Middle East, North Africa and Venezuela.

The shift started in the 2010s as steelmakers stepped up the search for ways to cut carbon dioxide emissions, a push that has been gaining in the energy transition to net-zero emissions.

Tenova and its competitors have led this transformation by convincing steelmakers that DRI is the only available and proven solution for the decarbonization of the industry.

The market keeps changing and Maggiolino sees six trends driving the push into DRI. The first is to create DRI hubs in regions with large supplies of gas. Vulcan Green Steel, a part of India’s Jindal Steel Group, has ordered a hydrogen-ready DRI for a new plant it is building in Oman, a leading exporter of gas in the world. Tenova’s Energiron zero-reformer DR plant will produce 2.5 million metric tons per year of Hot Briquetted Iron (HBI) and will start operations with natural gas feed, gradually increasing the percentage of hydrogen in the blend as supplies become available on site. Green hydrogen can be produced with electrolyzers, which use electricity from onsite wind or solar farms to split water into hydrogen and oxygen.

Maggiolino says he expects Oman and the MENA region to become a DRI hub because of its abundant supplies of low-cost gas and huge potential for making hydrogen from renewable energy.

The second trend is being driven by market conditions. This is happening in Mexico, for example, where Ternium has opted for the technology despite the higher cost of gas in that market. DRI produces a high-quality steel from virgin metallics, which is what Ternium is targeting for sales growth. Ternium is designing a new plant in Mexico with 2.1 million tons per year of DRI that will be able to run on hydrogen as supplies become available.

The third trend is the advance of DRI among risk-averse steelmakers, such as the Japanese. They’ve been leaders in the use of blast furnaces for the past decades, so making the jump to DRI is expected to take longer. That shift, however, is starting. Tenova has reached a deal to supply a small-scale plant, the first DRI plant in that country. It will be equipped for 100% hydrogen, and it is due to start operations in 2025.

The fourth trend involves the change-embracers who are scrapping blast furnaces in favor of DRI. Salzgitter Group, for example, is building a 2.1 million-tons-per-year DRI plant with 100% hydrogen in Germany.

The fifth trend is the advance of DRI in China, source of more than 60% of the world’s steel production, at approximately 1 billion tons per year. Of that, 90% is made with blast furnaces. Tenova has supplied two DRI models to China, a sign of the efforts to reduce that country’s large carbon footprint. Baosteel Zhanjiang Iron & Steel Co., for example, started up a plant with 1 million tons per year of capacity, the largest hydrogen-based DRI facility in China.

This is a chance to demonstrate to the plant’s owner, Baowu Group, the world’s biggest steel producer, that it can use a variety of energy sources, from coke oven gas to natural gas and hydrogen. “We really confirmed the total flexibility that our technology can provide to the user,” Maggiolino said.

This is important. While hydrogen is a future fuel, it is still uncertain when the supplies will be available to reach 100% use. But when it comes to making a long-term decision to invest billions of dollars in an installation, “you already have to think that these installations should be flexible enough to go along with the energy transition in time. And so that's the thing I would highlight of the Chinese projects, it is the energy transition.”

The sixth trend is being led by the eco-champions like LKAB in Sweden, which plant has a design to run only on 100% hydrogen. This makes sense. Sweden has a surplus of green energy to produce hydrogen at a low cost. “If projects are being designed today to use huge amounts of hydrogen, it shows that hydrogen is closer than we think,” he says. “We have to be ready.”

With these trends, Maggiolino says he expects the shift to DRI to gain speed in a competitive environment where DRI not only cuts carbon emissions compared with blast furnaces, but Tenova HYL is the only technology that can capture CO2 at the industrial level, which not only further reduces emissions but provides a new revenue stream for the industry, such as by selling it to soft drink makers.

“More and more people are knocking at our door” Maggiolino says. “And when you have captured CO2 with 99% purity, that’s money, it’s not a headache.”