A Comprehensive Study of the Hydrogen Energy-Based Green Steel Industry in Bangladesh: Prospects and Challenges

This study explores the energy consumption patterns and the potential for adopting green steel (GS) technologies in Bangladesh's steel manufacturing industry, with a focus on the techno-economic feasibility of utilizing green hydrogen (H2) energy. Globally, the steel industry, dominated by countries like China, accounts for over 7 % of carbon emissions, highlighting the critical need for sustainable production practices. Bangladesh's steel industry, valued at approximately USD 6.2 billion in 2022, is expected to witness a sharp increase in per capita steel consumption from 45 kg to over 100 kg by 2030. Currently, electricity constitutes 68 % of the total energy cost in the sector, and annual energy savings of up to 156,000 tonnes of oil equivalent (TOE) could be realized through the adoption of more energy-efficient technologies, such as arc furnaces. This study's techno-economic analysis compares three hydrogen production methods: natural gas reforming, coal gasification, and water electrolysis. Electrolysis emerges as the most financially attractive option due to its lower total lifecycle cost (TLCC), generation of a net present value (NPV) of USD 3259.52 million, internal rate of return (IRR) of 14 %, and the shortest internal payback period (IPBP) of 5.19 years. While electrolysis has a slightly higher levelized cost of energy (LCOE) at USD 0.0879/kWh compared to natural gas reforming (USD 0.0741/kWh) and coal gasification (USD 0.0793/kWh), its environmental benefits and alignment with Bangladesh's renewable energy potential make it a more sustainable long-term solution. However, several limitations and challenges exist in implementing green hydrogen technology in Bangladesh. These include high capital investment, lack of supportive infrastructure, limited renewable electricity generation, and absence of clear policy frameworks. Addressing these barriers will require coordinated efforts across stakeholders, including targeted subsidies, capacity building, and regulatory support. The findings advocate strategic investments and policy initiatives to drive the adoption of hydrogen-based technologies, ensuring sustainable economic growth and environmental benefits in the long term.