Steel production costs by technology route, with expected policies

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All routes are modeled on a 25-year project timeframe; BF-BOF asset includes a reline in 2035. NG DRI-EAF (US) route assumes sourcing natural gas-based hot-briquetted iron (HBI) from the United States (e.g., from Hyundai’s planned plant in Louisiana), with EAF steelmaking in Korea. H₂ DRI-EAF (Aus) route assumes sourcing green HBI from Australia, with EAF steelmaking in Korea. Ore-based routes assume 20% scrap usage; DRI-EAF routes use 67% Fe DR-grade pellets; H₂ DRI-EAF routes both use renewable electricity. Costs above include Green Steel Fund and H₂ Steelmaking Fund capital subsidies (~US$317 million combined total funding), projected K-ETS costs (based on historical K-ETS prices and global market projections), expected hydrogen CfD impact, thermal coal consumption tax (US$28.29 per ton), the Climate Surcharge for Power (US$6.12/MWh), potential fossil fuel subsidy removals for coal (US$0.95/ton) and natural gas (US$0.05/GJ), and potential subsidy for electricity (US$0.05/MWh). See Exhibit 1 and Exhibits B1 and B2 in Appendix B for more details.

Source: RMI analysis.