Australia backs hydrogen technology pilot for low-emission steelmaking

The Australian Renewable Energy Agency (ARENA) has awarded A$15 million in funding to Hadean Energy for a pilot project aimed at reducing the cost of green hydrogen production and demonstrating its use in steel manufacturing.

The A$30 million project will involve the construction and operation of a hydrogen production facility in Victoria, subject to final site arrangements and regulatory approvals. The hydrogen will be supplied to a separate industrial facility for use in steelmaking processes.

Announced on November 5, 2026, the initiative is intended to test whether an Australian-developed hydrogen technology can improve energy efficiency and make hydrogen more economically viable for industrial applications.

Technology could reduce electricity consumption by 30%

One of the main obstacles to the wider adoption of green hydrogen remains its high production cost, particularly the electricity required for electrolysis.

According to Hadean Energy, its technology could produce hydrogen using approximately 30% less electricity than conventional electrolysers.

The pilot plant is designed to produce up to seven kilograms of hydrogen per hour. This would cover around 85% of the hydrogen required for an annealing process in steel manufacturing.

Annealing is a heat treatment process used to modify the mechanical properties of steel. The project will therefore demonstrate hydrogen use in an industrial processing application rather than in the direct reduction of iron ore.

ARENA expects the pilot to provide operational data on the technology's efficiency, reliability and commercial potential under real industrial conditions.

Australian research moves towards commercial application

The hydrogen technology was originally developed over eight years by Australia's national science agency, CSIRO, with earlier support from ARENA.

The new funding will allow Hadean Energy to advance the technology towards commercial readiness while developing domestic engineering expertise, manufacturing capabilities and supply chains.

ARENA CEO Darren Miller emphasised that reducing electricity consumption could make green hydrogen more affordable for industries where direct electrification remains difficult.

The agency considers hydrogen an important potential contributor to industrial decarbonisation, particularly in iron and steel production and other energy-intensive sectors.

Potential applications beyond steel manufacturing

Although the initial demonstration focuses on hydrogen use in steel processing, the technology could eventually serve a wider range of industrial applications.

ARENA also identifies the production of low-emission synthetic fuels as a possible future application, particularly in sectors that require energy-dense fuels.

For the steel industry, the project represents a further attempt to address one of the principal economic challenges of hydrogen-based decarbonisation: producing sufficient quantities of low-emission hydrogen at competitive costs.

The pilot's results will help determine whether the technology can be scaled up for broader commercial deployment.

Source: Australian Renewable Energy Agency (ARENA), Photo: Pixabay