Green Hydrogen Adoption in Saudi Arabia Steel Industry

Abstract

The steel industry is a major global contributor to greenhouse gas emissions and climate change, as steel production relies heavily on fossil fuels like coal and natural gas. Saudi Arabia's steel industry is no exception, resulting in high carbon emissions in the country carbon footprint. However, green hydrogen offers a promising decarbonization solution. Green hydrogen is produced through the electrolysis of water using electricity from renewable energy sources such as solar or wind. In this process water is splited into hydrogen and oxygen gas without any direct carbon emissions. It can replace fossil fuels such as coal and natural gas in carbon-intensive industries such as the steel industry, by using it as a reducing agent and fuel source in the steel mills. Where it has significant potential to lower emission and reduce the industry carbon footprint within the country. This thesis investigates the adoption of green hydrogen technology in Saudi Arabia steel industry through the theoretical lenses of technology-organization-environment (TOE) framework and diffusion of innovation theory(DOI). Qualitative, semi-structured interviews were conducted with 7 representatives from Saudi steel companies to understand the factors influencing green hydrogen adoption. The interview questions were structured around the three elements of the TOE framework, technological, organizational, and environmental contextual factors. Also, the five stages in the adoption decision as per diffusion innovation theory (DOI). The study found that while there is increasing interest in green hydrogen in the Saudi steel industry. The technology is still in the early stages and considered as an unproven and scalable to be currently adopted. The technological complexity still hinders the adoption of the technology, while it was found to be highly compatible with the current production systems. Moreover, the lack of supporting regulations, and incentives over future environmental policies were also cited as adoption challenges. The interviewees noted the potential benefits of green hydrogen in reducing emissions and improving the industry carbon footprint by increasing government support, in which it could facilitate wider adoption of the technology. Recommendations include developing regulations and incentives for green hydrogen and emphasizing the relative advantages to overcome perceptual barriers. Targeted policies will be critical to enabling a transition to green steel production in Saudi Arabia.