ArcelorMittal is outlining a substantial plan to invest more than a billion euros to decarbonize part of its steel production in Gijón by using green hydrogen instead of coal. In the early phase, the company will rely on other fossil-derived gases, with green hydrogen slated to become commercially sustainable once its price becomes competitive with natural gas. The transition is a long journey, and this week saw the launch of a hydrogen price index based on market-negotiated prices, showing that renewable hydrogen currently costs roughly eight times more than natural gas.
The European Energy Exchange (EEX) is recognized as Europe’s leading energy marketplace, and this week it introduced the Hydrix index. Hydrix tracks weekly price information for green hydrogen traded in the market, reflecting the balance between energy sector supply and industrial demand.
“Hydrix closes a price signal gap and is vital for market growth and for attracting continued investment in the hydrogen economy. With a reference index built on actual market prices for hydrogen, investors gain a clearer benchmark for decisions. In this way, the industry can move toward a carbon-neutral energy future,” stated Peter Reitz, CEO of EEX.
In its inaugural release, the Hydrix index shows green hydrogen priced at €231.6 per megawatt-hour for week 19 of the year, €226.2 for week 20, €222.8 for week 21, and €228.164 for week 22. This first global price reference for green hydrogen is not as cumbersome as the price of natural gas had been, peaking at around €340 in the previous summer. Yet today, natural gas trades below €30 on the European reference market, the Dutch TTF. Taken together, the data implies that the price of green hydrogen remains nearly eight times higher than natural gas.
ArcelorMittal and other companies are closely watching how green hydrogen pricing evolves. The multinational steel producer is moving ahead with a multi-year investment plan that exceeds one billion euros to decarbonize part of its Gijón steel operations. The plan includes replacing one of the two blast furnaces with a direct reduced iron (DRI) process, followed by an electric arc furnace fed by green hydrogen and renewable energy. While the DRI project is designed to run on green hydrogen, initial operations will rely on natural gas as a reducing agent until green hydrogen becomes commercially sustainable and price-competitive with traditional fuels.