With a metallization ratio currently at 94%, these DRI products could replace high-quality steel scrap, feedstock of electric arc furnace-based steelmaking, representing an important milestone for the transition to hydrogen metallurgy from the traditional carbon metallurgy in the steel industry, the North China-based steel producer said.

Compared with the same scale of traditional blast furnace-based steelmaking, the phase-one hydrogen metallurgy project will reduce emissions of carbon dioxide (CO2) by 800,000 tonnes a year, according to HBIS.

It will also capture around 125 kilograms of CO2 when producing a tonne of DRI, the company added.

Unlike internationally common natural gas-based DRI production, HBIS said it innovatively adopted coke oven gas, which contains between 55% and 65% of hydrogen.

The application of hydrogen is important in the path to achieving decarbonization and producing "green" steel.

HBIS agreed with global miner BHP Group Ltd last March to trial carbon capture, utilisation and storage (CCUS) technologies.

The steelmaker in 2021 set a target to start cutting carbon emissions after 2022, reduce carbon emissions by more than 10% from the peak by 2025, and achieve carbon neutrality by 2050.

(Reporting by Amy Lv and Dominique Patton in Beijing; Editing by David Holmes)