Oman’s first ‘hydrogen-ready’ green steelworks worth $3bn begins construction
Vulcan Green Steel, a subsidiary of India’s Jindal Steel Group, has kicked off construction for its $3bn green steelworks in Oman.
However, while the green steel project could be one of the world’s largest on start-up in 2027 with an expected output of five million tonnes a year, its direct iron reduction plant may not run on hydrogen — raising questions as to how “green” the steel will be.
Described as “hydrogen-ready”, the facility is reportedly capable of switching from fully running on fossil gas to using 100% H2, although a timeline on when this switch will take place is unclear.
While gas-based direct-reduced iron (DRI) processed into steel has a lower emissions footprint than conventional steelmaking via coal-fired blast furnaces, it is still not CO2-free.
However, Oman is expected to be a major player in large-scale green hydrogen production, with the International Energy Agency suggesting that the country could be the largest renewable H2 exporter in the Middle East by 2030.
The Omani government has already awarded land in the eastern port of Duqm, where the green steelworks will also be built, to development consortia planning hydrogen projects following its first auction.
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Although none of these projects have yet reached a final investment decision (FID), the combined hydrogen production capacity is expected to reach 700,000 tonnes per year — although how much of this will be on line this decade is also unclear.
Hydrogen for producing green steel is gaining traction in the region.
Amid increasing calls for prospective hydrogen producers in the Middle East and North Africa to consider using H2 to displace natural gas in existing direct reduced iron (DRI) processing, the UAE has already received its first electrolysers for green steelmaking this month.
While it is unclear when Vulcan Green Steel will make its own switch to hydrogen, and whether it would produce H2 in-house or source volumes from one of the large-scale projects in the area, the steelworks also aims to use round-the-clock renewable power for its operations.
The company has reportedly sourced sufficient wind and solar to cover about 16 hours per day and is exploring options with state-owned oil and energy firm OQ for storage to cover the remaining seven to eight hours.
