Hydrogen Production: Ansteel’s Green Hydrogen DRI Pilot in Bayuquan

On August 28, 2025, Anshan Iron & Steel Group (Ansteel) celebrated a game-changing achievement: they fired up the world’s first hydrogen-based fluidized bed ironmaking pilot plant powered entirely by renewable energy in Bayuquan, Liaoning Province. With a 10,000-ton annual capacity and hitting a sweet 95% metallization rate, it’s proof that near-zero-carbon steel isn’t just lab talk anymore.

Reinventing Steel with Green Hydrogen

Traditional steel mills rely on coking coal and blast furnaces—one big reason steelmaking shoulders about 8% of global CO₂ emissions. Ansteel’s twist? Ditch the coal. They’re using green hydrogen—made on-site via wind and solar electrolysis—to reduce iron ore in a fluidized bed reactor. No coke, no sintering, just cleaner iron ready for electric arc furnaces (EAF) or further refining.

How It Works

Here’s the crux: water electrolysis splits H₂O into hydrogen and oxygen using clean power. The green hydrogen then dives into a hot reactor, pulling oxygen out of iron ore pellets and yielding sponge iron with up to a 90% CO₂ cut compared to blast furnaces. That 95% metallization figure means the direct reduced iron (DRI) meets or beats industry specs—think advanced steel grades for electric vehicles.

Strategic Ripples

This pilot isn’t just a flashy demo; it’s Ansteel’s strategic play to back China’s 2060 carbon neutrality goal and snag early-mover bragging rights in the budding green steel sector. With automakers and builders hunting for low-carbon materials, the plan is to ramp up to a 500,000-ton per year industrial demo next.

Bayuquan’s Industrial Evolution

Known as the “Cradle of China’s Steel Industry,” Anshan has iron ore and coal in spades. But Bayuquan is flipping the script—transforming from coal-heavy production to a hub for sustainable energy and hydrogen metallurgy. Local deep-water ports and power grids made it a no-brainer to slot this pilot into existing plant footprints.

Broader Impacts

If hydrogen production-based DRI goes global, steelmakers could churn out near-zero-carbon products for infrastructure, autos, and appliances. That shift will shake up coal communities and demand massive investments in electrolysis and hydrogen infrastructure. But pilots like Bayuquan are fueling policy momentum and market confidence in industrial decarbonization.

Looking Ahead

This pilot is a turning point: green hydrogen in steelmaking is no pipe dream anymore. As electrolyzer costs tumble and grid renewables expand, we’ll see more demos—and eventually commercial rollouts. Will Ansteel’s Bayuquan blueprint set the global pace? Only time—and the bottom line—will tell.

About Ansteel

Founded in 1916, Anshan Iron & Steel Group stands tall as one of China’s biggest state-owned steel producers. In 2025, they launched this landmark hydrogen-based DRI pilot, underscoring their push toward low-carbon metallurgy and sustainable energy.