Supermajor Shell is teaming up with Australian steel producer Bluescope to explore potential green hydrogen opportunities in the Australian state of New South Wales.

Bluescope revealed this week it had signed a memorandum of understanding with Shell Energy to explore and develop green hydrogen projects at Bluescope’s Port Kembla Steelworks in the NSW Illawarra region.

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Initially the pair will explore designing, building and operating a pilot-scale 10-megawatt green hydrogen electrolyser at the Port Kembla Steelworks.

The proposed project will test the use of green hydrogen in the blast furnace in a bid to demonstrate hydrogen as a pathway towards low emissions steelmaking.

Bluescope noted it could potentially find other uses for hydrogen produced by the pilot project, such as to feed a pilot direct reduced iron plant.

The MoU also provides the scope for Shell and Bluescope to collaborate with other entities on the establishment of a “hydrogen hub” in Illawarra.

The hub concept project will see the companies explore options for hydrogen supply and offtake, renewable energy supply and hydrogen and electricity infrastructure. It will also see the companies examine the logistics infrastructure needed for a commercially viable hydrogen supply chain in the Illawarra region.

Bluescope chief executive Mark Vassella added that for the potential hydrogen hub to progress it would need support from governments, regulators, customers and suppliers.

“We are excited about the potential for these projects and are pleased to be working with Shell which brings global expertise in developing new energy technologies, including green hydrogen,” he said.

“We are looking to the future; short, medium and long term and we are looking forward to seeing what a pilot hydrogen electrolyser can teach us about the production, storage and handling of hydrogen and, importantly, how hydrogen will behave in a blast furnace.”

Shell Australia chairman Tony Nunan added: “Hydrogen has the potential to play a key role in decarbonising hard-to-abate sectors, many of which are central to Australia’s economic and social development.

“Shell looks forward to working with BlueScope and leveraging each other’s strengths and capabilities to explore the development of integrated hydrogen supply chains. Collaborations such as these are fundamental to accelerating progress towards a net-zero emissions future.”