BHP’s boss has seemingly ruled out the early adoption of hydrogen-powered steel production.
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If you own shares in BHP Group Ltd (ASX: BHP) you won’t be invested in hydrogen-powered steelmaking any time soon, according to the company’s boss.
BHP’s CEO Mike Henry spoke at an industry conference on Thursday. He reportedly said he didn’t believe BHP will be using hydrogen to decarbonise the company’s activities any time soon.
Additionally, Henry purportedly thinks hydrogen-based steelmaking won’t be common for another 2 to 3 decades.
The BHP share price finished the week just been trading at $37.73, 2.3% higher than it started it.
Let’s take a closer look at the company’s CEO’s view on the future of hydrogen.
Has BHP turned its back on hydrogen?
Those invested in BHP shares shouldn’t anticipate the company embracing a hydrogen-powered future – at least not for a little while.
He also reportedly said widespread use of hydrogen as a fuel source in the steelmaking industry is decades away.
Henry’s view of hydrogen is the opposite of that of some of BHP’s peers.
Fellow iron ore giant, Fortescue Metals Group Limited (ASX: FMG) is working toward a green hydrogen-powered future.
Green hydrogen differs from regular hydrogen as its made using renewable energy.
It’s a key part of Fortescue’s Fortescue Future Industries initiative. The company recently designed and constructed a hydrogen powered truck and drill rig, and believes hydrogen is a key energy source in the decarbonisation of heavy industry.
Henry reportedly also believes in the potential to use hydrogen as a fuel source for direct reduced iron (DRI).
Though, he doesn’t think hydrogen will be used widely in the industry for another 20 to 30 years. S&P Global Platts quoted Henry as saying:
Hydrogen will have its day, but it’s going will take some time to get there given current economics… and the massive quantity of capital needed to develop green DRI.
He also reportedly pointed to the steel industries of China and India, saying the capital sunk into coal-fired blast furnaces would discourage the uptake of hydrogen-powered alternatives.
The company is still working towards decarbonisation, but it’s doing so using other, more technologically focused methods.
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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.