Regional uptake of direct reduction iron production using hydrogen under climate policy

• Direct Reduction Iron (DRI) Production can play a leading role in sector decarbonisation Regional spillover effects to late-adopting regions increase the rate of deployment Such empirically-derived reduce cumulative emissions and costs Other factors including material efficiency recycling rates impact DRI's Stronger policy coordination is needed realise such pathways The need CO 2 zero by 2050 has meant an increasing focus on high emitting industrial sectors as steel. However, significant uncertainties remain technology diffusion across steel production different regions, how this might climate ambition. Informed empirical analysis historical transitions, paper presents modelling regional Direction using hydrogen (DRI-H2). We find that DRI-H2 sector, near-zero 2070. spillovers from early late adopting speed up DRI-H2, lower system costs. Without effects, are 13% higher than if assumed approximately 15% 20% China India respectively. Given estimates cost-effectiveness relative other primary technologies, we also absence spillovers. have impacts deployment, emission reductions, costs, composition adopter group, improvements scrap rates. For achieve decarbonisation, key will continue invest low carbon projects, recognising their broader global benefit, look develop strengthen technologies DRI-H2.