Masdar has canceled plans for a 100 MW green hydrogen plant at EMSTEEL’s steel complex in Abu Dhabi, underscoring the growing gap between technical feasibility and commercial viability in the global hydrogen market.
According to MEED, Masdar notified contractors on August 1 that the project had been canceled after bids were submitted by Envision, Larsen & Toubro, PowerChina, Samsung E&A and Sinopec. The company had previously asked bidders to extend their offers while it evaluated the proposals.
The planned alkaline electrolyzer would have supplied renewable hydrogen directly to EMSTEEL’s Musaffah facility, where hydrogen is used as a reducing agent in direct reduced iron production. The project had advanced beyond the planning stage, with Masdar awarding a front end engineering and design contract to NT Energies in 2024.
The cancellation follows a 2.1 MW pilot project commissioned by Masdar and EMSTEEL in 2024. The pilot demonstrated the use of green hydrogen in steel production and was designed to support production of up to 5,000 tonnes of green steel annually.
The move from a 2.1 MW pilot to a 100 MW industrial plant would have represented a nearly 48 fold increase in electrolyzer capacity. That scale introduces challenges that cannot be resolved through technical demonstration alone, including electricity costs, electrolyzer utilization, financing, hydrogen storage and long term offtake.
Steel remains one of the strongest potential applications for green hydrogen because hydrogen can replace fossil based reducing agents in direct reduced iron production. However, the commercial case depends on whether low carbon steel can command sufficient value to offset the higher cost of renewable hydrogen.
The cancellation also comes amid a more selective global hydrogen investment environment. Developers are increasingly reassessing projects where demand, financing or production economics remain uncertain.
Masdar and EMSTEEL’s pilot demonstrates that hydrogen based steelmaking is technically achievable. The abandoned 100 MW project highlights the harder question facing the industry: whether that technology can be scaled into a commercially competitive supply chain.
For Abu Dhabi, the decision does not eliminate hydrogen’s role in steel decarbonization, but it shows that future projects will likely require stronger alignment between renewable power costs, hydrogen production, industrial offtake and the market value of lower carbon steel.
