Levelized cost of CO2 avoidance of an oxygen blast furnace with top gas recycling, biomass and on-site PV-powered methanation

The decarbonization of the steel industry is critical for achieving global climate targets, as the conventional blast furnace-basic oxygen furnace (BF-BOF) route remains the dominant yet carbon-intensive production method. This study evaluates the practical and economic viability of integrating oxygen blast furnace (OBF) technology with top gas recycling (TGR), biomass pyrolysis, and power-to-gas (PtG) methanation. Using the JFE Steel plant in Chiba, Japan, as a case study, the research specifically examines the impact of relying exclusively on on-site rooftop photovoltaic (PV) systems to achieve electrical self-sufficiency for hydrogen production. Results show that while this integrated configuration theoretically offers emission reductions of 65–70% with unlimited renewable energy, the actual reduction is capped at 46.4% due to the 141 MWp capacity constraint of the available rooftop area. This mitigation is driven primarily by the transition to OBF-TGR mode (15.4 percentage points) and permanent carbon storage (29.2 percentage points), whereas the contributions from biomass and synthetic natural gas (SNG) are limited to 1.8 percentage points. Economic analysis indicates a total CAPEX of 1,320 M€, largely attributed to carbon capture and electrolysis infrastructure. However, the system proves commercially viable under current market trends; a green steel premium of 186 €/t or a combination of CO 2 tax savings and lower premiums can achieve profitability. The Levelized Cost of CO 2 Avoidance (LCCA) is calculated at 126 €/t CO2 when no green premium is applied. Ultimately, OBF-TGR integration represents a robust, financially feasible pathway for partial decarbonization and the certification of net-zero steel batches.