German Federal Government commits its intention to provide €55 million of funding for ArcelorMittal’s Hydrogen DRI plant
09.08.2021 01:00 Economy
During a visit to ArcelorMittal Germany’s steel plant in Hamburg, Federal Environment Minister Svenja Schulze pledged the Federal Government’s support for the construction of Germany’s first industrial scale hydrogen-based direct reduced iron (DRI) plant.
This demonstrator plant, which will use hydrogen exclusively as the chemical agent to reduce iron ore into DRI, is intended to lay the foundation for a steelmaking process that means steel can be produced with zero carbon-emissions[1>, using electric arc furnaces fed with hydrogen reduced DRI and scrap metal, powered by renewable electricity.
The Federal Government has expressed its intention to provide €55 million of funding support towards the construction of the plant, which is half of the €110 million total capital expenditure required. The next step is for the European Commission to approve the Federal Government's intention to provide funding before the installation of the new plant can begin. Production is scheduled to start in 2025.
DRI is currently produced using natural gas to reduce iron ore. In a transition phase, the process of reducing iron ore with hydrogen will first be demonstrated using hydrogen generated by the separation of waste gas from the Hamburg plant. Once available in sufficient volumes and at an affordable price, green hydrogen - made from the electrolysis of water using renewable energy - will be used. By 2030, ArcelorMittal plans to produce more than one million tonnes of zero carbon-emissions steel a year in the Hamburg plant alone, thereby saving around 800,000 tonnes of CO2 emissions annually.
The plant is an important component of ArcelorMittal Germany’s Steel4Future strategy, which involves the conversion of its four German plants - in Hamburg, Bremen, Duisburg and Eisenhüttenstadt - to zero carbon-emissions steel production in the coming years.
Commenting, Dr. Uwe Braun, CEO ArcelorMittal Hamburg, said:
“With the intended plant, for the first time we will be able to produce 100,000 tonnes of DRI for steel production using hydrogen - as early as 2025. Our project thus contributes to the goal of greenhouse gas reduction and a low-carbon economy. The technology is also directly transferrable and shows how other steelworks in our group – like Bremen and Eisenhüttenstadt - can convert to zero carbon-emissions steel production processes. But one thing is clear - the production of low or zero carbon-emissions steel is significantly more expensive than traditional steelmaking methods. When it comes to these challenges, we continue to rely on political support to create the appropriate framework conditions. The German Government's intention to provide funding helps our project and we are very grateful for this. Now we need approval from the European Commission so that words can be followed up with action.”
Svenja Schulze, German Federal Environment Minister, said:
“Ever since mankind started producing steel, it has needed coal to do so. We are helping to ensure that this will be possible in the future with hydrogen from wind and solar power. The restructuring of the steel industry is a huge challenge. The German Government will not leave the steel industry alone in the transformation. My ministry is offering concrete support for investment in climate protection through the decarbonisation funding program. For industry, our ambitious climate targets are both a challenge and an opportunity. If companies invest now in greenhouse gas-neutral processes and products such as green steel, they will be able to survive on the market in the future, and jobs will be secure. The prerequisite for all this is the expansion of renewable energies. Anyone who says yes to steel production with a future must also say yes to the spirited expansion of wind and solar energy.”
Jens Kerstan, Senator for the Environment, Climate, Energy and Agriculture in Hamburg, said:
“Those who pursue climate protection invest in the future, invest in the location and secure jobs. By switching to low-CO2 and, in the long term, climate-neutral steel production, ArcelorMittal is seizing the opportunity to become a pioneer of an innovative climate protection technology. The production of green steel is a particular challenge, and as an environmental authority we have closely supported the H2H project from the outset. I am pleased that with this project Hamburg is further expanding its pioneering role in the decarbonisation of industry. We need such innovative strategies to achieve our climate targets."
Michael Westhagemann, Senator for Economics and Innovation in Hamburg, said:
“Decarbonising industry, especially the steel industry, is a socio-political task of the century. The aim is to achieve our climate protection targets within the set deadlines without jeopardizing Germany as an industrial and technology location. Thanks to the commitment of the German Environment Ministry, here in Hamburg we are a good step closer to achieving this goal. Our heartfelt thanks therefore goes to the Federal Environment Minister and her office for their far-sighted support.”
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