Germany Bets $2 Billion on Green Steel Plant

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The German government has confirmed financial backing of up to 2 billion euro (US$2.1 billion) to fund the construction of Thyssenkrupp's (Essen) giant green steel plant at Duisburg in the German state of North Rhine-Westphalia.

The so-called "tkH2steel" project is of great importance for the decarbonization of industry and the future of Germany as an industrial location, the government said. The plant, which will eventually be powered solely by green hydrogen, will have a capacity of 2.5 million metric tons--more than twice the original planned capacity--and offset the emissions of 3.5 million metric tons of CO2, the company stated. In March, Thyssenkrupp awarded a 1.8 billion euro (US$1.9 billion) contract to SMS Group for the engineering, delivery and construction of the hydrogen-powered direct reduction plant, two innovative melters, and the associated auxiliary units at the Duisburg location. Thyssenkrupp is Germany's largest steelmaker and Duisburg is the largest steelmaking plant in Europe, accounting for 2% of Germany's CO2 emissions. The company aims to avoid as much as 6 million metric tons of CO2 by 2030, representing over 30% of its emissions, and its goal is to shift completely to carbon-neutral steel production by 2045 at the latest.

Green steel projects are on the rise in Europe, and Industrial Info is tracking more than 20 such projects with a combined investment value of about US$11 billion. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here for the report.

"The steel industry in Germany has set out to tackle the major task of decarbonization and we as the federal government must and will support them in this," said Federal Economics and Climate Protection Minister Robert Habeck at a recent plant visit. "We stand by our funding commitments and, in consultation with the European Commission (EC), we will do everything we can to make this aid possible. The steel industry is deeply rooted in Germany. We will also need them here in the country and in Europe in the future. Green steel made in Germany and Europe is possible. We want to show that and that's why we're working with all our might to make the necessary support possible."

According to SMS, Thyssenkrupp will be the first steelmaker in the world to combine a 100% hydrogen-capable direct reduction plant with new melters that will be positioned immediately adjacent. This will allow the solid input stock produced there to be converted into molten iron immediately. The direct reduction plant is based on MIDREX Flex technology, which allows the plant to operate on different ratios of natural gas and hydrogen, up to 100% hydrogen (H2). The plant will start using reformed gas, comprising 50% H2 to start, before switching over to H2 completely from 2027.

The project is also supported to the tune of 700 million euro (US$748 million) by the German state of North Rhine-Westphalia, where Duisburg steelworks is located and which employs tens of thousands of people. "The path to green steel represents a major challenge, but one that is also absolutely necessary in view of climate protection. The state government of North Rhine-Westphalia stands firmly by ThyssenKrupp and supports the company on its way to climate-neutral steel production," said Mona Neubaur, Deputy Prime Minister of North Rhine-Westphalia. "The climate-neutral transformation of ThyssenKrupp is the basis for sustainable employment for tens of thousands of employees - both at ThyssenKrupp itself and at the many supplier companies and metal processing companies in North Rhine-Westphalia and beyond."

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).