Visual for illustration purpose ; Source Credit ArcelorMittal
2 minutes read

€1.3bn ArcelorMittal grants approved for hydrogen-based steel production in Germany

ArcelorMittal has had €1.3bn ($1.4bn) of grants approved by the European Commission to support decarbonise two steel plants in Germany with low-carbon hydrogen.

Direct grants from the German Government will be offered up to construct one direct reduced iron (DRI) plant and three new electric arc furnaces at sites in Bremen and Eisenhüttenstadt, where it operates three coal blast furnaces and three oxygen furnaces.

Despite the level of funding, the new DRI plant will initially operate on natural gas, which will be phased out to be replaced by low-carbon and renewable hydrogen. The Commission said the new installation will operate “exclusively” using renewable hydrogen. No date for the switch has been set.

Berlin has said the sites will use over 135,000 tonnes of renewable hydrogen per year.

However, the funding approval comes just days after Geert van Poelvoorde, CEO of ArcelorMittal Europe, had been reported by Dutch magazine Trends to have said using renewable (green) hydrogen in EU steel mills is not profitable.

Currently, electrolytic hydrogen production in the EU delivers hydrogen at costs between $5.80-$7.10/kg, compared to $2.70-$2.90/kg for CCS-enabled blue production.So far, in addition to the Germany funding, ArcelorMittal has secured over €1bn ($1.08bn) of EU state aid funding to support the introduction of renewable hydrogen into its steel production operations.

The new German installations are expected to start operations in 2026, with plans to produce 3.8 million tonnes of green crude steel per year – equal to the volumes currently produced through the blast furnace process.

Over the 16 years of the project, ArcelorMittal anticipates avoiding the release of over 70 million tonnes of carbon dioxide (CO2).

Margethe Vestager, Commission Executive Vice-President, said, “The decarbonisation of heavy industry is key for achieving the green transition…By making steelmaking greener, it helps to achieve the EU’s target of climate neutrality by 2050.”

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