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The European Commission recently approved a handful of measures to support decarbonizing steel production processes in France and Germany.
One approval is a nearly $942 million French measure to support ArcelorMittal France in partially decarbonizing its steel production processes. The European Commission also approved two German measures to support ThyssenKrupp Steel Europe. That aid will include a direct grant of up to $609.4 million to help ThyssenKrupp decarbonize its steel production and a conditional payment mechanism to support ThyssenKrupp accelerating the phase-in of renewable hydrogen in its steel production processes.
The funding for ArcelorMittal’s project will go toward its steel production in Dunkirk, where the company operates three blast furnaces producing liquid hot metal from a mixture of iron ore, pellets, coke, coal, and preheated air. The site also has three oxygen furnaces that convert the liquid hot metal sheet to liquid steel.
The funding will support the construction of a direct reduction plant and two electric arc furnaces, the European Commission stated, and the combined installation will substitute two of the three existing blast furnaces and basic oxygen furnaces. Natural gas will also be phased out of the steel production processes, and the new installation will operate with renewable or low-carbon hydrogen, biogas, and electricity.
The funding for ArcelorMittal will be a direct grant paid in four installments between 2023 and 2026, with the combined direct reduction plant and electric arc furnace installation envisioned to start operating in 2026. The transformed site is expected to produce 4 million tonnes of low-carbon liquid steel per year.
Similarly, the funding and aid for ThyssenKrupp aims to decarbonize its steel production processes, with the grant supporting the construction and installation of a direct reduction plant and two melting units in Duisburg, which will replace an existing blast furnace. Natural gas will be phased out, with the plant operating using only renewable hydrogen by 2037.
According to the commission, “the conditional payment mechanism will cover, during the first 10 years of operation of the new direct reduction plant, the additional costs of procuring and using renewable hydrogen instead of low-carbon hydrogen.” The payment mechanism is subject to yearly verifications by independent experts on the price and volume of hydrogen consumers.
The new plant aims to be operational in 2026 and will produce 2.3 million metric tons of hot metal per year with a reduced carbon emissions footprint.
“Once completed, the project is expected to avoid the release of over 58 million tonnes of carbon dioxide over the project lifetime,” the announcement stated.