Europe’s largest steelmaker ArcelorMittal and the Spanish government have signed an initial deal to contribute a total of €1bn ($1.18bn) towards investment in green steel projects in northern Spain, including a direct reduced iron (DRI) unit and hybrid electric arc furnace (EAF) in Gijon.
ArcelorMittal expects that the government will cover approximately half of the costs.
The investments will reduce the firm’s carbon emissions at its Spanish operations by 4.8mn t/yr, or roughly 50pc.
The steelmaker will construct a 2.3mn t/yr DRI unit at Gijon, which will be operational by 2025. It is relying on 30-member consortium Hydeal to supply green hydrogen to the plant.
Members of Hydeal include Italy’s Snam, Spain’s Enagas and Naturgy, Germany’s Open Grid Europe, and France’s Gazel Energie, GRTgaz and Terega, and the group has backing from the European Investment Bank. The consortium aims to deliver 3.6mn t/yr of green hydrogen in Europe at €1.50/kg ($1.80/kg) by 2030, by building 95GW of solar and 67GW of electrolyser capacity, and ArcelorMittal expects Hydeal to start producing green hydrogen via solar-driven electrolysis in Asturias by 2025. A price of €1.50/kg would allow the firm’s Sestao steel plant to be competitive with other European steel units, the company said.
ArcelorMittal will transport 1.1mn t/yr of the Gijon DRI to Sestao, and hopes to reduce the site’s carbon emissions to zero by 2025 by investing an additional €50mn in initiatives such as using hydrogen instead of natural gas to reheat slabs for rolling. The company aims to produce 1.6mn t/yr of zero-carbon steel at Sestao by 2025.
ArcelorMittal will also construct a “hybrid” EAF at Gijon, meaning one that can be fed by basic oxygen furnace steel as well as DRI and scrap.