DUISBURG (dpa-AFX) – Germany’s largest steel producer, Thyssenkrupp Steel, remains committed to building a facility for more climate-friendly steel production in Duisburg. “We are sticking to our plan to complete the first direct reduction plant in Duisburg,” a company spokesperson told the German Press Agency dpa. At the same time, he noted that the project is operating “at the edge of economic viability.”
Construction has already begun. The company is set to receive a total of around €2 billion in subsidies from the federal government and the state of North Rhine-Westphalia (NRW) for the project.
On Thursday, steel giant ArcelorMittal announced it was putting its green steel plans in Germany on hold for the time being. The company will not move forward with its decarbonization projects at its flat steel plants in Bremen and Eisenhüttenstadt. ArcelorMittal explained that, due to the current market situation and the lack of economic viability for CO2-reduced steel production, it could not continue with the investments. The government had already approved €1.3 billion in subsidies for ArcelorMittal’s planned projects.
Thyssenkrupp: "At the Edge of Economic Viability"
Thyssenkrupp Steel also pointed to the economic challenges in its statement: “We are operating at the edge of economic viability with this project,” the spokesperson said. “Above all, there is currently no prospect of sufficient affordable hydrogen and of long-term, competitively priced energy.”
While the plant could be operated with natural gas, “the whole point is to avoid as much CO2 as possible and make the steel green.” For this reason, it is important that the federal government pursues a growth-oriented industrial policy and tackles the major issues decisively.
Facility in Duisburg to Replace Two Blast Furnaces
The climate-friendly steel production facility is set to replace two blast furnaces by 2030. It will initially run on natural gas, and later switch to hydrogen. If operated solely on hydrogen, the plant would require around 143,000 tonnes of hydrogen annually.
According to current plans, the facility will cost around €3 billion. Jochen Burg, CEO of plant engineering company SMS Group, told the "Westdeutsche Allgemeine Zeitung" in late March that the direct reduction plant is scheduled to gradually ramp up operations from the end of 2027 onwards.
