The decarbonization could cost the Ruhr group up to ten billion euros in total.
(Photo: dpa)
Dusseldorf In the middle of the energy crisis, the Thyssen-Krupp Supervisory Board approved an investment worth billions. As the industrial group announced, the order for the construction of a direct reduction plant with a capacity of 2.5 million tons will be awarded in the autumn. The Management Board approved the corresponding investment funds on Thursday. The supervisory board supports the decision.
Overall, the construction of the plant, in which so-called sponge iron is produced from iron ore with the help of natural gas or hydrogen, is expected to cost around two billion euros. Thyssen-Krupp hopes that the state will contribute a significant amount to the investment. The announcement states that the decision is subject to public funding.
According to Thyssen-Krupp, the new plant saves around 3.5 million tons of CO2 a year, with the group currently emitting around 20 million tons of CO2 into the atmosphere every year. Steel production is one of the most CO2-intensive industrial sectors because a large part of the iron ore consumed in Europe is smelted into pig iron in blast furnaces with the help of coal.
In the future, however, almost all European manufacturers want to switch from coal to hydrogen, which can also be used to produce steel in a climate-neutral manner. However, crude steel producers have to replace almost their entire plant park for this.
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Instead of being produced in blast furnaces, green steel is produced in electric furnaces that are not filled with iron ore but with sponge iron. Thyssen-Krupp wants to produce this in its new plant from 2026.
Waiting for the EU Commission
“The approval of this enormous investment comes in the middle of the restructuring of the company, in an environment that is also very challenging for everyone,” said CEO Martina Merz. “We are thus underscoring our claim to make a decisive and, above all, rapid contribution to the green transformation of steel.”
A large part of the iron ore consumed in Europe has so far been smelted into pig iron in blast furnaces with the help of coal.
(Photo: dpa)
With the investment approval, Thyssen-Krupp brings up the rear in the German steel industry. Both the competitors Salzgitter as well as Arcelor-Mittal and Tata Steel had already made corresponding announcements in the past few weeks, some of which are also subject to state subsidies.
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The German government has already pledged its support as part of the European IPCEI program (“Important Project of Common European Interest”). The industry is currently still waiting for a decision by the European Commission, which would first have to approve the planned support program.
The group did not announce how high its own contribution to the two-billion-euro investment will be for Thyssen-Krupp. Overall, the company estimates, however, decarbonization could consume between eight and ten billion euros in investment funds – plus the higher operating costs that arise from the use of hydrogen and electricity produced in a climate-neutral manner.
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