The global steel industry is responsible for approximately 8% of CO2 emissions within the production industry. In order to reach its target of net-zero emission by 2050, it needs to make some significant changes.
Last week, ArcelorMittal, the world’s leading steel and mining company, announced that it signed a memorandum of understanding with the Spanish government on a €1 billion joint investment to build the “world’s first full-scale zero carbon-emissions steel plant”. The goal is to reduce about 50%, or 4.8 million tonnes, of CO2 emissions at ArcelorMittal’s Spanish operations by 2025.
“Given the significant cost associated with the transition, in terms of both capex and opex, it is ArcelorMittal’s expectation this support will cover at least half of the additional cost to enable its operations to remain competitive as it accelerates its decarbonization program,” the company stated.
The plan is to to build a 2.3 million-tonne green hydrogen direct reduced iron (DRI) unit at its present factory in Sestao, as well as a new 1.1 million-tonne hybrid electric arc furnace (EAF), which has a carbon footprint significantly lower than the current blast furnace- basic oxygen furnace steel production. The new DRI – which will be the first of its kind in Spain – and EAF will be in production before the end of 2025.
In order to decrease emissions, green hydrogen will be used to reduce the iron ore in the DRI, and the EAF powered by renewable electricity, meaning the Sestao plant would produce 1.6 million tonnes of zero-carbon steel.
To develop other projects such as large-scale solar-to-hydrogen and hydrogen pipeline projects in the area, ArcelorMittal will require a €500m investment of public money, along with other government supported initiatives. The initiative involves the construction of multiple large-scale solar farms, with hydrogen produced at the site and with the corresponding impact in terms of employment.