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Good news: Green light for āgreenā steel: EU allows billions in subsidies for Thyssenkrupp for sustainable steel production.
The EU Commission has approved German billions in aid for the construction of a large-scale plant for the production of more climate-friendly steel by Thyssenkrupp. The EU Commission has just announced in Brussels that support of up to two billion euros is at stake.
What is āGreen Steelā?
āGreen Steelā an emerging term in the steel industry that referred to environmentally friendly methods of making steel. Green steel refers to steel that is manufactured using renewable energy sources and produces less CO2 emissions than conventional steel.
Conventional steel production is based on the blast furnace process, in which iron ore is smelted in a blast furnace using coal or coking coal as a reducing agent. This produces carbon dioxide (CO2) as a by-product, which contributes to the high CO2 emissions of the steel industry.
Using green hydrogen as a reducing agent instead of coal or coking coal
In contrast, there are different approaches to making green steel. One promising avenue is to use green hydrogen as a reducing agent instead of coal or coking coal. Green hydrogen is obtained by electrolysis of water using renewable energy sources such as wind or solar power, resulting in only water and no CO2 emissions.
The production of green steel can be roughly divided into the following steps:
Green Hydrogen Production: Hydrogen is produced by the electrolysis of water using renewable electricity. Reduction of iron ore: Instead of coal or coking coal, green hydrogen is used as a reducing agent in the blast furnace to extract the iron from the iron ore. Steel Production: The raw steel obtained is further processed as usual and converted into various steel products.
Green steel is not yet commercially available on a large scale and faces challenges in terms of cost and technical feasibility. However, the steel industry is striving to adopt more sustainable production methods to reduce its carbon footprint and combat climate change.
āGreenā steel: EU confirms subsidies and billions for steel giant Thyssenkrupp.
UPDATE 12:01 p.m
The EU Commission has approved German billions in aid for the construction of a large-scale plant for the production of more climate-friendly steel by Thyssenkrupp.
Specifically, it is about support of up to two billion euros, the EU Commission announced on Thursday in Brussels. According to the information, the aid is divided into two parts.
Support up to ā¬2 billion
On the one hand, subsidies of up to 550 million euros are to be used to support the construction and assembly of a steel production plant. Initially, natural gas will still be used for operation, but the gas is to be completely replaced by renewable hydrogen by 2037, making it more climate-friendly.
The remaining up to 1.45 billion euros of the aid is to be used to finance a mechanism that is intended to cover additional costs in the first ten years of operation of the new plant.
Renewable hydrogen instead of low-CO2 hydrogen
Specifically, it is about the costs that would be incurred when procuring and using renewable hydrogen instead of low-CO2 hydrogen.
According to the Commission, the release of more than 58 million tons of CO2 can be avoided during the entire lifetime of the project. Thyssenkrupp has undertaken to actively pass on knowledge gained as part of the project to industry and science.
Germanyās largest steel manufacturer Thyssenkrupp Steel wants to build a so-called direct reduction plant (DR plant) in Duisburg for the production of āgreenā steel.
Operated with climate-neutral hydrogen
It is to be operated with climate-neutral hydrogen and thus significantly reduce the emission of greenhouse gases during steel production. According to earlier information, the state of North Rhine-Westphalia and the federal government want to fund the project with a total of around two billion euros.
The entire system is scheduled to go into operation at the end of 2026.
The entire plant, which also includes two so-called melters, is scheduled to go into operation at the end of 2026. According to earlier information, it would then be the largest such facility in Germany. However, construction has not yet started. Around 13,000 people work for Thyssenkrupp in Duisburg.
In Germany, other steel producers want to build such plants. In April, the Salzgitter company received a grant of one billion euros.
update 20.07. 1:39 p.m. āOpportunity for long-term perspectives for value creationā
From the point of view of the state government of North Rhine-Westphalia, the approval of the billions in aid for the construction of a plant for āgreenā steel in Duisburg has far-reaching economic effects.
āThis is a unique opportunity for long-term perspectives for value creation, international competitiveness and the preservation of good jobs,ā said North Rhine-Westphaliaās Prime Minister Hendrik WĆ¼st (CDU) on Thursday in DĆ¼sseldorf.
A complete value chain that extends far into the metalworking medium-sized companies in the state will be made sustainable and will remain in the state. The plant itself will also be built by a large company from North Rhine-Westphalia. WĆ¼st emphasized that the state wanted to contribute up to 700 million euros to the construction of the plant. This is the largest single grant in the history of the state.
Germanyās largest steel manufacturer Thyssenkrupp Steel wants to build a so-called direct reduction plant in Duisburg to produce more climate-friendly steel. It will initially be operated with natural gas and later with hydrogen produced in a climate-neutral manner, thereby significantly reducing the emission of greenhouse gases during steel production.
āDecisive dayā for the future of the steel location NRW
NRW Economics Minister Mona Neubaur (Greens) spoke of a ādecisive dayā for the future of the steel location of NRW, for the preservation of an industrial core sector and for securing tens of thousands of jobs. āThe group and the employees are now in a position to press ahead with the climate-neutral transformation of their production at full speed.ā
ThyssenKrupp Steel can thus reduce production CO2 emissions by almost 20 percent in a timely manner. āThat already corresponds to 8 percent of the greenhouse gas emissions of the entire NRW industry.ā At the same time, the ramp-up of the hydrogen economy is being accelerated. The project will thus be an āindustrial policy milestoneā for NRW on the way to becoming the first climate-neutral industrial region in Europe.
Thyssen Krupp Gruener Stahl climate-friendly plant Greentech Live
Update 07/20/23 4:46 p.m. Subsidies for plant construction and hydrogen procurement
According to the EU Commission, the aid for Thyssenkrupp is split into two. On the one hand, subsidies of up to 550 million euros are to support the construction and assembly of the plant. Initially, natural gas will still be used for operation, but the gas is to be completely replaced by renewable hydrogen by 2037, making it more climate-friendly.
Green hydrogen: Cap additional costs
The remaining up to 1.45 billion euros of the aid is to be used to finance a mechanism to cover additional costs in the first ten years of operation of the new plant. Specifically, it is about the costs that would be incurred when procuring and using renewable hydrogen instead of hydrogen produced with low CO2 emissions.
Large amounts of hydrogen required for operation: 4.8 terawatt hours
If the new plant is operated with hydrogen, Thyssenkrupp expects an annual consumption of 143,000 tons just from this plant. This amount has the equivalent of an energy content of almost 4.8 terawatt hours.
For comparison: Germany currently uses around 55 terawatt hours of hydrogen per year, which is mainly produced from natural gas. The federal government expects the demand for hydrogen to increase sharply in the coming years. It is to be produced primarily with the help of renewable electricity from water.
Greentech hydrogen consumption in Germany is currently 55 terawatt hours per year
Thyssenkrupp itself wants to purchase the gas for its new plant from several suppliers. It has been said that a delivery infrastructure has been in the works for several years. By 2027, the plant should be connected to a national hydrogen network.