2023-07-30 04:15:00
The public aid that the Asturian steel industry demands to make the use of green hydrogen viable for the decarbonization of its processes, is already guaranteed by the German steel industry.
The European Commission has approved, under EU state aid rules, a direct grant from the Government of Germany of 550 million euros for the decarbonisation of the steel head of ThyssenKrupp Steel Europe in Duisburg through the construction of a direct reduction plant of iron ore with green hydrogen. It is a project similar to the one that ArcelorMittal manages for Gijón and for which public aid of 460 million euros has also been authorized. But the novelty is that, in the German case, Brussels has also approved in parallel a conditional aid mechanism of up to 1,450 million euros to make the use of green hydrogen by ThyssenKrupp economically viable. In other words, it not only subsidizes the construction of the green plant, but it will also subsidize the consumption of renewable hydrogen, currently much more expensive than any fossil fuel.
ArcelorMittal’s investment committee authorized this week the construction of a hybrid electric arc furnace at the Gijón factory, one of two pieces of the €1 billion decarbonisation plan that also includes the construction of a DRI plant that will replace one of the two blast furnaces at Veriña and which will feed pre-reduced iron to the new electric furnace, which will also consume scrap. This DRI plant – for which ArcelorMittal has authorized public aid of 460 million euros – has not yet been definitively approved by the steel multinational, which is negotiating an agreement with the Government of Spain on the cost and availability of the necessary clean energy. for the project to be viable.
All projects to decarbonise the steel industry with renewable hydrogen have the question of energy costs and in the case of ThyssenKrupp’s green plan for Duisburg, in the Ruhr region, they seem clear.
The German company – which in Asturias had several industrial plants and an innovation center until the sale of its elevation division, today called TK Elevator – will invest more than 2,000 million euros in the construction of the largest plant in its factory in Duisburg. direct reduced iron ore from Germany. It will start operating in 2026. Initially it will use natural gas as fuel and it will gradually be replaced by green hydrogen, with which the plant will operate exclusively from 2037.
Approval of Brussels
The European Commission (EC) has authorized the Government of Germany to support the construction of the DRI plant with a direct subsidy of 550 million euros and has also given the go-ahead to a conditional payment mechanism to Thyssenkrupp of up to 1,450 million euros which will cover, during the first ten years of operation of the new plant, the additional costs of acquiring and using renewable hydrogen. The application of this conditional payment mechanism will be subject to annual verifications by an independent expert on the actual volumes and the price paid for the renewable hydrogen consumed. ThyssenKrupp will organize a competitive bidding process to select hydrogen suppliers, which will be supervised by the German authorities.
“These measures allow Germany to support ThyssenKrupp Steel Europe’s plans to decarbonise its steel production processes and accelerate its consumption of renewable hydrogen. At the same time, they ensure that competition distortions remain limited thanks to the safeguards that the authorities will follow closely,” said Margrethe Vestager, EC vice-president in charge of competition policy.
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