Thyssenkrupp gives green light to DRI plant

Members of Thyssenkrupp’s executive board have agreed to allocate more than €2 bn ($2 bn) of capital for construction of the German conglomerate’s first direct reduction iron (DRI) plant. A final go-ahead remains subject to public funding.

The company’s intention is to award the contract for the 2.5 Mt/y unit at its Duisburg works in Q4 with production starting in 2026. Adopting the DRI process will reduce CO2 emissions by 3.5 Mt/y, according to the company.

Executive board chairman Bernhard Osburg said: “We are continuing to set the pace on our path to climate-friendly steel production. The first direct reduction plant with downstream melters will supply our customers with over 2 Mt of low-CO2, premium steel per year in the foreseeable future, significantly more than previously planned.”

Thyssenkrupp’s goal is to play a role in green steel markets and support customers in achieving their decarbonisation targets, he added.

The group’s steel making decarbonisation is centred on coal-based blast furnaces (BFs) being replaced by hydrogen-powered DRI plants. As the iron produced will be liquefied, ThyssenKrupp contends its entire premium product portfolio can be produced with low carbon dioxide emissions without compromising on quality.

Thyssenkrupp takes Europe a step closer to DRI/HBI vision

Steelmakers in Europe have been increasingly showing interest in the DRI market. Currently, the global DRI/HBI market remains relatively small, with only 109 Mt produced in 2021, only 8 Mt of which were merchant volumes on the seaborne market.

Europe’s imported HBI from Russia, specifically from Metalloinvest, is now less secure due to risks surrounding sanctions resulting from Russia’s invasion of Ukraine.  Pushes to decarbonise, with the higher carbon cost from the EU Emissions Trading Scheme as well as hopes for a green premium for steel products, have resulted in Europe aiming to develop its DRI capabilities.

In 2021, the region produced only 0.5 Mt of DRI but consumed 3.8 Mt. Production is set to rise to 5 Mt by 2026, when consumption is expected to be at 10 Mt. This means that Europe will remain heavily reliant on imports even with projects like Thyssenkrupp’s coming to fruition. Out of 54 DRI/HBI projects identified by CRU, 20 are in Europe. Many of the companies involved are hopeful that green hydrogen technology will be successfully developed.

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