[ad_1]
The world’s first large-scale carbon-free steel plant will require 500 million euros ($ 588 million) from public money to move forward, Reload has learned.
ArcelorMittal, the world’s largest steel producer, announced last week that after signing a memorandum of understanding with the Spanish government, it will oversee a € 1 billion investment to build an iron plant in direct reduction fueled with green hydrogen at its existing site in Sestao on the outskirts of Bilbao, as well as a new electric arc furnace.
Powering this redesigned factory with renewable energy would mean that the Sestao factory would produce 1.6 million tonnes of zero-carbon steel by 2025.
“Given the significant cost associated with the transition, both in terms of capital and operating expenses, ArcelorMittal expects [that public] the support will cover at least half of the additional costs to allow its operations to remain competitive while accelerating its decarbonization program, â€ArcelorMittal said in a statement.
An ArcelorMittal spokesperson confirmed Reload that this means that 500 million euros of public funding will have to come from the Spanish or Basque governments or perhaps the EU – which begs the question of whether to hand over that much money to a conglomerate worth about $ 30 billion is a good use of taxpayer dollars.
It also underlines the scale of the challenge needed to decarbonize heavy industry.
The article continues under the ad
The steel industry has traditionally used coke – a form of coal – both as a heat source and as a method of removing unwanted oxygen from iron ore (iron oxides) in a process known as reduction name. Therefore, the steel industry would produce 8% of the world’s annual carbon emissions.
Clean hydrogen has long been proposed as a replacement method for coke because it can provide both the necessary high-temperature heat and remove oxygen in ways that purely electrical solutions cannot. (Electric arc furnaces are used to melt steel scrap, not to process iron ore).
This raises questions about whether handing over that much money to a conglomerate worth around $ 30 billion is a good use of taxpayer dollars.
The Sestao plant is the first “significant†use of green hydrogen for direct iron reduction, explains ArcelorMittal.
“This is an extremely important development that demonstrates the strength of innovation built into our people, our unprecedented technological leadership and what can be achieved through investments in existing steel infrastructure,” said the Managing Director Aditya Mittal. “This means that ArcelorMittal will be the first company in the world to be able to offer its customers significant volumes of zero carbon steel.
“The ability of the Sestao plant to become the world’s first zero carbon steel plant would not be possible without the support and partnership of the Spanish government. “
ArcelorMittal also revealed in the fine print of a press release: “If green hydrogen was not available at affordable rates by the end of 2025, natural gas would be used to power the DRI furnace.
[ad_2]
