The European Commission has approved funding of around €55 million for steel production using green hydrogen in a demonstration plant at ArcelorMittal Hamburg.
According to ArcelorMittal, the German government had already announced its intention to support the project.
The funding is to be used to build a demonstration plant in Hamburg in which steel is produced using hydrogen instead of natural gas. This direct reduction plant will produce directly reduced iron - so-called sponge iron - as a precursor for subsequent steel production.
Up to 700,000 t CO2 savings potential
By converting all production at the site, the company aims to save 700,000 t of CO2 per year in the future.
"The new technologies will enable us to replace fossil fuels with renewable energies," explains Dr. Uwe Braun, CEO of ArcelorMittal Hamburg.
But in order to switch production entirely to hydrogen-based steelmaking, he says, the development of a hydrogen infrastructure is just as necessary as the expansion of renewable energy generation at competitive prices.
Cornerstones for achieving climate targets
ArcelorMittal Germany CEO Reiner Blaschek welcomed the Commission's approval. He said the defossilization of steel production was "one of the most important cornerstones" for achieving European climate targets.
"The European Commission's approval gives us the opportunity to plan the next steps in Germany, which we will now carefully examine. This is an essential prerequisite for driving forward the conversion of our plants in Germany and demonstrating the use of 100% hydrogen."