Boost for DRI Production as EU Pledges Financial Support

Europe: ArcelorMittal, a Luxembourg-based Steel producer, has received funding from the European Commission (EC) to utilize hydrogen energy to produce direct-reduced Iron (DRI) at two of its steelmill sites in Europe. The funding is part of EC’s efforts to develop a more sustainable form of Steel production.

ArcelorMittal's former blast furnace/basic oxygen furnace mill in Gijon, Spain will be the site of a new Hydrogen powered (DRI) plant, as the European Commission recently announced €460 million ($492 million) investments for its construction. This is part of two separate press releases from February 17th. “Together with a new electric arc furnace (EAF), the (DRI) plant will substitute the current blast furnace,” states the EC.

ArcelorMittal Hamburg GmbH in Germany is set to benefit from an additional 55 million euros ($59 million) of funding from the European Commission (EC). The money will be used to build an advanced demonstration plant to produce (DRI), powered by Hydrogen, at the ArcelorMittal site.

ArcelorMittal has announced that it is constructing a DRI plant in Gijon, Spain with an annual capacity of 2.3 million metric tons. The project will also include 1.6 million tons per year of electric arc furnace steelmaking capacity.

ArcelorMittal has announced plans to construct a new 100,000-ton-per-year plant in Hamburg that will be powered by Hydrogen fuel. “ArcelorMittal will use the experience gained at the demonstration plant to decarbonize its Steel production in the EU on a larger scale,” says the EC.

In 2020, an environmental product declaration produced by ArcelorMittal Hamburg GmbH revealed that their Steel made through the EAF process was composed of an average of 80.2 percent recycled content - though neither the EU announcement nor scrap metal and recycling are specifically mentioned.

In 2020, ArcelorMittal's Gijon mill consumed 218,000 metric tons of ferrous scrap and 37,000 metric tons of pig Iron. Scrap made up around 83% of the mill's total feedstock.

The European Commission (EC) has stated about the two funding initiatives by DRI that they “support the objectives of key EU policy initiatives such as the European Green Deal, the EU Hydrogen Strategy and the REPowerEU Plan.”

The BDSV is calling on the EU and national governments across Europe to consider the advantages of scrap-fed Steel production when it comes to decarbonization and energy savings. “If we really want to operate in a climate-neutral manner, we need direct support for the use of scrap in the European Emissions Trading Act or a legally stipulated minimum use quota for Steel scrap in Steel production,” BDSV Managing Director Thomas Junker stated at a press event in July of last year.