Green light for green steel from the Bundeswirtschaftsministerium: On April 18th, Federal Minister of Economics Robert Habeck presented Salzgitter AG's CEO Gunnar Groebler with a funding decision worth around one billion euros. The money is to support the SALCOS® - Salzgitter Low Carbon Steelmaking program launched in 2015, which aims to use green hydrogen in steel production. Almost every steel group today relies on the new energy carrier. The example of Salzgitter shows how the green steel process works, where steel companies can source green hydrogen from and which opportunities the H2 boom holds for plant engineering.
Conventional steel production is very CO2-intensive. As Habeck pointed out at the funding ceremony, the German steel industry alone is responsible for around 6% of total emissions in Germany. Looking at the emissions of the industrial sector, this figure is even close to 30%. This is therefore an excellent lever for decarbonization. And this is where green hydrogen comes into play.
Direct reduction with coking coal
In the coal-based blast furnace route, oxygen is removed from iron ore or oxide. This is how pig iron, the most important starting material for steel production, is obtained. Steel producers need coking coal for oxygen removal, i.e. reduction. This not only supplies the thermal energy for liquefying the iron, but also provides carbon monoxide, which serves as a reducing agent for the iron oxide:
Fe2O3 + 3CO --> 3CO2 + 2Fe
In addition to liquid pig iron, therefore, large quantities of CO2 also leave the blast furnace. As a rule of thumb, 1.5 tons of CO2 are emitted per ton of steel. The production of pig iron is responsible for around 85 % of the emissions from the entire steelmaking process.
For this reason, a potentially emission-free process is currently on everyone's lips: direct reduction. In this process, green hydrogen serves as a reducing agent for the iron oxide. The only by-product is water vapor:
Fe2O3 + 3H2 --> 2Fe + 3H2O
The end product is not liquid pig iron, but solid sponge iron (also "DRI" for "Direct reduced Iron"), which is then melted into crude steel in an electric arc furnace. For direct reduction to be truly emission-free and produce the coveted green steel, two things are crucial:First, the temperature of around 900 °C required for the reaction must be generated without the use of coal. If you don't want to use natural gas for this, you have to heat electrically - at best on the basis of renewable energies. And secondly, the hydrogen used for the reduction must be "green," i.e., also produced with renewable energies. Mind you, huge quantities of green hydrogen are needed: Around 1,900 kWh of H2 per ton of crude steel, according to a study by the Fraunhofer Institute.
To provide the required hydrogen, Salzgitter relies on several interlocking sub-projects: In addition to in-house production, there are plans to procure hydrogen from Germany and abroad.
At the end of 2018, Salzgitter Flachstahl GmbH, industrial gas supplier Linde AG and energy company Avacon Natur GmbH signed a contract for the "Windwasserstoff Salzgitter" project, or "WindH2". The aim is to produce the company's own hydrogen from wind power using a 2.5 MW PEM electrolyzer from Siemens Energy. The required electricity is to be generated by seven wind turbines, each with an output of 30 MW, which Avacon AG has erected on the Salzgitter site. The project will cost around € 50 million.
While WindH2 relies on industrial hydrogen production using proven water electrolysis technology, the EU research project "Green Industrial Hydrogen" (GrInHy, pronounced "Green High") tested an alternative approach. Together with Dresden-based Sunfire GmbH and partners from five EU countries, the first run ran from March 2016 to February 2019.
GrInHy used what is known as high-temperature electrolysis (HTE). Unlike water electrolysers, Sunfire's HTE uses steam at around 850 °C generated by waste heat from steel production. Incorporating the waste heat increases the efficiency of the process. A test plant went into operation on the smelter site in October 2017.
In January 2019, Salzgitter and Sunfire launched the follow-up project GrInHy2.0 with plant manufacturers Paul Wurth and Tenova LOI, with the project partners increasing the electrolysis capacity from 150 to 720 kW. The project was completed in October 2022. A total of 100 t of green hydrogen was produced and fed into the Salzgitter Flachstahl plant, where it was used in annealing processes and galvanizing plants for steel refinement. The company said it was very satisfied with the result; the partnership between Sunfire and Salzgitter is to continue.
Partnerships with the gas sector
In addition, Salzgitter announced two partnerships with German gas suppliers in the context of the award of the subsidy. With Leipzig-based VNG AG, Salzgitter intends to examine which additional options for hydrogen supply are conceivable. In addition to the connection to a supra-regional pipeline network, which in the long term would likely be the most efficient solution, there is also the possibility of supplying hydrogen via non-pipeline-bound carrier media such as ammonia or methanol. Particularly with regard to ammonia, VNG has made numerous inquiries in recent months.
Salzgitter has also agreed a hydrogen supply partnership with the Oldenburg-based energy supplier EWE. While the Leipzig-based colleagues at VNG are primarily focusing on global import chains, EWE has plans for the independent production of hydrogen. One focus is on the IPCEI project "Clean Hydrogen Coastline" for the offshore production of hydrogen in the North Sea: "We want to build up to 400 MW of electrolysis capacity in several sub-projects at system-serving locations near the German North Sea coast. Depending on the sales market, we can thus produce up to 40,000 tons of green hydrogen annually," said EWE CEO Stefan Dohler when announcing the MoU with Salzgitter. In perspective, he added, capacities could be "expanded on a gigawatt scale."
The green transformation will cost German steel companies a lot of money. According to a report by VDI, the figure is around €7 billion at thyssenkrupp and €3 billion to €4 billion at Salzgitter and Stahl-Holding-Saar. Similar projects are under way at Hüttenwerke Krupp-Mannesmann and ArcelorMittal. According to the VDI, the total investment required to build up decarbonized steel production by 2045 amounts to around €15 billion. Without extensive support programs from the state, federal government and EU, the companies will not be able to cope with this.
Of interest to plant manufacturers: Much of the money is needed for DRI plants. So far only one is in operation in Germany at ArcelorMittal Hamburg, where it produces around 600,000 t of DRI a year. thyssenkrupp Steel caused a stir at the beginning of March 2023 when it announced a purchase agreement with the SMS group: thyssenkrupp is investing €1.8 billion in the acquisition of a DRI plant and two melters at the Duisburg site. The plant, with an annual production capacity of around 2.5 million metric tons, is scheduled to be operational in 2026. The acquisition, subsidized by the state of North Rhine-Westphalia, is part of the tkH2Steel green steel strategy, which is the counterpart to Salzgitter's SALCOS program.
In March 2022, Salzgitter awarded the contract for the construction of its direct reduction plant to the Italian plant manufacturer Tenova LOI. The construction forms a third subproject of the SALCOS program called "μDRAL" (micro direct reduction plant). The planned capacity would be 2.1 million t, just below the SMS plant in Duisburg.
If you want to learn more about the topic, visit the SMS group (Hall 1 / E40 - E41 (METEC)) or Themprocess LOI (Hall 4 / A21) (GIFA) between June 12 and 16, 2023 at Messe Düsseldorf. In addition, many other companies on the ecoMetals Trails will present their ideas for a decarbonized metal industry. Let them inspire you!