Japanese company Mitsubishi Heavy Industries will soon complete construction in Austria of the world’s largest steel plant capable of achieving zero carbon dioxide emissions.
Mitsubishi Heavy is building a pilot plant at the Austrian steel company Voestalpine through its UK division. Trial operation is scheduled to begin in 2021.
The plant will use hydrogen instead of coal in the iron ore recovery process. The new generation equipment will produce 250,000 tons of steel products per year.
According to the International Energy Agency, the global steel industry produced about 2 billion tonnes of CO2 in 2018, double the number in 2000. The share of the steel sector among all industries increased by 5 percentage points to 25%.
Reducing iron ore emissions accounts for a significant portion of CO2 emissions from steel production. Japanese steelmakers, including Nippon Steel, are developing hydrogen-consuming reduction processes based on traditional blast furnace designs.
Mitsubishi Heavy uses a process called Direct Reduced Iron, or DRI. New blast furnaces require a trillion yen investment (1 trillion yen equals $ 9.6 billion). Although DRI’s equipment produces less steel, the investment in blast furnaces is estimated at less than half.
In order to achieve the same level of cost competitiveness as blast furnaces, DRI will be key to producing cheap hydrogen. The market cost for hydrogen is now around 100 yen per cubic meter. meter, estimates the Ministry of Economy, Trade and Industry.
The government aims to reduce hydrogen costs to 30 yen per normal cubic meter. meters by 2030, mainly due to mass production.
But for DRI to be feasible in the steel industry, “the level must be below 10 yen,” said an executive at a major steel producer.
Germany’s SMS, the world’s leading supplier of steelmaking equipment, is developing a hydrogen-fired steelmaking process with runner-up Danieli of Italy. Among the steel producers, Luxembourg-based ArcelorMittal plans to build a pilot hydrogen steel plant in Germany in 2021. Competitors such as Germany’s Thyssenkrupp and Salzgitter are investing in DRI.
Mitsubishi Heavy, the third largest supplier of steelmaking equipment in the world, also ensures the security of the hydrogen supply chain. In October, the company bought a stake in a Norwegian hydrogen equipment manufacturer.
Elsewhere Mitsubishi Heavy decided to acquire stakes in hydrogen producers in places like Australia. The group will oversee the supply of hydrogen, as well as the construction and design of equipment.
In July, the European Union announced an initiative to invest 470 billion euros ($ 572 billion) in hydrogen by 2050. The hydrogen steel plants are expected to receive support. The number of hydrogen businesses is growing in Europe. Mitsubishi Heavy will meet the steel industry’s hydrogen demand to offset weaker growth prospects for thermal power plant equipment.