Steelmaker ArcelorMittal signs MoU with the Spanish Government supporting €1B investment in decarbonization technologies; DRI and EAF
ArcelorMittal signed a memorandum of understanding (MoU) with the Spanish Government that will see a €1-billion investment in decarbonization technologies at ArcelorMittal Asturias’ plant in Gijón. The investments will reduce CO2 emissions at ArcelorMittal’s Spanish operations by up to 4.8 million tonnes, which represents approximately 50% of emissions, within the next five years.
At the heart of the plan is a 2.3 million-tonne green-hydrogen direct reduced iron (DRI) unit, complemented by a 1.1 million-tonne hybrid electric arc furnace (EAF). (Earlier post.) This starts the transition of the Gijón plant away from the blast furnace-basic oxygen furnace steelmaking production route to the DRI-EAF production route, which carries a significantly lower carbon footprint. The new DRI—which will be the first of its kind in Spain—and EAF will be in production before the end of 2025.
To maximize the emissions reduction potential, ultimately green hydrogen will be used to reduce the iron ore in the DRI, with the EAF powered by renewable electricity. Should green hydrogen not be available at affordable rates by the end of 2025, natural gas would be used to power the DRI furnace. This would still result in a significant reduction in CO2 emissions, of 4 million tonnes, approximately 45%.
The support of the national and regional governments in this project is crucial as it will enable ArcelorMittal to have access to green hydrogen supplied through a consortium of companies that will cooperate in the construction of the infrastructure required in order to produce hydrogen in the Iberian Peninsula using solar‑powered electrolysis and to transport it directly through a network of pipelines. The initiative involves the construction of multiple large-scale solar farms, with hydrogen produced in situ and with the corresponding impact in terms of employment.The Gijón DRI will also feed the company’s Sestao plant, situated approximately 250km from Gijón, where production is already entirely from the electric arc furnace route. This means that by 2025 ArcelorMittal Sestao will produce 1.6 million tonnes of steel and be the world’s first full-scale steel plant to achieve zero carbon-emissions.
The Government of Spain will promote reforms and investments to support the development and growth of a strong, more competitive and sustainable industrial sector, as well as endeavoring to provide maximum financial support for the project, in line with Spanish legislation and European Union regulations.
Given the significant cost associated with the transition, in terms of both capex and opex, it is ArcelorMittal’s expectation this support will cover at least half of the additional cost to enable its operations to remain competitive as it accelerates its decarbonization program.
ArcelorMittal Europe has a target to reduce CO2 emissions by 30% by 2030, and an ambition to be net-zero by 2050. The company is pursuing two pathways to achieve this: Innovative DRI and Smart Carbon.
ArcelorMittal Spain’s operations are already contributing to the reduction of CO2 emissions from the company’s steelmaking operations. Earlier this year, ArcelorMittal Asturias completed its project to capture hydrogen-rich coke oven gas and re-inject it into the blast furnace, replacing some of the coke used in the blast furnace. Deploying this innovative technology will result in a reduction in CO2 emissions of 125,000 tonnes a year.
These CO2 savings have already generated XCarb green steel certificates, which were launched by the company in March 2021, allowing ArcelorMittal customers to report a reduction in their Scope 3 CO2 emissions.