Hydrogen instead of coal: The start of a production plant for green steel is delayed

Duisburg. Germany's largest steel company Thyssenkrupp Steel Europe (TKSE) will most likely only put its billion-dollar production plant for climate-friendly steel into operation two years late. “The commissioning of the direct reduction plant is planned for 2029 instead of 2027 as originally planned,” says a document from the EU Commission, which was first reported by “Politico”.

A TKSE spokesperson confirmed the delay. “The delayed completion essentially results from the engineering phase of the project,” said the company spokesman. For a project of this size, adjustments to the execution process and schedule are not unusual. “We assume that the ramp-up of the plant will be closely based on the development of the market and the availability of hydrogen.”

The steel company's hydrogen project costs a total of around three billion euros. Up to two billion euros in funding comes from the state - two thirds from the federal government and one third from the state of North Rhine-Westphalia. Construction work began at the beginning of 2024. It is a so-called direct reduction plant, which is a modern alternative to the classic blast furnace. Instead of coal, hydrogen is used, which is produced with the help of renewable energies.

The steel subsidiary of the industrial group Thyssenkrupp recently reported on changed funding requirements that provide for a more flexible use of hydrogen: During production, more natural gas can initially be added to the hydrogen than permitted. In principle, the addition of natural gas contradicts the concept of green steel, but it is considered appropriate for a transitional period. According to the company, CO2 emissions are more than halved when operating on natural gas compared to the conventional blast furnace route.

Politicians and parts of German industry have high hopes for green steel in order to make progress in climate protection. But the development of the hydrogen market is falling short of expectations, as Thyssenkrupp Steel reports. Generation capacities, transport lines and import routes are not yet available to the extent required. At the same time, green hydrogen is significantly more expensive than originally assumed and is not yet available at competitive conditions. This is hindering progress in this type of more sustainable steel production.

When asked about the current status of the steel project, the TKSE company spokesman said construction work is progressing. “The tower of the direct reduction plant is currently being built, the foundations for the two melters are being built and several switching houses have been completed.”