FRANKFURT, Sept 7 (Reuters) - ArcelorMittal has
received a German state funding pledge for half the 110 million
euros ($131 million) it plans to invest in a demonstration steel
plant that will use hydrogen produced with renewable
Environment Minister Svenja Schultze said Berlin would pay
55 million euros -- subject to EU approval -- for the direct
reduced iron (DRI) plant that will use green hydrogen to reduce
iron ore in a CO2-free steelmaking process, ArcelorMittal said
in a statement on Tuesday.
The company aims to produce "green" steel from 2025 onwards,
obtaining it from clean DRI derived from a yet-to-be built 50
megawatt electrolyser, and melted with steel scrap in an
electric arc furnace, which itself will be fueled by green
Uwe Braun, CEO of ArcelorMittal Hamburg, said the plant
would enable his company to produce 100,000 tonnes of DRI for
steelmaking with green hydrogen by 2025.
Braun said the partial funding from the German government
was helpful for the plan. But he also said that the European
Commission, tasked to make sure that state money does not
distort competition, had to give its approval to allow
ArcelorMittal to put "words into deeds."
Currently, ArcelorMittal produces DRI with so-called grey
hydrogen, using natural gas.
Hydrogen is considered green when it is produced from
renewable power obtained from wind or solar energy and run
through an electrolyser.
The port city of Hamburg is building up a hydrogen cluster
that ties in a raft of local consumer, energy and manufacturing
ArcelorMittal wants to produce one million tonnes of
carbon-neutral steel per year in Hamburg by 2030 to save 800,000
tonnes of CO2 each year.
Its plan for Hamburg is embedded in its strategy to achieve
carbon-free output at all of its four German plants - in Bremen,
Duisburg and Eisenhuettenstadt as well as Hamburg - alongside
projects in other countries.
"The government will not leave the steel industry alone in
its transformation," said Schulze. "If the companies invest in
carbon-neutral activities and products like green steel now,
they will survive in the marketplace of the future and their
jobs will be safe."
($1 = 0.8425 euros)
(Reporting by Vera Eckert; Editing by Mark Potter and Jane