The European Commission has approved a €128m Swedish measure to support SSAB in decarbonising its steel production using renewable hydrogen.
The state aid will take the form of a direct grant and support the accelerated transition to an electric steel mill through the installation of an electric arc furnace (EAF), equipment for secondary metallurgy and a caster.
The EAF will operate using steel scrap and direct reduced iron (DRI) produced using renewable hydrogen. The electric steel mill will have a capacity of 2.5 million tonnes of green slabs per year.
The measure, under the Just Transition Fund, will contribute to the achievement of the European Green Deal and the Green Deal Industrial Plan targets, while also helping to end dependence on Russian fossil fuels and accelerate the green transition, in line with the REPowerEU Plan.
It will support SSAB’s project to transition from the current coal-based steel production process in Luleå to a ‘nearly zero-emission system’, and help develop SSAB Zero using recycled steel. It wants to bring fossil-free steel to market by 2026 and produce it at all its sites by around 2030.
Margrethe Vestager, Executive Vice-President in charge of competition policy, said the funding enables SSAB to accelerate its switch to electrified steelmaking at its steel plant in the Norrbotten region. “This will contribute to the greening of the steel value chain, in line with the EU’s target of climate neutrality by 2050,” she said.
The measure will accelerate the project by three years and the new installation aims to start producing green steel from 2029, and allows for significant CO2 emission savings corresponding to three years using fossil fuels.
SSAB has committed to actively share the experience and technical know-how gained through the project with industry and academia.
Near zero emissions steel can be produced from scrap metal today in an EAF but production is limited by scrap availability. BHP expects ore-based steel production to continue to be a vital part of the steelmaking industry.
Integrated steelmaking via blast furnaces is the predominant steelmaking processing route, representing approximately 70% of global production.
“While this route has evolved to become more energy efficient over time, it remains GHG emissions intensive. But because of its widespread use and a young blast furnace fleet in steelmaking regions such as China or India, reducing emissions in the blast furnace processing route where available, must be a part of the roadmap towards decarbonisation,” it notes, in an insights article last week.
The blast furnace is the only one of four pathways that relies on steelmaking coal as an input, while the other three require significant volumes of low or zero GHG emissions electricity, and the gradual replacement of natural gas with hydrogen in the DRI process.
The DRI-EAF route is comparatively mature but lacks flexibility, with only between 3-4% of global seaborne iron ore supply able to meet specifications currently accepted in the market for production of DRI for EAFs.
