BP has signed a memorandum of understanding with Thyssenkrupp aimed at supplying low-carbon hydrogen and renewable power to the German steelmaker.

The two companies have agreed to explore long-term supply options for both blue and green hydrogen—as well as wind and solar power under power-purchase agreements—to enable Thyssenkrupp to cut emissions by replacing blast furnaces with hydrogen-fired direct-reduced iron (DRI) technology.

Thyssenkrupp’s steel operations account for 2.5pc of Germany’s CO₂ emissions, with the main source being the blast furnaces at its Duisburg site, BP says. The company is aiming to produce 400,000t/yr of CO₂-reduced steel by 2025. Its currently produces a total of 11mn t/yr of steel.

“The decarbonisation of the steel industry will require enormous quantities of low-carbon and in the long-term green hydrogen” Kofler, Thyssenkrupp

“Thyssenkrupp Steel has the ambition to make its steel production climate-neutral by 2045 and low-carbon power and hydrogen will play a critical role in achieving that,” says William Lin, BP’s executive vice-president for regions, cities and solutions.

BP is developing a portfolio of industrial-scale hydrogen projects in Germany, the Netherlands, Spain, the UK and Australia. It recently took a 40.5pc stake in the 26GW Asian Renewable Energy Hub project in Western Australia, which will produce green hydrogen.

BP aims to raise annual production of low-carbon hydrogen to at least 500t/yr by 2030, with up to 50pc expected to be from renewables.

In addition to developing supply to Thyssenkrupp’s facilities, the two companies plan to jointly push for policies that will support the development of low-carbon hydrogen infrastructure and the growth of green steel in Europe. 

"The decarbonisation of the steel industry will require enormous quantities of low-carbon and, in the long term, green hydrogen. This will increasingly require the use of electricity from renewable sources. All this can only be achieved through a well-developed hydrogen infrastructure with a supra-regional pipeline network,” says Arnd Kofler, CTO at Thyssenkrupp Steel.

Competition

Competition between energy companies to provide hydrogen for decarbonisation of the steel sector is intensifying. Last month, Germany’s RWE signed an MoU with steel producer Arcelormittal to jointly develop, build and operate offshore windfarms and green hydrogen production capacity to supply Arcelormittal’s German mills.

Separately, a consortium of six companies including French utility Engie and US electrolyser-maker Plug Power earlier this month unveiled plans to develop a €2.2bn ($2.3bn) hydrogen-based DRI plant green at Fos sur Mer, near Marseille in southern France. Spain’s Iberdrola and Swedish startup H2 Green Steel plan to develop a 1GW green hydrogen plant by 2026 using renewable energy supplied by the Spanish energy company. The project will use the hydrogen to produce 2mn t/yr of DRI.

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Author: Stuart Penson