The plant will be located in Duisburg, Germany, and have a capacity of 2.5m metric tonnes (MT) of directly reduced iron (DRI) and is scheduled for completion by the end of 2026.

thyssenkrupp will be the first steelmaker in the world to combine a 100% hydrogen capable direct reduction plant with innovative melters, delivered by SMS, according to a statement

Bernhard Osburg, CEO of thyssenkrupp Steel, said, “It is a historic day for thyssenkrupp Steel and good news for industrial climate change mitigation – since, just by itself, our first direct reduction plant will enable us to avoid emitting 3.5 million MT of carbon dioxide (CO2).

“We are pleased that we have SMS as our partner for the technological leap into hydrogen-based steel production. Together, we intend to demonstrate that an innovative and sustainable transformation of the steel industry is possible In Germany and Europe.”

The two melters will be positioned next to the direct reduction plant which allows the solid input stock produced there to be converted into molten iron immediately.

SMS will deliver the melters, slag granulation and other auxiliary equipment such as water recycling. It is also building the plant on an EPC basis, providing responsibility for the engineering, procurement and construction of the plant.

The cooperation also sends a strong message for North Rhine-Westphalia as an industrial centre. In building the direct reduction plant, the two companies are forming a partnership for innovation and efficient industrial climate change mitigation.

thyssenkrupp claims it is currently responsible for 2.5% of Germany’s CO2 emissions.

Hendrik Wüst, Minister President of North Rhine-Westphalia, said, “The contract award to the Düsseldorf-based SMS group represents a great decision for the climate, for thyssenkrupp and for the location of North Rhine-Westphalia.

“We are supporting this project with conviction and to the tune of up to €700m, thus contributing to the preservation and transformation of an important value chain for the entire economy in the state.”

Read more: North Rhine-Westphalia, Germany, to become a hydrogen model region with €860m funding

Hydrogen-based processes in direct reduction plants offer a significant basis for manufacturing carbon-neutral steel in the future. thyssenkrupp is already planning to avoid as much as 6m MT of CO2 by 2030. The transformation to carbon-neutral production should be completed by 2045 at the latest.

Martina Merz, CEO of thyssenkrupp, said, “We must act now and invest now if we want to achieve our climate targets and secure the future of this industrial location.”