H2 View understands the Spanish Government notified the Commission of the measure to decarbonise ArcelorMittal’s steel production operation in Gijón, Spain, which currently uses two blast furnaces producing liquid hot metal from a mixture of iron ore, coke, and limestone.
The aid, which is set to take the form of a direct grant, is planned to support the construction of a renewable hydrogen-based direct reduced iron (DRI) plant. Together with a new electric arc furnace, the plant will substitute the current blast furnace.
H2 View understands, natural gas will initially be used in the gas mix, ahead of gradual phasing out of the steel production process. It is intended that the plant will eventually operate using renewable hydrogen with syngas produced from waste and metallurgical gases.
Envisioned to start operating by the end of 2025, the plant is expected to produce 2.3 million tonnes of low-carbon DRI per year, avoiding the release of 70.9 million tonnes of carbon dioxide.
Additionally, ArcelorMittal has committed to share the technical know-how gained through the project with other European steel producers.
Originally announced in 2021, the steel giant’s plans were set to see an investment of €1bn.
The Commission funding comes under EU State aid rules enabling member states to support the development of certain economic activities subject to conditions. It is hoped the ArcelorMittal project will contribute to the EU Hydrogen Strategy and European Green Deal targets of reducing dependence of Russian fossil fuels and fast tracking the green transition.
“The €460m measure enables Spain to support ArcelorMittal’s plan to decarbonise its steel production processes,” said Margrethe Vestager, Executive Vice-President in charges of competition policy. “It will contribute to the greening of a very energy-intensive sector, in line with our commitment to transition to a Net Zero economy. At the same times, the measure ensures that competition in the Single Market is not unduly distorted.”
Spain selected the ArcelorMittal project for an open call in 2021 to form part of the Importance Projects of Common European Interest (IPCEI) on hydrogen technologies and systems.
At the time of the project announcement in July 2021, Aditya Mittal, CEO of ArcelorMittal, commented, “This is a project that will require the support of many different partners to succeed; the plan hinges on the supply of affordable, mass-scale hydrogen, access to sustainable finance and a supportive legal framework that allows us to be competitive globally.”
In the past month, the European Commission has unveiled plans to subsidise the cost of renewable hydrogen with a ‘fixed premium’ per kg, and announced its proposed regulation for the definition of renewable hydrogen.
Read more: European Commission plans to subside green hydrogen production
Read more: European Commission proposes regulation for renewable hydrogen definition
Newsletters
At H2 View, we know just how much hydrogen news there is to keep on top of. That’s exactly why we’ve launched a brand new daily newsletter that will send you the top five stories every day, straight to your inbox.
Don’t forget we also have our weekly newsletter which includes a round-up of the past seven days’ hydrogen highlights, including not only news but also interviews, features and analysis.
Sign up for our newsletters.