The signed Memorandum of Understanding (MoU) between the companies seeks to decarbonise the steelmaking process with plans to replace coal with wind power and green hydrogen as the German steelmaker’s primary energy sources.
RWE and ArcelorMittal also intent on working together to explore areas where electrolysis plants can be built to supply the steel production sites in Bremen and Eisenhüttenstadt, starting with a 70MW pilot plant by 2026.
The companies have said they are assessing options for joint participation tenders for offshore wind farm sites in the North Sea. H2 View understands the companies will seek to supply ArcelorMittal’s sites in Bremen, Hamburg, Eisenhüttenstadt, and Duisburg with the clean alternatives.
Reiner Blaschek, CEO of ArcelorMittal Germany, explained, “ArcelorMittal Germany is embarking on a radical transition to ensure we reach our carbon dioxide emissions reduction targets, meaning that the energy used to make steel will need to be clean energy.
“The partnership we have announced with RWE today is significant for a number of reasons: it will provide us with the renewable, affordable electricity and green hydrogen that we need to produce low-emissions steel while remaining competitive in a global market. It also offers vital security in the supply chain, by integrating the supply of energy and hydrogen into our business.
“We are looking forward to working with RWE on this highly important project and benefiting from their experience and know-how, as we continue to lead the industry in the decarbonisation of steelmaking in Germany and beyond.”
In 2021, ArcelorMitta announced plans to make its Sestao plant in Spain one of the world’s first full-scale zero carbon-emissions steel plants using green hydrogen.
Previously, the steel giant made public commitments to integrate hydrogen into its processes as part of the company’s goal of reducing its carbon emissions by 30% by 2030 and achieve Net Zero by 2050.
Sven Utermöhlem, CEO of Offshore Wind for RWE Renewables, said, “Electricity from renewable energies and green hydrogen must become the hallmark of industrial production in Germany.
“Industry needs both in large quantities as soon as possible in order to achieve its climate targets. That is why we are planning one of the most ambitious expansion projects for offshore wind farms and electrolysers in Germany, together with ArcelorMittal.
“If the regulatory framework is right, we want to be successful together in the bidding for offshore areas. ArcelorMittal is an excellent partner to expand our industry cooperation and thus give real impetus to decarbonisation projects in Germany.”
The announcement comes after a 2021 Industry Tracker report found that the European steel industry has between 12 and 35% of its carbon budget remaining and must rapidly shift business models to reach Net Zero.
The Steeling for Net Zero report provided an assessment of 10 of the largest European steel companies, that account for 68% of primary steel production in Europe, including ArcelorMittal.
Commenting on the report, Carole Ferguson, Managing Director of Industry Tracker, said, “Steel is used across many products and sectors that are integral to the way we live. However, with a large carbon footprint and a growing emissions profile, steel remains a problem child in the path to Net Zero.
“With momentum starting to build for new technologies, particularly green hydrogen, steel companies have the opportunity to break their current capital intensive business model.
“I am optimistic that with public support, cross-sector partnerships, and investment capital seeking to solve the climate crisis, steel companies have the potential to lead the way in the transition and drive the green hydrogen economy.
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