British energy company bp and German multinational conglomerate thyssenkrupp have signed a memorandum of understanding to work together to advance the decarbonisation of steel production.
They will explore supply solutions for both blue and green hydrogen, as well as electricity form solar and wind farms through the use of power purchase agreements (PPAs).
thyssenkrupp Steel accounts for 2.5% of carbon emissions in Germany, mainly at the Duisburg site where the main emitters, the blast furnaces, are operated.
The company intends to make steel production climate-neutral by 2045 by replacing the coal-fired blast furnaces with direct reduction plants where iron ore is reduced with low carbon hydrogen.
William Lin, bp’s executive vice president regions, cities and solutions said: “The steel and energy industries have of course long been closely linked. We provide fuel and feedstock for steel production while our platforms, pipelines and turbine towers are made from steel.
“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. As part of our strategy to provide a range of decarbonisation solutions to corporates, bp is already investing in and working to develop a portfolio of industrial-scale hydrogen projects in Germany, the Netherlands, Spain, the UK and Australia. With our aligned ambitions and complementary investments, thyssenkrupp Steel and bp can together help this hard-to-abate sector decarbonise faster.”
thyssenkrupp Steel currently produces 11 million tonnes of crude steel per year and is targeting the production of 400,000 tonnes of CO2-reduced steel by 2025.
Dr. Arnd Köfler, Chief Technology Officer at thyssenkrupp Steel added: “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.
“The MoU is an important milestone for us to set the course with bp for a reliable supply of energy in the future.”
The companies also plan to jointly advocate for policies that will support the development of low carbon hydrogen and the growth of green steel in Europe.