Demand Without Supply

For large-scale steel production, producers are increasingly turning to direct reduction with hydrogen, even if this is tantamount to constructing a completely new steel mill. In Germany, Salzgitter AG is leading the way. The company, which has its steel mill in the city of the same name, is now responsible for about 1 percent of Germany’s total CO₂ emissions. The company expects its production to be completely converted to hydrogen by 2050. “To us, hydrogen is the reagent of choice,” said former CEO Heinz Jörg Fuhrmann. The major challenge is that there still isn’t enough green hydrogen available. So Salzgitter is investing in production on the company’s property. To generate the green electricity it needs, the company has erected seven wind turbines with a total output of 30 megawatts. For the transition, Salzgitter is also turning to natural gas, which scores better than coal on the emissions balance sheet.

Plenty of Demand, No Supply

“From a technical standpoint, steel produced with green hydrogen as a reducing agent would be used on a one-to-one basis,” said Thomas Bleimling, who is in charge of metals procurement in Purchasing at Freudenberg Sealing Technologies. “The company processes more than 20,000 tons of flat steel in Europe every year to make diaphragm accumulators, for example. But Freudenberg primarily uses steel to produce metal cases for Simmerrings. In some cases, the company manufactures the cases internally before they are over-molded with elastomers. Green steel would have an even higher degree of purity,” Bleimling said. But at present, the material is not available for purchase anywhere, not even as samples. “Even in 2030, the share of green steel out of total production will still be very small,” he predicted. “But the auto industry, which purchases about 20 percent of the steel produced in Europe, is driving the trend.” Aside from cost, quality and supply security, the CO₂ emissions per ton of the material count as a criterion for procurement at some vehicle manufacturers. “We are following the trend among suppliers and customers very closely,” Bleimling said. He is optimistic that the steel industry will gradually reposition itself – and even see an upswing due to the technology transition.