voestalpine to invest €1.5 billion to reduce CO2 in steel production
March 22, 2023
The voestalpine Group is investing €1.5 billion to install a new electric arc furnace (EAF) at each of its Linz and Donawitz facilities. Work is scheduled to start in 2024, with commissioning of the two furnaces taking place in 2027. A part of the ‘greentec steel’ plan, this will allow the group to reduce CO2 emissions by up to 30%.
“Greentec steel is Austria’s largest climate protection programme,” stated Herbert Eibensteiner, CEO of voestalpine AG. “It will allow us to save five percent of Austria’s entire annual CO2 emissions from 2027. We need to start this year if we are to meet our target of commissioning the two new electric arc furnaces in Linz and Donawitz in 2027.”
Key requirements for this next major step are sufficient availability of green electricity at competitive prices, and clarification of unresolved funding issues.
Dr Wolfgang Eder, Chairman of the Supervisory Board, added, “The supervisory board has closely examined the voestalpine decarbonisation plan presented by the management board, and unanimously gave it their enthusiastic approval. This investment will secure the future of our two steel production sites in Linz and Donawitz over the long term, and with it the future of our group.“
Compared to the current two-stage LD blast furnace route (Linz-Donawitz process), in which liquid pig iron is produced in the blast furnace before being processed into crude steel in the LD steel plant, an EAF uses green electricity to produce crude steel in a single step. It uses scrap, liquid pig iron, and HBI (hot briquetted iron), with the mix adjusted according to the quality requirements. voestalpine sources most of the HBI it requires from a direct reduction plant in Texas, USA; this plant has been majority-owned by a global steel manufacturer since 2022, with voestalpine holding a 20% stake in the facility.
“With this stake in the plant, last year we signed a long-term supply contract for 420,000 tonnes of HBI annually. Having a secure supply of HBI and scrap as raw materials is a major competitive advantage for voestalpine,” Eibensteiner continued.
The two electric arc furnaces allow voestalpine to produce around 2.5 million tons of CO2-reduced steel from 2027 – 1.6 million tons in Linz and 850,000 tons in Donawitz. From 2030, voestalpine plans to replace another blast furnace at each of the sites in Linz and Donawitz. Financing for the preparatory work is already covered by the approved investment sum, but the core units are still subject to approval.
The Group is already researching into several new processes to achieve its goal of CO2-neutrality by 2050, and investing in pilot projects which explore new pathways in steel production. These include research projects such as the H2FUTURE hydrogen pilot facility at the premises in Linz for manufacturing and using ‘green’ hydrogen on an industrial scale, and the testing facility in Donawitz for CO2-neutral steel production using hydrogen plasma to reduce iron ore. Further research projects are dedicated to the storage and reuse of unavoidable residual emissions.
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