The Joint Development Agreement (JDA) was signed by eleven parties in total, including Hydrom, Oman’s national green hydrogen orchestrator; OQ, Oman’s global integrated energy group; leading Dutch steelmaker Tata Steel Nederland; German logistics and transportation company Hamburger Hafen und Logistik AG; and hydrogen transport network Hynetwork.
The agreement paves the way for the large-scale import of liquid hydrogen into Europe. It was signed during the state visit of the Sultan of Oman to the Netherlands. Major industrial participants, including Tata Steel Nederland, the Port of Amsterdam and Ecolog are key enablers of this new trade corridor.
The agreement outlines several critical elements essential to the corridor’s development, including:
- plans to establish a centralized facility for liquefaction, storage and export at the Port of Duqm — one of the key hubs for green hydrogen production in Oman.
- pricing and delivery arrangements for liquid hydrogen to offtakers in the greater Amsterdam region, as well as in other parts of the Netherlands and Germany, with EnBW serving as the aggregator.
- coordinated development of dedicated infrastructure along the corridor: This includes export and import terminals at the ports of Duqm, Amsterdam and Duisburg (Germany), along with multiple hydrogen distribution channels — both gaseous and liquid — such as gas pipeline networks, rail links and barge transport utilizing the Netherlands’ extensive canal system.
The first large-scale deliveries of green hydrogen to Europe are scheduled to commence “by 2029,” according to a release by Tata Steel Nederland on April 16.
“This agreement represents a landmark moment in our commitment to clean energy,” Sophie Hermans, the Dutch Minister for Climate and Green Growth, said in the release. “By linking Omani green hydrogen with Europe’s energy needs, we are advancing our shared climate goals and creating a sustainable energy pathway.”
Clean, affordable energy at the core of EU’s green transition
The energy-intensive nature of steel production leads to high electricity consumption. With the switch to electric-arc furnaces (EAFs), it would be expected that the sector’s electricity consumption would only increase.
Currently, EU steelmaking is mainly based around blast furnace-basic oxygen furnace (BF-BOF) production, which is less energy-intensive than the EAF-route — electricity costs account for less than 4% of the costs in the BF-BOF production route. For EAF mills, electricity can be around 20% of the total.
But the new green steel capacities in Europe will be mostly represented by EAFs and direct-reduced iron (DRI) modules, with more than 50 million tonnes of new steelmaking capacity expected to come online in 2026-2027, according to Fastmarkets estimates.
Direct and indirect electrification methods, such as hydrogen produced from electrolysis, would be the most efficient pathway toward decarbonization, but this would also increase the energy costs for the steel industry.
Green hydrogen — hydrogen that is produced with renewable energy — is a vital element required if the DRI-EAF route is to become a net-zero emitter.
But producing green hydrogen requires significant investment and massive increases in renewable energy. Steelmakers said they would require governmental support to ease the burden of the capital expenditure necessary for such projects.
Sources in the European steel market familiar with the matter agreed that using hydrogen to feed DRI plants is currently too expensive to be competitive. Hydrogen prices in Europe are currently reported by sources around €5-8 per kg.
The price of hydrogen needs to be “around €2.50-3.00 per kg to make it commercially viable for steelmaking,” a steel producer in Northern Europe told Fastmarkets.
The Middle East and North Africa (MENA) region has the potential to produce and export hydrogen at competitive prices due to low energy costs and access to ports.
“The price of hydrogen in the EU is about $7-8 per tonne, while in the Middle East it can be around $2 per tonne, or even less” a trading source in the MENA region told Fastmarkets.
The MENA region has an announced capacity of 242 GW of green hydrogen, according to the Institute of Energy Economic and Financial Analysis (IEEFA).
These green hydrogen projects are progressing slowly and are mainly export-focused, but significant opportunities exist to redirect them toward domestic use, according to IEEFA.
Tata Steel to benefit from the agreement
According to Fastmarkets’ data, Tata Steel currently has the capacitgy to produce 7.5 million tonnes per year of crude steel at its IJmuiden site in the Netherlands, and it produces hot-rolled, cold-rolled, hot-dipped galvanized and pre-painted coil, along with tin-plated products.
By 2030, the company plans to replace its largest blast furnace, BF7, with a DRI furnace and an EAF. The company’s BF6 and its other coke-making plants will be closed, resulting in an 80% reduction in CO2 emissions from 2030 to 2045, by which time the company will be “CO2 neutral.”
Tata Steel Nederland is planning to adopt a hydrogen route for its steelworks in IJmuiden, so access to green hydrogen deliveries from Oman will be beneficial for the producer.
“In our role as a large potential buyer, we can contribute to the development of a sustainable economy based on green hydrogen in our region. In this way, we not only make our own production process more sustainable, but we also help to build a new ecosystem together with other companies,” Hans van den Berg, Tata Steel Nederland’s chief executive officer, said in the April 16 release.
