Tag: belgium

Earlier this week, numerous reports emerged in Belgium media that ArcelorMittal was planning to only invest in electric-arc furnaces (EAFs) at the site.

“We’ve not said that [the DRI investment is cancelled]. Although there have been have been some reports in the Belgian media [on November 19]… nothing has changed. We’ve been saying all year we are working on the engineering for our European decarbonization projects and that remains the case – no final decisions have been made,” the spokesperson told Fastmarkets.

In September 2021, ArcelorMittal has signed a letter of intent with the Belgian and Flemish governments to support it’s €1.1 ($1.2) billion investment in
decarbonisation at the Ghent site.

The company also announced plans to build a 2.5 million tonne DRI plant and two electric-arc furnaces in Ghent and said the new facilities would operate in parallel with a state-of-the-art blast furnace (BF) that is set to use waste wood and plastics as an alternative to fossil carbon.

Currently, ArcelorMittal Ghent operates BFs with a combined capacity of more than 4 million tpy of pig iron per year, along with a 5 million tpy basic-oxygen furnace (BOF).

The site produces hot-rolled, cold-rolled and galvanized coil.

The company’s plan to switch to DRI/EAF production follows the common approach to decarbonization being taken by Europe’s flat steel producers – to replace BF-BOF capacities with EAFs and hydrogen-fuelled DRI modules.

Possible decoupling of iron and steelmaking in Europe

More than 50 million tonnes of new green steelmaking capacity – using just EAFs or  EAFs and DRI – is expected to come online in Europe in 2025-2030.

Moving to THE DRI/EAF production route, however, raises concerns in the European market, however, due to energy-intensive nature of DRIs and the lack of energy infrastructure in Europe to support such a transition.

Europe needs to build out its production of fossil-free electricity to produce green hydrogen to feed future DRI capacities. But the volumes needed for large-scale electrolysis to produce green hydrogen are significant – requiring an additional 400 terawatt hours (TWh) of CO2-free electricity in 2050 – and about seven times the amount of energy purchased by the sector currently, according to estimates from the European steel association, Eurofer.

From 2025 to 2030 renewable electrolyser capacity within the EU is expected to rise to 40 GW, producing up to 10 million tonnes of renewable hydrogen, according to the European Commission.

Using hydrogen with existing DRI modules in Europe is currently too expensive to be competitive, Fastmarkets understands, with hydrogen prices currently seen at around €5-8 per kg. The price of hydrogen needs to be “around €2.5-3.0 per kg to make it commercially viable for steelmaking,” a steel producer in Northern Europe told Fastmarkets.

Around 140,000-150,000 tonnes of hydrogen per year would be required to fuel one 2 million tpy DRI module, sources said.

Some market participants have said that it would, therefore, make sense to split iron and steelmaking in Europe and to import hot-briquetted iron (HBI) and DRI from abroad, such as the Middle East-North Africa region, where HBI/DRI production is more commercially viable.

“Shifting energy-intensive iron production to a resource-rich region would allow Europe to produce green steel with imported HBI/DRI,” an energy producer in Europe said.

Europe is already importing significant tonnages of HBI, with import volumes in 2023 reaching  2.61 million tonnes, according to Global Trade Tracker (GTT).