Developer GravitHy closes Eur60 mil funding round for French ‘green’ steel plant
Hydrogen-based, direct-reduced iron project developer GravitHy has closed a Eur60 million funding round for its French “green” steel plant at Fos-Sur-Mer, the company said March 26, adding that it is targeting a final investment decision on the project in 2026.
The 2 million mt/year hot briquetted iron plant in Fos-Sur-Mer in the south of the country is set to start commercial production in 2029, after a commissioning phase and progressive pre-commercial ramp-up. The project has an overall estimated price tag of Eur2.2 billion.
GravitHy is also building an electrolyzer at the site, with a capacity of approximately 750 MW, to produce low-carbon hydrogen for the plant.
The latest funding round — which brought in a series of new investors, as well as additional investment from existing shareholders Engie New Ventures and InnoEnergy — will help the company to secure key contracts, as well as completing engineering work and obtaining permits, the company said.
“We are thrilled by the confidence our diverse investors have shown in GravitHy,” Chief Executive Jose Noldin said. “Collaboration is key to disrupting the steel value chain, and we are proud to welcome these incredible partners who share our vision, values, and development goals.”
The steel industry contributes around 8% of global carbon emissions and requires new technology, redesigned processes, and new infrastructure to decarbonize, industry sources say.
Platts assessed Northwest European hot-rolled coil at Eur700/mt ex-works Ruhr on March 25, down Eur5/mt on the day.
High-grade iron ore, DRI/HBI should be on EU critical raw materials list: GravitHy CEO
High-grade iron ore, ultra-low CO2 direct-reduced iron and its processed form, hot-briquetted iron, should be part of the EU’s Critical Raw Materials Act, José Noldin, CEO of hydrogen-based DRI project developer GravitHy, said March 25.
“If a certain raw material is included in the CRMA then you have access to funding, which creates a stronger value chain,” Noldin said at the bi-annual members meeting of the International Iron Metallics Association in San Sebastian, Spain.
The European Commission “seems open to it,” he added.
Noldin told Platts on the sidelines of the event that GravitHy is actively pushing for this on European level but that there is no timeline yet on when and if the EC would make a decision.
The EC did not respond to a request for comment when asked by Platts on March 25.
Hurdles on path to decarbonization
According to Noldin, Europe would finally “walk the talk” in implementing steel decarbonization, but he said more funding and legislation are needed to achieve this successfully.
Historical barriers for the adoption of hydrogen-based DRI/HBI production remain and the industry should move away from integrated steelmaking, “decoupling the value chain of iron and steel,” Noldin said.
Instead of bringing hydrogen to steel production, bringing HBI production to where the energy is would be a more realistic approach amid the lack of sufficient infrastructure for hydrogen in Europe, he added.
GravitHy is building an HBI plant at Fos-sur-Mer, France. It will process pellets, supplied by Brazil’s Rio Tinto, into HBI used by electric arc furnaces to produce low-emission steel. The plant will be operational from 2028 and produce 2 million mt/y of HBI, Noldin said.
Platts assessed HBI imports at $350/mt CFR Mediterranean March 24, up $5/mt on the day. Platts is part of S&P Global Commodity Insights.
The EC released its list of 47 critical raw material projects across 13 EU member states classified as strategic projects under the EU on March 25, but none of them were ferrous metals-based projects.
The European CRMA entered into force in May 2024. It aims to ensure the secure and sustainable supply of critical raw materials for Europe’s industry and significantly lower the EU’s dependency on imports from third countries.
Europe’s steelmakers should give up ironmaking: GravitHy’s Noldin
Steelmakers in Europe should give up ironmaking to specialist companies and focus on their core competency of steelmaking and value addition, says José Noldin, chief executive of prospective France-based low-emission ironmaker GravitHy.
The firm aims to commission its plant in Fos-sur-Mer by 2028 and will have its own captive hydrogen production. The location was chosen for its access to land, water and especially electricity. France has a stable and reliable grid system which is fed by a clean, low-CO2 energy mix, and GravitHy will be connected to the grid, Noldin said at Monday’s Fastmarkets International Iron Ore & Green Steel Summit 2024 conference in Vienna attended by Kallanish.
The firm is looking at other locations for further plants. One of these is Finland but the majority are outside of Europe due to more favourable conditions for producing green iron, he noted. “We believe iron production can stay in Europe but it doesn’t need to be only in Europe,” Noldin said.
The main enablers needed for decarbonisation to take place are access to different financial instruments for capital and operational expenditure, and the need for government to create demand for green steel. The automotive sector has started buying green steel already, but public procurement is also necessary to create sufficient demand, he noted. Moreover, clear green steel standards are needed to avoid greenwashing.
Recent years have seen lots of hydrogen project announcements based on enthusiasm, Noldin pointed out. “There was lots of hype … You needed to be seen doing something with hydrogen.” However, the fundamentals have not been there.
“The market is coming to its senses. For good projects, the money is there. It’s a question of risk profile for the different investors … and how early or mature each one would like to see the different opportunities … There is a genuine interest,” he added.
In terms of markets to sell green HBI to, “we need to generate a snowball effect,” Noldin said. When one market becomes really committed, other customers will follow, the ceo noted, adding that “a combination of carrot and stick” is necessary. The EU is a good location for this as the Green Deal enshrines into law the need to deliver green products.
Europe alone is likely to see 15-30 million tonnes/year of merchant metallics demand by 2035.
Ideally, there should be a sufficient number of merchant metallics producers to create security of supply and liquidity in the market, Noldin said, describing this as his “dream”. The market is likely to be a combination of spot and long-term contract business.
“European iron and steel can be competitive but it’s a competitive based on sustainability. We need to look beyond pricing and cost criteria. Transparency is key. Traceability is key. Circularity is key,” the ceo said. “We are not competing for the same applications” as the cheap steel from other countries, he concluded.
Adam Smith Poland
