Thyssenkrupp revises timeline for Duisburg DRI project

Thyssenkrupp Steel Europe has postponed the start of operations at its tkH2Steel direct reduced iron (DRI) plant in Duisburg to 2029, two years later than originally planned, according to an amended state aid decision by the European Commission.

The project will replace one of the company's coal-based blast furnaces with a hydrogen-ready direct reduction plant with annual capacity of 2.5 mln tons of DRI and two melting units with combined capacity of 2.3 mln tons of hot metal.

The European Commission said the delay was caused by construction challenges related to the innovative nature of the project. The revised timeline shifts the start of operations from 2027 to 2029.

The amendments also provide Thyssenkrupp with greater flexibility in the use of hydrogen and natural gas. Hydrogen use will be phased in more gradually and at a lower level than originally planned, while natural gas use will initially be higher, reflecting increased costs and technical requirements identified during the project's development.

The Commission said higher projected costs for low-carbon hydrogen and electricity, together with lower expected prices for carbon allowances, had affected the project's economic viability under its original conditions.

The maximum state aid for the project remains unchanged at EUR 2 bln (USD 2.2 bln). Under the amended measure, the full amount will be provided as a direct grant, replacing the previous structure that included a EUR 550 mln (USD 611 mln) direct grant and up to EUR 1.45 bln (USD 1.6 bln) in conditional payments.

The tkH2Steel project forms part of Thyssenkrupp Steel Europe's longer-term transition towards climate-neutral steel production.

Under the original project plans, the new production route was expected to reduce greenhouse gas emissions by around 1.9 mln tons of CO2 equivalent annually when operating on natural gas, with higher reductions expected as hydrogen replaces natural gas. The revised plan maintains the project's objective of gradually reducing natural gas use, while allowing greater flexibility to respond to developments in hydrogen and carbon prices.

Thyssenkrupp Steel is Germany's largest flat steel producer, serving the automotive, machinery, packaging and household appliance sectors. The company operates an integrated steelmaking network centered in Duisburg and produces hot-rolled, cold-rolled and coated flat steel, electrical steel and tailored automotive blanks.