German steelmaker Salzgitter has launched a tender for renewable and low-carbon hydrogen, as it seeks to eventually use 150,000 t/yr for direct reduced iron (DRI) production at its Salzgitter site.
The firm aims to bring a 100MW electrolysis plant online on its own premises by 2026, which could provide 9,000 t/yr of renewable hydrogen. But the remainder will have to come from third parties and could at least be partly contracted through the tender, although Salzgitter has already struck deals for renewable hydrogen supply from utilities Uniper and EWE.
Salzgitter aims to take the first hydrogen from external suppliers from 2027, but potential suppliers can also participate if they can only deliver at a later date. The firm expects its hydrogen demand to ramp up over time and it is too early to say when it will fully run its planned DRI plant on hydrogen, the company told Argus.
The plant's set up will allow for a mix of natural gas and hydrogen to be used and the respective proportions could be adjusted flexibly depending on availability of hydrogen supply, Salzgitter said. Using natural gas will already unlock substantial emissions savings compared with existing processes, the firm said.
Suppliers can offer renewable hydrogen that complies with the definition in the EU's delegated act which entered into force last July. Other hydrogen, such as supply made from natural gas with carbon capture and utilisation or storage (CCUS), would have to comply with the EU's requirement that it reduces life-cycle greenhouse gas emissions by at least 70pc compared with the comparative fossil value of 94g of CO2 equivalent/MJ.
The share of each supply source that the company aims to contract will depend on availability and costs, Salzgitter said.
Potential suppliers have to register their interest via Salzgitter's website until 9 July.
Salzgitter previously said that it aims to achieve steel production that is "almost emissions-free" by 2033. Germany is supporting the plans with a €1bn grant that received approval from the European Commission in 2022.
But the firm said its plans also hinge crucially on a connection to Germany's planned hydrogen core network. Berlin has advanced plans for setting up the grid and last week received EU approval for its financing plans. But the exact design and completion timeline has yet to be finalised.
Fellow steelmakers Thyssenkrupp and SHS earlier this year also launched tenders for hydrogen supply to decarbonise their operations.
