Thyssenkrupp Steel to launch H2 tender this quarter

Germany's Thyssenkrupp Steel is planning to launch a tender for the supply of renewable and low-carbon hydrogen this quarter.

The company published an initial notification regarding the tender plans last month and the process could be launched by early February, Thyssenkrupp Steel's head of hydrogen and green energy Henning Weege told Argus.

The hydrogen will be used to help decarbonise operations at the steelmaker's site in Duisburg, west Germany, where Thyssenkrupp Steel plans to replace a blast furnace with a direct reduced iron plant — for which the German government has earmarked €2bn of support through public funds.

According to the initial tender notification, the steelmaker is looking to contract 104,000t of supply for 2028, equivalent to around 4.1TWh based on hydrogen's higher heating value of 39.39 kWh/kg. This is to increase to 143,000 t/yr for 2029-35 and 151,000 t/yr for 2036-37.

Thyssenkrupp Steel is looking to ink supply contracts for up to 10 years and is open to receive hydrogen made from renewable power as well as from natural gas with carbon capture and utilisation or storage (CCUS).

A large share of the government support to Thyssenkrupp Steel, namely €1.45bn ($1.59bn), is a "conditional payment" that will cover extra costs for buying renewable hydrogen rather than supply made from gas with CCUS. But at least initially, the steelmaker will have to also look at gas-based hydrogen with CCUS, Weege said. This is partly because of the limited quantities of renewable hydrogen expected to be available by the end of this decade, while gas-based hydrogen would also provide a more steady baseload supply. That said, the share of renewable hydrogen could increase steadily in the 2030s as more becomes available.

Hydrogen could be provided by domestic suppliers and from abroad and will have to be delivered via pipeline to Duisburg. Thyssenkrupp Steel is "positive" that a core network linking Germany with the Netherlands, Belgium and Denmark could be operational by the late 2020s, Weege said. This could provide access to supply delivered via ship to ports in neighbouring countries, including as ammonia, which would then need to be cracked back into hydrogen. That said, while several cracking facilities are planned in northwest Europe, it remains to be seen how much capacity will be available by the end of the decade.

By Stefan Krumpelmann

NW Europe direct reduced iron costs $/t