Vale and Green Energy Park partner up to produce low-carbon steel
On the occasion of the 40th edition of the German-Brazilian Economic Meeting in Wolfsburg (Germany), on September 23, a new partnership agreement was presented to key players in the steel industry. These included: the European Steel Association (EUROFER), Hydrogen Europe, and high-ranking representatives of the European Commission and European Parliament.
This new partnership was signed between Vale, one of the world’s largest producers of iron ore and nickel and a major copper producer, and Green Energy Park (GEP), a Germany-based integrated hydrogen company and a molecule’s specialist.
GEP, whose objective is to design, build, and operate hydrogen production infrastructure using ammonia and methanol, already has an ongoing project in Brazil. This territorial anchoring may have facilitated the agreement with Vale, which is headquartered in Brazil, and which has been actively seeking partners to enable the construction of Mega Hubs in the country.
Producing low-carbon steel using hydrogen
The aim of this partnership is to deliver decarbonisation solutions for the global steel sector. Through this partnership, both companies will work on feasibility studies to develop a green hydrogen production facility to supply a future Mega Hub in Brazil, an industrial complex aimed at manufacturing low-carbon steel products.
This joint initiative can provide an open platform for international partnerships in which global steel companies can source and produce hot-briquetted iron (HBI), a low-carbon emission steel pre-material. To do so, Vale will be using renewable hydrogen as the reducing agent.
“This is a win-win partnership for Brazil and Europe”, says Ludmila Nascimento, Director of Energy and Decarbonisation at Vale. “We are leveraging Brazil’s competitive advantages, such as high-quality iron ore and abundant renewable energy, to potentially develop green hydrogen supply, which will enable the offer of a “green” HBI with high added value to European steelmakers. Meanwhile, we are fostering Brazil’s new industrialization, based on the low-carbon economy, and contributing to the fight against climate change”.
Getting to grips with a hard-to-abate sector
This partnership is tackling on one of the hard-to-abate sectors. The iron and steel industry accounts for approximately 8% of the world’s total carbon emissions, primarily due to the use of coal in blast furnaces. For every ton of steel produced in blast furnaces about 2.0 tons of CO2 equivalent are released into the atmosphere. In contrast, in the direct reduction route, the HBI produced with green hydrogen as the reducing agent when supplied to Electric Arc Furnaces (EAFs), reduces carbon emissions to approximately 0.4 tons of CO2 equivalent per ton of steel produced, accounting for all emissions along the value chain. This process therefore results in an 80% reduction in emissions, enabling “green steel” production.
Vale and GEP will also collaborate on various aspects of the hydrogen value chain, such as the deployment of electrolysers or the design of industrial plants for green hydrogen and its derivates.
