Spain has approved a €60m grant from EU funds to build a hydrogen-powered steel mill, which the World Economic Forum has described as one of the “five most important industrial decarbonisation initiatives in the world”.
Hydnum, which was formed specifically to build the zero-carbon plant, said last year it was planning to build it in the town of Puertollano in the province of Castile–La Mancha, about 100km south of Madrid.
The aim is to use green hydrogen to produce sponge iron, which will then be mixed with scrap in an arc furnace to produce up to 1.5 million tonnes of rolled steel a year. In later phases of the project, this will be expanded to 2.6 million tonnes.
Hydnum says the plant will have a futuristic control system, bringing together computer vision, digital twins, predictive analytics and AI to optimise safety, efficiency and quality.
Despite the digitised control system, Hydnum says the plant will create 1,000 direct jobs.
While other European steel-makers have been hit by high energy prices and fierce Chinese competition (see further reading), Hydnum has some security in a seven-year, €1bn deal to supply steel to Spanish fabricator Gonvarri Industries.
Hydnum said the agreement marked a “milestone in the transition towards a more sustainable industry”.
Chief executive Eva Maneiro added that her aim was to “lead change with every tonne of green steel we put on the market and with every innovation that challenges convention to achieve an industry that is truly committed to the future of our planet”.
The project will be carried out in partnership with Hamburg-based investment company Helvella Capital, electrical engineer Siemens, Madrid-based renewables firm ABEI Energy and Spanish steel energy specialist Russula.
The scheme is presently waiting for regulatory approvals. If these are granted, construction is expected to start by the end of 2025.
The state aid is being extended under Spain’s PERTE programme – the acronym stands for “strategic projects for economic recovery and transformation”. This is supported by the €750bn Next Generation fund, set up by the EU to help its member states to recover from the Covid-19 pandemic.
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