Voestalpine to switch to green steel production via EAFs by 2027

Austrian steelmaking group Voestalpine intends to replace coal-fuelled blast furnaces with climate-friendly electric-arc furnaces (EAFs) powered by green electricity at its sites in Linz and Donawitz by 2027, the company said in a press release on Wednesday March 23

Implementation of the project to decarbonize steel production will allow the company to reduce carbon emissions by as much as 30%, Voestalpine said. “This will correspond to a saving of around 3-4 million tonnes per year of CO2, or almost 5% of Austria’s annual carbon emissions,” it added.

According to the project plan, Voestalpine will start to clear the necessary areas and convert infrastructure at Linz and Donawitz in the summer of 2022, to allow the start of EAF construction in 2024. The two EAFs should commence operations by early 2027, it said.

The estimated investment during the first phase from 2022 to 2024 will be in the low triple-digit million-euro range, with total investment estimated around €1 billion ($1.1 billion), according to the statement.

But the final decision to invest in EAFs will be taken by Voestalpine’s supervisory board in 2023, the company said.

“A market for green steel is emerging in Europe. A particular driver behind this development is the European automotive industry,” Herbert Eibensteiner, chairman of the management board, said.

Over the long term, Voestalpine intended to achieve carbon-neutral steel production using green hydrogen, it said, and it has already undertaken intensive research into promising breakthrough technologies.

What to read next
Downward pressure on global steel prices, caused by continued high levels of Chinese steel production at prices below costs, creates incentives than can lead to a rebalancing of global supply and demand and a boost to profitability, World Steel Dynamics chief executive officer Philipp Englin said at the Global Steel Dynamics Forum in New York on Wednesday June 18.
Japanese steel major Nippon Steel is aiming to hit its 2050 goal of carbon neutrality by focusing on hydrogen-based direct reduced iron (DRI) to make a breakthrough in green steel production, the company said on Friday May 30.
The European Union’s Carbon Border Adjustment Mechanism will be implemented in seven months’ time but the region’s steel industry was still not fully prepared for the gradual changes the system will involve, Fastmarkets heard on Thursday May 8 at the Made in Steel trade fair in Milan, Italy.
The global steel industry’s move to decarbonize and China’s penchant for lower-grade ores in recent years have uncovered challenges for high-grade iron ore to live out its value in both the blast furnace-based steelmaking route and the direct-reduction iron process, delegates told Fastmarkets during the Singapore International Ferrous Week (SIFW), which takes place from May 26-30.
The global iron ore market, a pivotal component of the steelmaking industry, has historically been driven by simple supply and demand dynamics. However, steel trade tariffs, trade wars and a growing trend toward resource nationalism are reshaping this once-basic industrial staple. These forces, alongside rising environmental regulations and shifting trade patterns, are profoundly influencing iron ore pricing, production and consumption trends. 
The playing field for global iron ore brands could be poised to be leveled, given a recent announcement on lower iron content in a key mainstream Australian direct shipping ore, iron ore market participants told Fastmarkets, adding that the development could narrow the price disparities between major Australian mid-grade iron ore brands.