Hydrogen will be used for the production of direct reduction iron and decarbonization of the country's steel industry

The European Commission (EC) has allocated €402 million in funding to create a green hydrogen hub in the Italian region of Puglia. Reuters reports this with reference to the energy companies involved in the project.

Green hydrogen, which is produced using renewable energy sources, should replace fossil fuels in some energy-intensive industries in the EU, as the bloc has big ambitions to reduce carbon emissions.

The Green Valley is to provide 260 MW of solar power generation and 160 MW of electrolysis capacity for hydrogen production near the cities of Brindisi and Taranto.

The fuel will be used in the production of direct reduced iron (DRI) to decarbonize the steelmaking process at Italy’s largest steel plant in Taranto (ADI) and a consortium of other steel mills.

As GMK Center reported earlier, in 2023, Italian steelmakers reduced steel production by 2.5% compared to 2022, to 21.06 million tons. The decline in steel production was driven by a decline in global demand for steel products and high energy costs.

Long products production for the year amounted to 11.68 million tons, down 2.9% compared to 2022, and flat products production amounted to 9.54 million tons (-0.1% y/y).

The European Commission recently approved an Italian scheme worth €550 million to support investments in the use of hydrogen in industrial processes. The Italian government will provide this support to industries that are difficult to decarbonize from a technological and economic point of view, such as steel, paper, glass, and others. The funds will be available until the end of 2025 and will be used to replace fossil fuels with green hydrogen.