Thyssenkrupp Steel suspends tender for green hydrogen due to high prices

German steelmaker Thyssenkrupp Steel has suspended a tender for the purchase of environmentally friendly hydrogen for its direct reduction plant in Duisburg. This is reported by S&P Global.

This step is due to the fact that the proposed hydrogen prices were significantly higher than the company expected, and other framework parameters of the hydrogen economy, which is developing more slowly than expected, will change significantly.

The decision to suspend the hydrogen tender will not directly affect the construction and operation of the direct reduction plant, as the company can also operate on natural gas, Thyssenkrupp noted.

The company added that DRI production using natural gas will avoid 50% of carbon emissions compared to conventional blast furnaces.

Thyssenkrupp Steel announced a tender for the purchase of renewable and low-carbon hydrogen under 10-year contracts in February 2024. It was to be supplied by pipeline to the steel plant in Duisburg. The steel mill was expected to receive 104 thousand tons of hydrogen in 2028, with a further increase to 143 thousand tons per year in 2029-2035. 151 thousand tons per year was expected to be reached in 2036-2037.

The company planned to use natural gas when the plant was commissioned, with a gradual switch to hydrogen production as hydrogen production developed. However, the deployment of the green hydrogen economy in Europe has been postponed several times as developers struggle with first-of-its-kind projects and the lack of necessary infrastructure.

It is noted that Thyssenkrupp will discuss the conclusions of its tender on prices, quantities, and conditions with the tender funding agency, the German government, and the European Commission. The company will then intensify its efforts on the procurement concept and contacts with suppliers to take into account possible delays in the ramp-up of hydrogen production.

As GMK Center reported earlier, thirteen German industry associations have called on the future government to initiate a strategic alliance on hydrogen at the European level.