An application for receiving funds will be submitted in June, a decision is expected in the fall

Austrian steel producer Voestalpine expects to receive billions in funding from Austria to switch from blast furnaces to electric arc furnaces. This was announced by the executive director Herbert Eibensteiner, informs Der Standard.

Earlier, the company received a rejection in its application for financing the project in the EU innovation fund. The application for receiving funds in Austria will be submitted in June 2023, a decision on it is expected in October-November. Two new electric arc furnaces are to replace blast furnaces with high carbon emissions at the company’s plants in Linz and Donavica by 2027.

According to Eibensteiner, the company is hoping for a high, double-digit million-euro sum from the transformation fund that the Austrian government has set up to support industry on its way to a green transition.

In the 2022/2023 financial year (ended March 31), Voestalpine achieved a record operating result, despite adverse conditions – the war in Ukraine, high prices for energy and raw materials, and high inflation. In this period, the company’s EBITDA (earnings before interest, taxes, depreciation and amortization) increased by 11.1% y/y – up to €2.5 billion. Despite the drop in volumes, group sales increased by 22.1% y/y in monetary terms – up to €18.2 billion. Voestalpine expects a lower EBITDA indicator in the 2023/2024 financial year – at the level of €1.7-1.9 billion.

As GMK Center reported earlier, Voestalpine plans to invest in the construction of two electric arc furnaces, which are planned to start in 2024, about €1.5 billion. The investment was approved as part of the company’s ambition to achieve carbon neutrality by 2050. It is expected that by 2030, these units will replace one blast furnace each at the plants in Linz and Donavitza.

As Herbert Eibensteiner previously noted, although the company plans to obtain external financing for the construction of these units, it is expected that Voestalpine will have to shoulder most of the costs. Electric arc furnaces will allow the Austrian company to produce approximately 2.5 million tons of green steel per year.