Michael Bock in front of staples of steel coils
Green hydrogen

Green hydrogen

The pioneers

Germany’s second largest steelworks in Salzgitter plans to manufacture steel with green hydrogen instead of coal as it has in the past. Technically speaking, this is already possible. The conversion can prevent 95 per cent of the previous level of CO₂ emissions. But transitioning to the climate-friendly process is a mammoth task. The groundwork was laid in Salzgitter five years ago. And now things are gaining momentum with the “Salzgitter Clean Hydrogen” project.

A hydrogen-powered car on a country road

The hydrogen-driven company car promotes the SALCOS innovation concept with which carbon is to be completely replaced by green hydrogen and electricity in steel production by 2050.

“Steelmaking. Reinvented.“ is written on the doors of the company car with hydrogen drive. A big promise. The emission-free car barely makes a sound as it starts at the headquarters of Salzgitter AG and heads in the direction of the steelworks, past 169-meter-high wind turbines (four in front of Gate 6, three behind it). On the way to galvanising plant 2, we also pass a construction site. “This facility is being built to produce the green hydrogen that will be used in the galvanising plant by the end of the year,” explains Michael Bock (picture above), head of energy operations at the locally based Salzgitter Flachstahl GmbH. The idea is for this big promise to be followed by truly great deeds. In other words, the conversion to a climate-friendly steel mill.

It is August, the coronavirus crisis is in full swing, and Germany’s second-largest iron and steel mill has also had to introduce reduced working hours. But everyone is looking to the future. Far into the future. For good reason. “If the overall political conditions stay as they are, there will be no more CO₂ certificates in 2050, either for free or for sale,” predicts engineer Jens Traupe, head of the Environmental Protection and Energy Policy department at Salzgitter AG. Companies are not allowed to release CO₂ emissions without the certificates. That would be the end of the steel industry in Europe, which, like all the major steel producers worldwide, uses coke in its blast furnaces.

Aerial view of the steelworks and one wind turbine of Salzgitter AG

Wind power and green hydrogen are to replace carbon in steel production

Michael Bock is Head of Energy Operations at Salzgitter AG

Michael Bock in front of the steel mill’s own coke storage facility. This is where around 40,000 tonnes of coking coal needed for steel production are stored – but this is set to change.

95 per cent fewer CO₂ emissions

Coke is used as fuel for heat and removes from iron ore the oxygen, which interferes with further processing. It's a safe process that has been tried and tested over centuries, but with only one catch: to produce one tonne of steel, two tonnes of CO₂ are released into the air. The Salzgitter steel mill emits eight million tonnes of carbon dioxide per year as a result of the processes. This represents about one per cent of annual CO₂ emissions in Germany. “If we want to lower this figure, it’s not enough just to tweak a few things here and there,” says Traupe. “We have to convert all steel production to hydrogen.”

A concept for this has already existed for five years: SALCOS. The name stands for “Salzgitter Low CO₂ Steelmaking”. The core goal is to completely replace carbon with green hydrogen and electricity in steel production by 2050. This is possible because hydrogen can dowhat coke does: be used as fuel for heat and bind oxygen. The waste product is not CO₂, which is harmful to the climate, but H₂O; in other words, water. Technically speaking, this is already possible. Salzgitter has tested this process together with the plant engineering company Tenova and the Fraunhofer-Gesellschaft. The conversion could lower current CO₂ emissions by 95 per cent. Traupe is convinced: “Either I have a concept like SALCOS or I will no longer produce steel in Europe in the future.”

Engineer Jens Traupe, head of the Environmental Protection and Energy Policy department at Salzgitter AG
“It’s not enough just to tweak a few things here and there.”

Jens Traupe, head of the Environmental Protection and Energy Policy department at Salzgitter AG

The path to funding

IKB Deutsche Industriebank AG found the right KfW funding for Salzgitter AG: the Federal Promotion for Energy Efficiency in the Economy with the KfW programme number 295. With this programme, the Federal Ministry for Economic Affairs and Energy and KfW support measures that significantly increase electricity or heat efficiency in companies and thus help to reduce energy consumption.

The Salzgitter Clean Hydrogen project

Salzgitter uses SALCOS to define its long-term goal. But there will be many necessary phases along the way. One of these is the “Salzgitter Clean Hydrogen” energy project, which is supported by KfW with a refinancing loan of around 3.7 million euros and a redemption grant of around 1 million euros from funds of the Federal Ministry for Economic Affairs and Energy in programme 295. The project includes the seven wind turbines in front of and behind Gate 6 of the iron and steel works, belonging to the project partner Avacon Natur GmbH. They will supply the green electricity for a 2.5 megawatt electrolysis plant built by Siemens Gas and Power. The plant is designed to meet the entire current demand for hydrogen.

Even now, before converting the energy source from coal to hydrogen, there is already demand for hydrogen in the iron and steelwork that has nothing to do with steel production itself. It functions as a protective gas, for example during galvanising. Mixed with nitrogen, it prevents the flat steel moving through the galvanising system from reacting with oxygen before it is dipped into the 450 degree hot zinc bath. Currently, this hydrogen is still grey, usually produced from natural gas and delivered by tanker trucks.

Hydrogen containers on trucks

Instead of having hydrogen delivered as is the case now, in future Salzgitter AG intends to produce its own hydrogen on site.

“We now want to replace this hydrogen with our own from the Salzgitter Clean Hydrogen project,” explains Michael Bock. Salzgitter AG and its project partner Avacon are investing 50 million euros in the project. At its core is the PEM electrolysis plant. It can produce around 400 standard cubic metres of hydrogen per hour. PEM is the abbreviation for Proton Exchange Membrane, a technically established process in which protons migrate through a membrane by applying electrical voltage. In the process H₂O is split into its components H₂ and O; in other words, hydrogen and oxygen.

“The distilled water needed for this is produced in the group’s own plant, which treats the process water from the steel mill,” continues Michael Bock. Excess electricity from the wind turbines – which together have a capacity of around 30 megawatts – is fed into the grid. In addition to Avacon, there is also the project partner Linde, a gas manufacturer available as a back-up that will continue to supply hydrogen in tanks if the PEM electrolysis fails. Although this hydrogen is still “grey”, things are changing at Linde, too. For example, the industrial group has joined forces with the British hydrogen specialist ITM Power with the aim of supplying large-scale industry with green hydrogen in the future. Because demand is on the rise.

Read more under the image gallery.

Grey and green hydrogen

To produce grey hydrogen, natural gas is usually heated and converted into hydrogen and CO₂ (steam reforming). The CO₂ is then released unused into the atmosphere, thereby intensifying the global greenhouse effect, as the production of one tonne of hydrogen produces around ten tonnes of CO₂. Green hydrogen is produced using renewable energy.

The end of the blast furnace era

Hydrogen is the most common chemical element on earth, as well as in the universe, and is an excellent energy source. It has not been used in large quantities in the energy sector and industry for a long time, however, in part due to the fact that, although it is present in most organic compounds, it is almost never available in pure form. Breaking up the compounds is an energy-intensive and technically complex process. If fossil fuels are used for this, the carbon footprint is poor. The production of one tonne of hydrogen generates around ten tonnes of CO₂. The result: grey hydrogen. But if renewable sources are used for generation, green hydrogen is produced – and the intended carbon footprint is achieved.

To be able to use hydrogen not only as a protective gas in production, but also as an energy source instead of coal, steel plants like Salzgitter need new facilities that will replace blast furnaces in the future. The aim is to reduce iron ore pellets directly in them. In the direct reduction process, iron, which occurs in ore as iron oxide – i.e. in chemical combination with oxygen – is not melted down as before, but sprayed with hydrogen at high temperatures. The oxygen in the iron oxide combines with the hydrogen. The result is pellets made of 90 per cent iron. In the final processing step, these pellets are then bombarded with a kind of continuous lightning in electric furnaces and melted down. The waste products of this production method are water and a harmless amount of nitrogen oxide, which is formed during hydrogen combustion.

93 per cent of all atoms in our solar system are hydrogen

Technology already undergoing trials

“The fact that we opted for the direct prevention of CO₂ in the production process five years ago means that we are now of course a step ahead of the others,” says Olaf Reinecke from Group Communications at Salzgitter, not without a bit of pride. But Salzgitter is not complacent about its headstart. Michael Bock is already overseeing another project in addition to the PEM electrolysis facility. Behind the name GrInHy2.0 (pronounced: Green High 2.0) is the world’s largest high-temperature electrolysis plant. “It is an alternative way to generate hydrogen that uses steam from our production processes instead of water and is perhaps the more energy-efficient method,” explains Bock.

More energy-efficient and less water-intensive, this is also an important aspect in view of the increasingly scarce resource of water. “If we make SALCOS a reality, we are talking about water volumes of three to four million cubic metres per year that we need for hydrogen production,” Bock explains. "We will of course try to reuse all the water we produce in the interest of recycling." The next milestone is the construction of a direct small-scale reduction plant to gain important insights for the complete transformation to a climate-friendly steel mill.

A chassis of a car stands in a production hall.

Flat steel is used for car bodies, for example. According to a study, the end customer would have to pay one to two per cent more for a mid-range car made of green steel.

Green steel is more expensive than grey

As a result, the climate-friendly steel produced by direct reduction is none other than that from the blast furnace. But green hydrogen is more expensive as a reduction agent than coal. For the end product this means: “One tonne of steel á la SALCOS will be two thirds more expensive than it is today,” Traupe quotes from a study conducted by the think-tank Agora Energiewende. The conversion to a climate-friendly steel mill will continue to be risky until there are clear signals from politicians as to how this distortion of competition can be offset throughout Europe. In Salzgitter they are confident that this debate will happen. And even if two thirds sounds like a lot, the end consumer would only have to pay around one or two per cent more for a car made of green steel. And that has to be worth it to us.

Published on KfW Stories: 29 September 2020.