More than a billion euros for green steel at the Linz site

More than a billion euros for green steel at the Linz site
More than a billion euros for green steel at the Linz site

The components marked in blue will be built in Linz by 2027.
Image: voestalpine

Where can you avoid the most carbon dioxide (CO2) in Austria? Probably with the conversion of steel production. Consequently, CEO Herbert Eibensteiner speaks of the largest climate protection project in the republic. The group will invest 1.5 billion euros in the Linz and Donawitz locations by 2027, in Linz alone it will be more than one billion euros. This was approved by the voestalpine Supervisory Board this week.

An electric arc furnace is set up at both locations, as well as a raw material store for sponge iron, a scrap yard and a 220 kV power supply in Linz. This should make it possible to produce 2.5 million tons of steel per year in a climate-friendly manner. “greentec steel” is the brand that is widely advertised. It is a radical change in steel production.

The electric furnaces produce crude steel from scrap and sponge iron (HBI). The production of the green steel will reduce the total CO2 emissions of voestalpine by 30 percent and those of Austria by five percent from 2027, says Eibensteiner.

Raw materials are secured

The supply of raw materials and the supply of green electricity are permanently secured. Sponge iron comes from Texas, where voestalpine set up its own production in Corpus Christi, but has since sold the majority. She still holds 20 percent of it and thus has access to this so-called HBI (Hot Briquetted Iron). As reported, the power supply is to be secured via an additional line through Upper Austria. The environmental procedures for this have been completed, and the ground-breaking ceremony for a corresponding substation took place this week.

Originally it was said that the expansion plan would cost around one billion euros for both locations. Higher construction costs, but also the preference of other components would now make the project more expensive. Eibensteiner says the 1.5 billion euros are part of voestalpine’s multi-year investment program. They are mainly financed from cash flow and loans.

However, it is still unclear how high the funding from the public sector is, which wants to promote the switch with a transformation fund. This is being negotiated with representatives of the climate protection and economics ministries. “Constructive”, as Eibensteiner emphasizes. As reported, impatience has increased in the industry because Climate Protection Minister Leonore Gewessler was late in announcing the funding guidelines. However, Eibensteiner expects that the funding commitments will come in good time and will be in the mid to high double-digit million range.

Construction of the project will start in 2024. From this period, a market for green steel will develop. Due to the production costs, this will be significantly more expensive than conventional steel, says Eibensteiner. However, the customers themselves would be forced to resort to green steel due to stricter environmental and climate protection regulations.

voestalpine wants to put the next electric furnaces into operation in 2030, then only one blast furnace would remain in Linz. At the same time, the group is researching green steel production using hydrogen. The goal is to meet the requirements and produce climate-neutral steel by 2050, says Eibensteiner.

State politicians reacted positively. “We are very grateful to voestalpine for this impulse,” says Governor Thomas Stelzer. (dm)

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