As CO2 emissions costs rise, gray steel will also become more expensive
The price difference between green and conventional steel will decrease by 2030. This was stated by Thyssenkrupp CEO Miguel Lopes according to S&P Global.
As Lopez noted at a general shareholders meeting, customers of Thyssenkrupp's German steel division will notice that green steel prices will be higher, especially after it is produced using green hydrogen. However, he believes that as the cost of carbon emissions increases, conventional steel products will also become more expensive.
Green hydrogen will become one of the main cost items. Thyssenkrupp aims to launch its new direct reduction iron (DRI) plant, which will replace a blast furnace, to run entirely on hydrogen by 2029. The company will finalize tenders for the latter this year.
Lopez expects Thyssenkrupp to establish more hydrogen joint ventures (JVs) in the coming years.
The company also considers the availability of energy to decarbonize steel production as a fundamental issue, an aspect that has been questioned by the company's shareholders. According to Lopez, this is why Thyssenkrupp is in favor of a joint venture with Czech EPH. He did not elaborate on current negotiations. However, the company's CEO said Thyssenkrupp would still consider Plan B if the joint venture failed, but did not say what the alternative would be.
Thyssenkrupp still plans to spin off its steel division and the company is investing €3 billion in its decarbonization, including €2 billion in support from the German government.
As the GMK Center previously reported, the weakening of the global steel market is complicating Thyssenkrupp's negotiations on the possible sale of part of its European steel division to Czech billionaire Daniel Kretinsky.
Furthermore, Thyssenkrupp is preparing a tender to purchase up to 151 ktpa of renewable, low-carbon hydrogen under 10-year contracts for volumes expected from 2028 for its Duisburg steel plant.
