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Major steel projects in Europe aim to utilize hydrogen by 2026-2027

Axel Eggert, CEO of the European Steel Association (EUROFER), highlighted Europe’s steel industry’s need for 5 million tons of hydrogen annually to transition to decarbonization. Speaking at a specialized conference in Poland, Eggert mentioned that key steel projects in the region are slated to integrate hydrogen usage by 2026-2027. However, the challenge lies in the availability of hydrogen supply. Currently, conventionally produced hydrogen is priced at €10-11/kg, but for the industry to remain competitive, the cost should ideally be reduced to €2-3/kg.

Experts at the conference estimated that Europe may require 20-25 years to secure sufficient hydrogen supplies for decarbonizing its steel industry. Eggert emphasized the importance of carbon capture and storage (CCUS) for the industry’s development, especially as the EU’s free carbon emission allowances are set to expire by 2034. With renewable energy unable to meet the existing demand by that time, CCUS becomes crucial, particularly for coal-based steel production continuation.

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Tomasz Slezak, CEO of Poland’s Weglokoks, suggested that coking coal will remain necessary until alternative technology becomes fully realized, a process that could take considerable time in the EU. Despite being listed as a critical raw material by the EU, coking coal is viewed negatively. Poland, with its coal mines, skilled labor, and expertise, has some flexibility in this regard.

In related news, Germany’s government coalition has devised a financing mechanism for the country’s future hydrogen network, extending its construction period to 2037 and providing investor protection in case of bankruptcy. The primary hydrogen network, spanning over 9.7 thousand kilometers, will cost around €20 billion, with 60% of the infrastructure comprising existing gas pipelines.

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