BP and thyssenkrupp Steel have signed a memorandum of understanding focused on the development of long-term supply of low carbon hydrogen and renewable power in steel production.

The companies will explore supply options for both blue and green hydrogen, as well as power from wind and solar generation through the use of power purchase agreements.

thyssenkrupp Steel accounts for 2.5% of CO2 emissions in Germany, mainly at the Duisburg site where the main emitters, the blast furnaces, are operated.

By replacing the coal-fired blast furnaces with direct reduction plants where iron ore is reduced with low-carbon hydrogen, thyssenkrupp Steel intends to make steel production climate-neutral in the long term.

William Lin, bp’s executive vice president of regions, cities and solutions said the steel and energy industries have long been closely linked.

“thyssenkrupp Steel has the ambition to make its steel production climate-neutral by 2045 and low carbon power and hydrogen will play a critical role in achieving that."

William Lin, bp’s executive vice president of regions, cities and solutions

"We provide fuel and feedstock for steel production while our platforms, pipelines, and turbine towers are made from steel," he said.

“thyssenkrupp Steel has the ambition to make its steel production climate-neutral by 2045 and low carbon power and hydrogen will play a critical role in achieving that."

As part of its strategy to provide a range of decarbonization solutions to corporates, BP is already investing in and working to develop a portfolio of industrial-scale hydrogen projects in Germany, the Netherlands, Spain, the UK and Australia.

"With our aligned ambitions and complementary investments, thyssenkrupp Steel and BP can together help this hard-to-abate sector decarbonize faster,” Lin added.

''The MoU is an important milestone for us to set the course with bp for a reliable supply of energy in the future."

Dr. Arnd Köfler, chief technology officer at thyssenkrupp Steel

Dr. Arnd Köfler, chief technology officer at thyssenkrupp Steel, said the decarbonization of the steel industry will require enormous quantities of low-carbon and in the long term green hydrogen.

"This will increasingly require the use of electricity from renewable sources," he said.

"All this can only be achieved through a well-developed hydrogen infrastructure with a supra-regional pipeline network. The MoU is an important milestone for us to set the course with BP for a reliable supply of energy in the future."

Steel accounts for 8-11% of global CO2 emissions. It is essential for the automotive and construction industries and for the manufacturing of industrial machinery. It also forms the foundation for a string of decarbonization technologies, including wind turbines, generators and smart power grids.

thyssenkrupp Steel currently produces 11 Mt of crude steel per year and is targeting the production of 400 Kt of CO2-reduced steel by 2025.