Austria’s voestalpine envisions the direct reduction of iron ore and the production of green hydrogen at sites with low-cost energy – outside Central Europe and not at its local plants.
In Germany and Austria alike, converting steel production to climate-neutral green hydrogen is regarded as a ray of hope. Steel producers here at home, such as Salzgitter, ThyssenKrupp and Saarstahl, have received subsidies amounting to billions so that they can implement direct reduction at their sites.
Unlike its German competitors, Austria’s steel no. 1 voestalpine is not pinning particularly high hopes on the direct reduction of iron ore using green hydrogen at its local sites.
“We have examined hydrogen but have not been able to identify any business case or calculate any economic efficiency,” Herbert Eibensteiner, head of voestalpine AG said at the Handelsblatt annual conference Zukunft Stahl 2025 in Essen. Rather, at voestalpine, they were assuming that hydrogen and – in conjunction with iron ore – HBI as well (hot briquetted iron, porous sponge iron pressed into briquets) would in future be produced where energy is cheaper than in Central Europe. “And I believe that we will then be purchasing these raw materials exactly the way we currently buy pellets,” Eibensteiner reports.
Decarbonisation according to phased plan
To minimise the risks that will arise from converting facilities still under operation and from altered environmental conditions in the years to come, the decarbonisation strategy at voestalpine is operating according to a phased plan. Hydrogen plays an important role here; however, for as long as the availability of hydrogen is limited, natural gas will be on the agenda as a transitional technology – including for the Austrians. Of the five blast furnaces operated by the company, one blast furnace each is scheduled to be superseded by an electric arc furnace at the two sites Linz and Donawitz from 2027, which will lead to a CO2 reduction of 30% by 2029 compared with reference year 2019. According to the plan, two more blast furnaces at the two sites will be superseded by electric arc furnace technology from 2030, so that a reduction in CO2 emissions of 50% can then be achieved. The steps following that from 2035 are still rather vaguely defined, as Eibensteiner explained at the steel conference.
In addition to HBI and the electric steel route, two more processes within the greentec steel research strategy are at the focus for the final step towards Net Zero by 2050. For one, there is the sustainable steel project for steel production using hydrogen plasma. The process is already functioning at laboratory scale, but the research project is still very far from being ready for industrial application.
Direct reduction of fines using hydrogen
The other project is called Hy4Smelt and its goal is the direct reduction of fines using hydrogen. While today’s direct reduction processes are reliant on fine ore that is of very high quality and hence scarce and expensive, Hy4smelt works with cost-effective raw materials and could therefore represent a genuine, even economical, breakthrough technology. Project partner is Primetals, a research company that also recently became a mine operator. According to Eibensteiner, the research outcomes up to now have been promising. The decision has already been taken to build a demonstration plant for fine ore reduction based on hydrogen; construction of the plant is expected to be commenced within this financial year, as Eibensteiner announced. However, the head of voestalpine is harbouring no illusions as to which technology will make the race at the “last mile”. “The final step – achieving Net Zero by 2050 – will be the most difficult one.
