Energy giant bp has signed an agreement with thyssenkrupp Steel (thyssenkrupp) to accelerate the steel industry’s transition to low emission energy by focusing on the development long-term supply of low carbon hydrogen and renewable power.

Announced today (11th July), the deal will contribute to the decarbonisation of an industry responsible for 8-11% of global carbon dioxide (CO2) emissions and 2.5% of Germany’s CO2 emissions. 

By using direct reduction plants instead of coal-fired blast furnaces to reduce iron ore with low-carbon blue and green hydrogen, thyssenkrupp aims to make steel production climate-neutral by 2045. 

The project is part of bp’s plan to invest in and work to develop a portfolio of industrial-scale hydrogen projects in Germany, the Netherlands, Spain, the UK, and Australia. 

“The steel and energy industries have of course been closely linked,” said William Lin, Executive Vice President Regions, Cities, and Solutions, bp. 

“We provide fuel and feedstock for steel production while our platforms, pipelines, and turbine towers are made from steel.” 

To further advance the development of low carbon hydrogen and the growth of green steel in Europe, the companies intend to push for relevant policies. 

Commenting on the agreement, Dr. Arnd Köfler, Chief Technology Officer, thyssenkrupp Steel, said, “The decarbonisation of the steel industry will require enormous quantities of low-carbon and in the long term green hydrogen.” 

To do this, a hydrogen-based infrastructure must be built including a pipeline network and clean electrolyser technology. 

“The MoU is an important milestone for us to set the course with bp for a reliable supply of energy in the future,” he added. 

Currently producing 11m tonnes of crude steel per year, thyssenkrupp aims to produce 400,000 tonnes of CO2-reduced steel by 2025.