April 2022
Direct reduced iron (DRI) supply is expanding across the global steel industry. The accelerating move towards reducing carbon emissions, and the increase in the capacity of DRI modules have renewed interest across the sector.

In addition, hydrogen reduction as a production facility has also been attracting increased attention. The DRI production process has traditionally been pursued in oil-producing countries. However, it is now spreading to other regions on the back of policies aimed at reducing carbon emissions.

This paper outlines the new DRI/HBI plants being looked at within the global steel industry, particularly in Europe as the region seeks to meet its goal of a 55% reduction in carbon emissions by 2030 (compared to 1990) and net-zero carbon emissions by 2050.




ArcelorMittal has stated goals to decrease carbon emissions by 35% by 2030 and achieve net-zero carbon emissions by 2050. The company already operates Europe’s only DRI-EAF facility in Hamburg, which uses natural gas to reduce iron ore. The DRI is combined with scrap in the electric arc furnace (EAF).

ArcelorMittal is planning a EUR110m (US$129m) investment in the Hamburg H2 project, and in September 2021 the German government committed EUR55m (US$65m) to support the project. Hamburg H2 will test the possibility of producing DRI with 100% hydrogen at a scale of 0.1Mt by 2025 and how this DRI will perform in an EAF.

The pilot plant will initially use grey hydrogen in the leadup to green hydrogen becoming commercially available. The renewable energy for green hydrogen production could be produced by wind farms off the coast of Northern Germany.

The company also plans to build a 2.3Mtpa green hydrogen DRI unit coupled with a 1.1Mt hybrid EAF at Gijón in Spain, which would be the world’s first full-scale zero carbon-emissions steel plant.

The company has signed a memorandum of understanding with the Spanish government describing a joint investment of EUR1bn (US$1.2bn) in the project, which will begin production at the end of 2025. The project will reduce emissions by increasing the use of steel scrap and hydrogen-based DRI in its EAFs and by powering all steelmaking assets with renewable electricity.

ArcelorMittal is planning to build a large plant for DRI and EAF-based steelmaking at its site in Bremen, as well as an innovative DRI pilot plant and EAF in Eisenhüttenstadt. Using green hydrogen, ArcelorMittal expects up to 3.5Mt of steel could be produced by the Bremen and Eisenhuttenstadt sites by 2030 - significantly lowering the company’s CO2 emissions. Depending on the amount of hydrogen available, ArcelorMittal anticipates CO2 savings of more than 5Mt from the new technology. The technology conversion is expected to require investments in the range of EUR1-1.5b (~US$1.7b).

The company, with support from the French government, will invest EUR1.7bn (US$2.0bn) in decarbonisation efforts in France. It will build a 2.5Mtpa EAF in Fos-Sur-Mer and a 2.5Mtpa hydrogen based DRI unit plus EAF in Dunkerque. These facilities will be operational by 2027, with a blast furnace in Fos-sur-Mer and two blast furnaces in Dunkirk phased out by that time. These projects are expected to decrease ArcelorMittal’s carbon emissions in France by 40% (or 7.8Mtpa) by 2030.

ArcelorMittal has also planned a EUR1.1bn (US$1.3bn) investment with the governments of Belgium and Flanders into its Gent steel plant. It will build a 2.5Mt DRI plant and two EAFs at the site. The plan is for a gradual transition from the existing Gent blast furnace, refurbished in 2020 for EUR195m (US$229m), to the DRI and two EAFs, with the blast furnace closing by 2030. This is anticipated to result in a reduction in CO2 emissions of around 3Mtpa.



The construction of Salzgitter’s μDRAL DRI Plant has commenced with a total of EUR13.6m (US$16m) investment. It is the first iron ore direct reduction plant with production capacity of 2.5tpd that would be designed to run on natural gas and hydrogen.

It is expected that the first production will be seen in the first half of 2022 and the product DRI will be fed into the company's blast furnace to reduce PCI coal usage as well as into the EAF at the Peine plant. Salzgitter expects to fully convert its steelmaking process to hydrogen by 2050, which would reduce its carbon emission in steel production by ~95%.



Thyssenkrupp Steel has a plan to transition four blast furnaces in Duisburg from BF pellet to DRI pellet from 2025, responding to the movement to reduce carbon emission. Thyssenkrupp will use green hydrogen where possible for its blast furnaces in the short term (2019-2022) and gradually transition its four coal-fired blast furnaces to four green hydrogen DRI units paired with four electrical melting units.

These DRI and melting units can be paired with a basic oxygen furnace, much like in traditional blast furnace steelmaking. Thyssenkrupp will replace one blast furnace with a 1.2Mtpa DRI plant running on natural gas, and later green hydrogen, paired with a melting unit from 2025. Another blast furnace will be replaced by 2029 and all four will be replaced by 2045 (Duisburg’s current blast furnace capacity is 11.7Mtpa). Thyssenkrupp has said that 0.72Mtpa of hydrogen will be required for this strategy, equivalent to that produced by 3,800 wind turbines.



SSAB, LKAB and Vattenfall announced that their joint owned HYBRIT pilot plant in Lulea, Sweden has produced the world’s first hydrogen DRI with fossil-free electricity. Trial production began at HYBRIT 's pilot plant in August 2020 and is planned to run until 2024. HYBRIT aims to substitute coking coal with hydrogen and create a value chain for fossil-free steel and reduce Sweden’s total CO2 emissions by 10%.

The world’s first fossil-free industrial-scale production with production capacity of 1.3Mtpa in Gällivare, North Sweden is scheduled to begin in 2026. The product from the demonstration plant will contribute to LKAB’s transition plan. It is expected to expand DRI pellet production to a full capacity of 2.7Mtpa by 2030, providing SSAB and other plants with feedstock for its fossil-free steel. The new plant will use the new HYBRIT technology to remove the fossil fuel consumption.



China's Hesteel Group (HBIS) has also embarked on the DRI using the hydrogen path. It plans to build hydrogen-based DRI plant with an annual output of 1.2Mtpa in Zhangjiakou City, Hebei Province. Currently, there are no DRI plants in the East Asian region including major producers in Japan and Korea as these countries are traditional importers of LNG. The DRI plant will be the first gas-based DRI plant in China. Compared with the traditional BF/BOF process, carbon dioxide emissions will be reduced by 40% to 60%.

The first stage of 600kt is planned to be put into operation by the end of 2022. After completion, it will be the world's first industrialised production plant using hydrogen-rich gas to produce DRI. The second stage of an additional 600kt will use hydrogen as reducing gas generated by electrolysing water using wind energy, solar energy and other renewable energy to realise fossil-free smelting.



At the end of March 2022, South Korean steel giant POSCO signed a heads of agreement with Australian mining company Hancock Prospecting to study the feasibility of HBI production. The feasibility study will look into the construction of an HBI plant and to develop a detailed plan by the year-end.

POSCO plans to invest in an HBI production facility with a production capacity of 2Mtpa, in partnership with Hancock's Roy Hill mine. The plant will supply a POSCO EAF plant to be built in South Korea by 2027.


Tosyali Holding

In July 2021, Tosyali Holding awarded Midrex a contract to build a second DRI plant at the Tosyali Algerie steelworks in Bethioua (Oran), Algeria. The DRI plant will produce 2.5Mtpa of cold DRI and hot DRI, with the capability of all Midrex Plants to operate with additional hydrogen in the future. HDRI will be fed via a hot transport conveyor into a new EAF.

The conveyor allows greater EAF productivity and energy savings. During melt shop outages, the plant can continue producing CDRI up to full capacity, which maximises operational ability. It expects the new plant to start operations in mid-2024.



Metalloinvest has long been the centre for DRI production in Russia, as the company believes that premium pellets and HBI/DRI are the future of green steelmaking. Metalloinvest will be doubling down on its position as the largest producer of merchant DRI, by adding a 2Mtpa DRI/HBI plant at MGOK, which is jointly owned by USM, to capitalise on its upgraded pellet products.

The plant is scheduled to be commissioned in the first half of 2024 with a total investment of more than RUB40b (US$550m). The company will have the ability to produce concentrate, BF grade pellets, DR grade pellets and HBI at all its mining complexes. In the meantime, it is expected that MGOK’s DR grade pellets will be sold on the merchant market as well as used by the company’s other facilities as required.  

Metalloinvest has contracted with Midrex Technologies to construct a new HBI Plant (HBI-4) at Lebedinsky GOK (LOGK). The plant has a design production capacity of 2.08Mtpa, and investment in the project will be approximately US$600m. The project will create 375 jobs and is expected to be operational in the first half of 2025.

When the two new HBI plants are fully operational, the combined HBI production capacity of USM and Metalloinvest will reach ~9Mtpa.


NLMK Group

Russian steelmaker NLMK Group has signed a Memorandum of Intent (MOI) with the Belgorod Region administration, and the Russian Ministry of Industry and Trade to construct a new metals and mining facility at the Stoilensky Mining and Beneficiation Plant.

The project covers the expansion of the existing open-pit mine to increase iron ore output from 43Mtpa to 67Mtpa, the construction of new beneficiation capacities for a total of 10Mtpa of concentrate, a pelletising plant with a capacity of 9Mtpa of pellets, and an HBI plant with a capacity of 2.5Mt. The investment will total approximately RUB250bn (US$3.4bn). The project is planned to be implemented between 2024 and 2027, with commissioning scheduled from 2027-28.