Thyssenkrupp Steel Europe AG is currently reassessing its direct reduction (DR) plant project aimed at decarbonizing steel production in Duisburg, Germany, due to anticipated cost increases. However, the company maintains that the project remains feasible under the existing conditions.
In a statement, Thyssenkrupp's Executive Board informed the Supervisory Board about the expected cost escalations, prompting a review of the situation. The company stated its belief that the DR plant can still be implemented as planned, despite the challenges.
This clarification comes in response to a report from German business daily Handelsblatt, which indicated that Thyssenkrupp is exploring four potential scenarios for the hydrogen-capable DR plant, including the possibility of terminating the project.
The company emphasized that the ongoing revision of its business plan will provide insights into the broader “green transformation” of its steel division. Thyssenkrupp is committed to evaluating the most economically viable solutions to achieve long-term climate neutrality in its steel operations.
The hydrogen-capable plant, set to be constructed at Thyssenkrupp's Duisburg site in the Ruhr region, is designed to produce 2.5 million metric tonnes of directly reduced iron annually. It is expected to be completed by the end of 2026 and will connect to the German hydrogen network by 2028. The project is projected to reduce Thyssenkrupp's carbon dioxide emissions by 20%, addressing the steelmaker's contribution of 2.5% to Germany's overall emissions.
The project is supported by EUR 2 billion in state aid, which has already received EU approval. Thyssenkrupp noted that any potential cost increases for the DR plant will not affect the confirmed federal and state subsidies, and any additional costs will be assessed in future independent expert reports regarding the financial resources of the steel division as it moves toward independence.
