thyssenkrupp Steel awards €1.8B to SMS group

For the engineering, supply, and construction of the first hydrogen-powered direct reduction plant at the Duisburg location, thyssenkrupp Steel makes an order with SMS group, Düsseldorf. 

With this project, one of the largest industrial decarbonization initiatives ever launched, more than 3.5 million metric tons of CO2 will be saved annually in the future. The order volume for SMS totals more than 1.8 billion euros, making it the biggest order in business history. Along with infrastructure and media connectivity, major extra structural building services will be needed. 

In accordance with the scope for an earlier start to work that has been agreed upon, the preliminary tasks can be started right away. The plant will be finished by the end of 2026 and have a 2.5 million metric ton per year direct reduced iron (DRI) capability. The total project is still awaiting final financing determination and European Union state assistance approval. Both are anticipated to occur soon. The initiative already has strong financial backing from the German government and the state of North Rhine-Westphalia.

Start of replacement of CO2-intensive primary steel production

The contract win represents the most significant technological turnabout in the more than 200-year history of Germany’s largest steelmaker. Climate-friendly technologies are now taking over CO2-intensive steel manufacturing as part of the tkH2Steel transformation plan. Up until this moment, producing hot iron in the blast furnace using coal has always meant producing a significant amount of CO2, around 20 million metric tons annually from the Duisburg facility alone. Direct reduction plants’ hydrogen-based technologies present a crucial foundation for the production of carbon-neutral steel in the future. By 2030, thyssenkrupp Steel anticipates avoiding up to 6 million metric tons of CO2, or more than 30 percent of its emissions. By 2045 at the latest, the transition to carbon-neutral production should be complete.

The contract is given to SMS group, a North Rhine-Westphalia-based, internationally active plant builder.

The groundbreaking factory at thyssenkrupp Steel has been contracted to SMS group, a North Rhine-Westphalian business. SMS has about 100 locations and employs about 14,500 employees. It actively contributes to the sector’s transition as a specialist for steel industry production facilities. The order that has just been placed is also significant for SMS because it is the biggest order the firm has ever placed in its more than 150-year history.

High-tech for the manufacturing of steel without carbon

Thyssenkrupp will be the first steelmaker in the world to pair a 100% hydrogen-capable direct reduction plant with cutting-edge melters in an effort to find the optimal technological solution. The two melters’ close proximity to the direct reduction plant allows the solid input stock generated there to be instantly transformed into molten iron, making the entire process exceptionally effective.

The two melters’ close proximity to the direct reduction plant allows the solid input stock generated there to be instantly transformed into molten iron, making the entire process exceptionally effective. A complicated iron and steel plant’s spatial needs and restrictions can also be taken into consideration. The MIDREX Flex technology is the foundation of the direct reduction plant. Also, SMS will provide cutting-edge melters, slag granulation, and other auxiliary equipment, like water recycling. The plant is being built by SMS using an EPC model. This means that the engineering, procurement, and building of the plant fall under the overall control of the corporation. Much further work is also needed in the fields of structural and civil engineering, infrastructure, and media delivery.

The ground-breaking idea guarantees consistently high product quality. This is so that all future process stages from the steel mill onward can be maintained. It is smoothly integrated into the current iron and steel plant. The current plant structure can thus be utilized effectively. Consumers will continue to receive the full line of premium products of the high caliber they have come to expect.

significant advancement in creative, industrial climate change mitigation

Additionally, the partnership between thyssenkrupp Steel and SMS is a powerful advertisement for North Rhine-Westphalia as an industrial hub. The two businesses are collaborating to innovate and effectively combat industrial climate change by creating a direct reduction plant. 

Although thyssenkrupp Steel still contributes 2.5% of Germany’s CO2 emissions, the first direct reduction facility alone will reduce emissions by nearly 3.5 million metric tons. This highlights thyssenkrupp Steel’s pioneering role in the development of the steel sector and equates to roughly 20% of the company’s current emissions. The underlying technology concept can also be used as a template for numerous additional decarbonization initiatives in the industry throughout Europe and beyond.

Also, this transformational step will protect thousands of high-quality employment for highly qualified individuals. In addition to the jobs produced during the development of Germany’s largest direct reduction facility, the innovation cooperation between thyssenkrupp Steel and SMS will also require new credentials.

According to the scope for an early start to work agreed by the German government, the thorough planning and preparatory work for the building of the direct reduction plant would start right away. Making ready the construction site on the grounds of the thyssenkrupp Steel factory is one of the tasks on the list.

In addition to the initiative, thyssenkrupp Steel will explain the ground-breaking project that is now being created to decarbonize steelmaking at the Duisburg site in an open and transparent dialogue with local people, legislators, and the general public.


Hendrik Wüst, Minister President of North Rhine-Westphalia: “One of the most important projects for the industrial transformation in North Rhine-Westphalia is going to be implemented: The contract award to the Düsseldorf-based SMS group represents a great decision for the climate, for thyssenkrupp and for the location of North Rhine-Westphalia. It shows that in our federal state, there is not only the knowledge to produce basic carbon-neutral materials, but also the competence to build the necessary plants. In this way, we are combining climate change mitigation with sustainable industry and its high-quality jobs, and are taking a major step toward becoming a carbon-neutral industrialized country. We are supporting this project with conviction and to the tune of up to 700 million euros, thus contributing to the preservation and transformation of an important value chain for the entire economy in the state.”

Martina Merz, CEO thyssenkrupp: “At thyssenkrupp, we are doing everything in our power to accelerate the green transformation. This is also the reason why, despite all the challenges and uncertainties, we are already launching the direct reduction plant. We cannot wait until all the issues have been resolved. We must act now and invest now if we want to achieve our climate targets and secure the future of this industrial location. That is why today is a great day, both for the climate and for the industrial transformation in our federal state.”

Bernhard Osburg, CEO of thyssenkrupp Steel: “With this contract award, we are now embarking on the implementation and industrialization of our transformation. It is a historic day for thyssenkrupp Steel and good news for industrial climate change mitigation – since, just by itself, our first direct reduction plant will enable us to avoid emitting 3.5 million metric tons of CO2. We are very pleased that we have SMS as our partner for the technological leap into hydrogen-based steel production. Together, we intend to demonstrate that an innovative and sustainable transformation of the steel industry is possible in Germany and Europe. We are thus creating the basis for tomorrow’s green steel markets.”

Burkhard Dahmen, CEO SMS group: “This project means a great deal to us. thyssenkrupp and SMS have been working together closely for many decades now. We are looking forward to taking responsibility for this forward-looking project as well. We are also delighted that our technology, know-how, and expertise in project management will support the green transformation at Germany’s biggest steel producer. We all know: this is an important milestone on the road to a green metals industry.”

Tekin Nasikkol, Chairman of the General Works Council at thyssenkrupp Steel: “Today marks the start of the green, carbon-neutral future for thyssenkrupp Steel Europe AG. This marks a historic day for all of our more than 26,000 colleagues, and one on which we are sending several powerful messages at once. Firstly: As the beating heart of North Rhine-Westphalia’s economy, the steel industry has a CO2-free future. Secondly: We are creating long-term job security for the Duisburg location, our workforce, and indirectly for tens of thousands of jobs in processing companies in North Rhine-Westphalia. And thirdly: We are proving that we are not an “old economy” – we are becoming pioneers for the “green economy” in Germany and ensuring that our customers also become more sustainable.”

Sören Link, Mayor of Duisburg: “This historic investment is a giant step on the road toward green steel. At the same time, it represents a commitment to Duisburg as a business location and a commitment to innovation and climate change mitigation. We in Duisburg continue to work on becoming the most climate-friendly industrial city in Germany!”

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