“Then the herrings won’t come close to the shore anymore”
thyssenkrupp Steel CEO Bernhard Osburg talks about the Steel strategy and the green steel at its core, about what is already technically possible, what will be soon and where the greatest challenges still lie.
Felicia Mutterer: You are listening to the thyssenkrupp audiogram. Welcome back. In this tenth episode we are focusing on the topic of “green steel”. thyssenkrupp has set itself a big target: To make steel production climate-neutral by 2050. That’s an ambitious and important mission for everyone at thyssenkrupp and of course in particular for the CEO of the Steel segment, Bernhard Osburg. And he is our guest in this episode. I’m delighted you could join us. Hello!
Bernhard Osburg: Hello! Thank you for having me.
Felicia Mutterer: Mr. Osburg, coronavirus crisis, massive declines on the steel market, short-time work. How are you enjoying being CEO of the thyssenkrupp Steel segment right now?
Bernhard Osburg: You’ve mentioned a few good points that are having a huge impact on our day-to-day business at the moment. Fortunately we have managed to take suitable measures to protect the health of our employees – thank goodness! So we’re doing well there. But when we look at our figures we see that the crisis is putting us under intense pressure. But against this background, the transformation you just mentioned – the path to climate neutrality – naturally also offers enormous opportunities going forward. We also know that we have a strategy that we approved recently in March just before the pandemic began. And we believe it’s a good and feasible strategy, and that it is the right strategy. But we also know that we are going to have to do more because the world after the coronavirus is probably not going to be the same as it was before. So, to come back to your question: It is admittedly quite hard work at the moment but I’m really enjoying it. It’s a big and very challenging task, but I’m happy to be playing a key role.
Felicia Mutterer: With almost 20 million tons of CO2 per year, thyssenkrupp Steel is one of Germany’s biggest CO2 emitters. Is the company willing and able to do something about that?
Bernhard Osburg: We’re very willing – that’s already perfectly clear. We’re doing it because we want to make a major contribution to fighting climate change – that’s the idea behind the “New Green Deal” in Europe. We not only produce 11 million tons of steel in a normal year here, but also, as you rightly said, alongside these 11 million tons we unfortunately produce approx. 20 million tons of CO2. And even in an industrial region like North Rhine-Westphalia that puts us right at the top of the list. It makes us part of the problem – a big part – but naturally also represents a significant lever when it comes to a solution. And that’s why I believe we can also generate great opportunities from this. The technology required to transform our processes so that we can continue to do business on an almost CO2-neutral basis actually already exists. Now it’s more a question of how can it all be financed and how can it be realized? And: Do we have the necessary resources, in terms of both investment and the feedstocks needed to transform the process? If it can be done anywhere for Germany and Europe, then surely here.
Felicia Mutterer: Mr. Osburg, how are you aiming to achieve that? What does your strategy look like? You’re the boss, you must have something in your mind. Or on paper.
Bernhard Osburg: I do indeed have something in my mind and happily we also have something on paper. In fact we have more than just paper – we’ve already made a start. We took a large-scale Carbon2Chem test facility into operation two years ago. And in November last year we became the first in the world – at least as far as we know – to inject hydrogen into the blast furnace instead of coke, coal and PCI coal. We already started on this journey a long time ago. But in concrete terms: What does the strategy look like? I think it’s important to understand that the journey ahead of us has several phases. We are talking about a timeframe up to 2050. We have aligned our plan to the Paris climate targets and want to achieve neutral production by 2050. We’ve already taken the first step on this journey as here at this site we are already separating waste gases and turning them into chemical products that the chemical industry can use to make other products. Still on a reasonably small scale but we have already learned a lot about how to scale things and how to develop this technology further. The important next steps are: Firstly we will continue to modify one of our blast furnaces to work with less coal and more hydrogen so that in 2022 – which is no longer that far away! – we can market the first noteworthy tonnages of steel produced without generating CO2. But in all honesty the real game changer here will be succeeding in replacing one of the main products we use – namely the coal from which we produce coke. The fundamental idea is to replace this coal entirely, i.e. to completely replace the fossil fuels and reducing agents in our processes with hydrogen. That is really the core of this strategy: Replacing the blast furnace process with a direct reduction plant. Then the process will no longer generate CO or CO2, but instead just steam. And then we will have achieved what we are aiming for, namely green steel production.
Felicia Mutterer: Hydrogen sounds really green. But can steel production really be truly green? Or will it ultimately just become less gray?
Bernhard Osburg: To answer the first question of whether steel production can ultimately be green: Yes, it can. But it is also true – as you said – that this is dependent on enough green hydrogen being available. Allow me to explain a bit about the colors: “Green hydrogen” is hydrogen that has been produced via electrolysis, i.e. the separation of water into oxygen and hydrogen, using renewable electricity from solar or wind power. We are all agreed that we currently do not have the resources in Germany to produce the truly massive volumes we need. But we also know that policymakers are currently laying the groundwork to change this for Europe and for Germany. So we are very confident that in the 30 years ahead of us it will be possible to generate sufficient green hydrogen to enable the process to succeed. But we don’t have to wait until then. Instead, the technologies we want to use here and which have already been developed to a high level of maturity are designed in such a way that – let’s say we would start working with a direct reduction plant here next year – they can also run purely on natural gas in the first few years. And then we’re already in the realm of “gray hydrogen” because natural gas contains a relatively high proportion of hydrogen, around 27 – 30%. And that would already reduce emissions by 30% compared with coal. And then we can add more green – or even blue – hydrogen to the mix in the plant pretty much on a day-by-day basis as more becomes available. So waiting until sufficient green hydrogen is available is not a technical obstacle or even a necessity for us.
As this is an issue that keeps coming up, also in the political debate, perhaps you will allow me explain the kind of volumes we are talking about here to give you a feel for this topic. For our facility alone we would need approx. 750,000 tons of hydrogen per year. To give you an idea what that means: if we were to produce this volume of hydrogen, irrespective of where we do so and let’s just say we’d do that here… We would then need green electricity. To generate enough electricity to produce 750,000 tons of hydrogen, we would need 3,000 – 3,000! – of the most efficient wind turbines available.
Felicia Mutterer: And no-one wants to put them anywhere.
Bernhard Osburg: In Germany no-one wants to put them anywhere. And we can’t build them all off the coast because then the herrings won’t come close to the shore anymore. So there’s still a lot to do. And that’s just what our plant needs, although admittedly our needs are great. And I just mentioned that we also have a chemical industry, so we are also in competition. Everyone will attempt to replace fossil fuels with hydrogen. Even the auto industry is thinking about developing concepts involving fuel cells. So it is also important to understand why we are looking to the future with so much confidence: We are not aware of any process comparable with steel production where you can use one ton of hydrogen to save 25 tons – so a ratio of 1 of 25 – of CO2 emissions. That’s extremely efficient. And it’s why we believe that, to do something good to combat climate change, hydrogen – which currently represents a bottleneck – should be used where it offers the greatest benefit in terms of combating climate change. And there we’re right at the forefront.
Felicia Mutterer: Thank you Mr. Osburg.
Bernhard Osburg: Thank you, I enjoyed it.
Felicia Mutterer: That was part one of our interview with Bernhard Osburg, CEO of thyssenkrupp Steel. He’ll be back in the next episode too, when we will talk about what is needed from outside the industry, for example policymakers, to ensure green steel can truly be successful, also in economic terms.
My name is Felicia Mutterer, until next time!