Voestalpine board funds EAF conversions

The supervisory board of Linz, Austria-based steelmaker Voestalpine AG has approved 1.5 billion euros ($1.6 billion) in funding toward the installation of electric arc furnace (EAF) technology at two of its steel mill sites. The mills receiving the investments, which currently use blast furnace/basic oxygen furnace (BOF) technology, are in Linz and Donawitz, Austria.

The company says last year its board “gave the green light to conduct the preliminary work for climate-friendly steel production in Austria" and approval of the EAF investments is part of its Greentec steel plan.

“The plant and supplier decision will be made in 2023, construction will start in 2024 and commissioning of the two units will take place in 2027,” the company says.

The move has historical significance, as Voestalpine lays claim to having helped develop now widely used blast furnace/BOF techniques at its two Austrian mills. Voestalpine refers to the technique as the Linz-Donawitz (LD) steelmaking process.

The investment in EAFs will allow Voestalpine to reduce its CO₂ emissions by up to 30 percent starting in 2027, the company says.

“’Greentec Steel’ is Austria’s largest climate protection program,” says Herbert Eibensteiner, CEO of Voestalpine AG. “It will allow us to save five percent of Austria’s entire annual CO₂ emissions from 2027. We need to start this year if we are to meet our target of commissioning the two new electric arc furnaces in Linz and Donawitz in 2027.”

Eibensteiner says requirements for the next step include sufficient availability of “green” electricity at competitive prices and clarification of unresolved funding issues.

“The supervisory board has closely examined the Voestalpine decarbonization plan presented by the management board and unanimously gave it their enthusiastic approval,” says Wolfgang Eder, chair of the supervisory board. “This investment will secure the future of our two steel production sites in Linz and Donawitz over the long term and with it the future of our group.”

Compared with its current two-stage blast furnace/BOF route, in which liquid pig iron is produced in the blast furnace before being processed into crude steel in the BOF, an EAF uses electricity to produce crude steel in a single step.

The EAFs it is installing will use scrap, liquid pig iron and hot briquetted iron (HBI), with the mix adjusted according to quality requirements. Voestalpine says it will source most of the HBI it will melt from a direct-reduced iron (DRI) plant in Texas majority owned by Luxembourg-based steelmaker ArcelorMittal. Voestalpine holds a 20 percent stake in that facility.

“With this stake in the plant, last year we signed a long-term supply contract for 420,000 metric tons of HBI annually,” Eibensteiner says. “Having a secure supply of HBI and scrap as raw materials is a major competitive advantage for Voestalpine.”

Voestalpine says currently a large share of the scrap it uses is procured domestically, while the rest is primarily imported from Germany and Eastern European countries.

The two EAFs are being specified to allow Voestalpine to produce around 2.5 million tons of steel annually: 1.6 million tons in Linz and 850,000 tons in Donawitz. The company says it will use “green hydrogen as a key technology” at the sites.