In the future, Ørsted will be the first energy company to use lower-emission steel from Dillinger (stock company of Dillinger Hüttenwerke) in offshore wind farms. The two companies' declaration of intent also aims to support investments in new, lower-emission steel production.
Ørsted and the Dillinger Group will strengthen their partnership in the future to procure Dillinger's first lower-emission heavy plate for offshore wind power foundations. Dillinger, the leading manufacturer of heavy plate in Europe, wants to offer Ørsted the first production of lower-emission steel in the future - subject to delivery options and conditions.
Steel for monopile foundations
The steel is used for so-called monopile foundations, which are mainly used in offshore wind farms. Ørsted plans to purchase lower-emission steel from the Dillinger factory in Dillingen, Saarland, from 2027/28. Creating early demand is critical to driving investment in these technologies and the decarbonization of the steel industry.
“At Ørsted, we have closer supply chain connections than any other offshore wind developer, and we use these connections to support our business and the overall green transformation. Long-term offtake agreements like these are key to decarbonizing emissions-intensive materials like steel because clear demand signals are needed to drive investment in technologies needed to decarbonize production. We are pleased that with this declaration of intent we can support Dillinger in the transformation towards lower-CO2 steel production in Europe. It is an agreement that also allows Ørsted to further diversify our supply chain, secure capacity and meet expected future customer demands,” said Virginie Van de Cotte, Head of Purchasing at Ørsted.
As part of a supply agreement concluded in 2022, Ørsted has been purchasing significant quantities of conventionally produced steel from Dillinger since 2024. This gives the company large-scale access to the most important raw material for offshore wind and at the same time offers the necessary support for Dillinger to advance investments in new, lower-emission steel production.
Reduced emissions
Taking current technological developments into account, the reduction in production-related CO2 emissions is expected to be around 55-60% compared to conventional heavy plate production. Through the Memorandum of Understanding (MoU), Ørsted supports Dillinger's efforts to advance the decarbonization of steel production. Furthermore, this can create the opportunity to meet the expected qualitative criteria in upcoming offshore wind auctions across Europe. The two companies' agreement follows the European Union's recent adoption of the Net Zero Industry Act, which makes non-price criteria mandatory in renewable energy auctions in the EU.
With a share of 21%, the foundations of wind turbines are one of the largest sources of CO2 emissions in the environmental balance of an offshore wind farm. Reducing these emissions is key to achieving the science-based net zero targets for 2040 to which Ørsted has committed.
“The agreement with Ørsted proves that steel made in Germany is relevant for the success of the climate and energy transition and that steel has a future here. With the support of the German federal government, we are now investing in converting our production facilities in order to be able to produce CO2-reduced steel from 2027,” says Stefan Rauber, CEO of Dillinger.
“We would like to thank Ørsted for their trust in our know-how and the high quality of our steel. The Dillinger team is proud to contribute to the further expansion of renewable energies with its innovative products,” adds Danny van der Hout, Head of Sales at Dillinger.
Partnership supply chain
The long-term offtake agreement is an example of how Ørsted uses a strong partnership approach to advance sustainable solutions for environmentally friendly expansion with suppliers. Ørsted is the first company in the renewables industry with a scientifically recognized net zero target.
Ørsted launched an industry-leading supply chain decarbonization program in 2021. To achieve this, the company works closely with strategic suppliers to reduce emissions in the manufacturing phase of renewable energy components. Today, two thirds of Ørsted's strategic suppliers already cover their electricity consumption with green electricity. In June 2023, the company also announced decarbonization projects for all major offshore wind components - a first in the industry.
