“It is our responsibility to contribute to CO2 reduction”

At the wire & Tube fair in Düsseldorf in April 2024, ecoMetals TV had the opportunity to speak with Dr. Thomas Hansmann, CTO of the SMS group. Below is a transcript of the interview in which Hansmann outlines the ways in which the steel industry can achieve the goal of Net Zero. Hansmann also emphasizes the importance of artificial intelligence on the path to decarbonization.

stahl.: Mr. Hansmann, the focus of our conversation today is on the question: “How can we achieve the reduction of the CO2 footprint with the goal of Net Zero? We know that there is not just one way to reduce CO2. What paths is SMS taking?

Dr. Thomas Hansmann: First of all, thank you for the opportunity to talk about this topic. As you mentioned, there is no single way to decarbonize the steel industry. Fortunately, we are using various technical options, each of which works within its own scope. The positive thing is that a large majority of our customers have decided to decarbonize, and many initiatives and projects are already being implemented. We are moving forward, and this movement is the most radical change the steel industry has ever experienced.

stahl.: One could certainly say it is the biggest transformation in the era of industrialization.

Hansmann: I believe so too. We don’t need to convince anyone in the steel industry that we need to decarbonize to survive. It is our responsibility to contribute to CO2 reduction. But the implementation depends on what is currently technically feasible.

stahl.: For example, what happens when you completely rebuild a plant? You are currently working on various flagship projects.

Hansmann: Exactly, for example, in Sweden. There, we have the opportunity to design a steel plant from the ground up for H2 Green Steel, exactly according to the requirements of the plant operator. H2 Green Steel is the first steel plant in the world to use hydrogen in the production of green steel. To do this, green hydrogen must be generated with the help of green electricity. The plant is a combination of a direct reduction plant and an electric arc furnace. Unfortunately, such conditions are currently only available in Sweden.

stahl.: So what do we do with the existing steel plants?

Hansmann: In Europe, most large steel plants are opting for the combination of direct reduction and electric arc furnaces. In the first phase, the operators use natural gas for direct reduction. However, the technology is designed so that 100 percent hydrogen can be used in the future. We are currently building such a flagship project for thyssenkrupp Steel in Duisburg. This follows the logic that there are differences between melting in the arc furnace and melting in the electric reduction furnace, depending on what is fed into the direct reduction module. We have already seen many such projects in Europe. Not only thyssenkrupp, but also Saarstahl, Salzgitter, or ArcelorMittal have announced similar projects. The problem, as always, is the availability of green and economically attractive hydrogen.

stahl.: How do you assess the future availability of hydrogen?

Hansmann: That’s hard to judge. Investment is currently being made in the distribution network for hydrogen. And we will see where we stand in 2026 when the plant goes into operation. But it’s not just about availability, it’s also about costs. Economically attractive hydrogen will be produced outside of Europe. And that brings up another point: How do you transport the hydrogen from where it’s produced to where it’s needed? We’re all familiar with the discussions about ammonia, methanol, ethanol. There are various concepts, and as a technology provider, we are trying to find ways to handle the different options and incorporate them into our processes as effectively as possible.

stahl.: But your credo is: “We can adapt to our customers. Whether it’s ammonia, hydrogen, or something else, we can implement the right solution.”

Hansmann: It’s not enough to wait for the day when hydrogen is freely available. We need to find interim solutions for decarbonization. That’s why we’re working intensively on technologies that make it possible to continue operating a blast furnace while reducing CO2 emissions by 50 to 70 percent. There have to be intermediate steps to give the steel industry and our customers the chance to absorb the investments. We want to create the possibility to drastically reduce the CO2 emissions of a blast furnace. In the future, we can work towards a second transitional step, which may come when the availability of hydrogen or something else is assured. But here and now, we can already make progress.

stahl.: In which direction?

Hansmann: The idea is to electrify the operation of a blast furnace to reduce CO2 emissions as much as physically possible. This is an important step forward. And if we want to achieve zero emissions, then we have to talk about carbon capture and utilization because the remaining CO2 needs to be eliminated from the exhaust gases. We don’t have our own technology for carbon capture and utilization, but we know the gases, so we can handle them. That means: It doesn’t have to be 100 percent hydrogen in the future. We need to create a mixed form of different solutions. And we are now seeing increasing acceptance in politics because people understand that we need to do something if we want to have a positive impact on climate change.

stahl.: We are here at wire and Tube, where many of your customers’ customers are meeting. What is the message for them? How can they continue the path to decarbonization?

Hansmann: It’s clear that the greatest potential is upstream. If the downstream operators use an arc furnace to produce long products, they are fortunately already one step ahead because they need to consume fewer fossil fuels. We offer ways forward here. The use of hydrogen in combustion processes is also necessary. One of the most important features is energy optimization. Even today, there is enormous potential in the organization of a steel plant to minimize energy consumption through digitization.

stahl.: Digitization as a facilitator of decarbonization. What is your concept at SMS group?

Hansmann: We are working with VIRIDIS Green-Tech Investment AG. They develop concepts not only for simulating energy and media flows in a steel plant but also using artificial intelligence that predicts what will happen in the next hour to optimize consumption, costs, or CO2 emissions. Our experience shows that with digitization, we can already optimize energy consumption by up to 10 percent.

stahl.: Dr. Hansmann, thank you very much for the conversation.