‘Green hydrogen is now competitive with fossil fuels’ | ArcelorMittal among offtakers at massive 7.4GW project in Spain
HyDeal España, the first part of the 67GW HyDeal Ambition plan, will produce renewable H2 from 9.5GW of solar power and create an industrial hub to decarbonise steel, fertiliser and other products
Most gigawatt-scale green hydrogen projects that have been announced to date are somewhat speculative, focused more on production than usage — yet without guaranteed off-takers, developers will struggle to raise the necessary finance.
“The direct connection of mass-scale renewable hydrogen production and long-term bankable consumption create enormous value for the system,” said ArcelorMittal in a statement.
HyDeal España, a joint venture between Spanish gas grid operator Enagás, ArcelorMittal, Fertiberia and Spanish project developer DH2 Energy, will begin production of 200,000 tonnes annually by 2026, reaching full capacity by 2030, when it would reduce Spain's annual greenhouse gas emissions by 4%.
“We bring a historic message to all energy users: green hydrogen is not just about small and local expensive projects. It is now a full-fledged commodity, able to compete with coal, oil and natural gas in both costs and volumes, the perfect weapon at scale against the climate crisis and skyrocketing energy prices,” said Thierry Lepercq, the chief executive of DH2, who initiated the HyDeal projects.
“The world has changed in the past six months with the rise in gas and power prices,” he told Bloomberg, adding that the group hopes to secure several billion euros of financing by the summer to cover the costs of the first phase.
Javier Goñi, CEO of Grupo Fertiberia, said: “Based on HyDeal España competitive green hydrogen, the company will invest in a state of the art highly flexible green ammonia plant to cover the needs of our Avilés fertilizer site.
“This strategic development is another step to position Grupo Fertiberia as the fastest and most aggressive crop nutrition company to decarbonize, enabling to build for our clients the greenest product portfolio in the industry.”
ArcelorMittal announced plans last year to revamp its facilities in Gijon, northern Spain, to produce green steel.
Today, most new steel uses highly polluting coal to remove iron from iron ore, but hydrogen can also perform this role. And almost all ammonia-based fertiliser is currently produced by combining nitrogen from the air with hydrogen from unabated natural gas or coal.
“HyDeal España is a strategic alliance for ArcelorMittal which will give it access to the volume of green hydrogen required in order to progress on its roadmap towards the decarbonisation of steel production," said ArcelorMittal Spain chairman José Manuel Arias.