Provaris Energy welcomes €3 billion EU subsidies for hydrogen-based ‘green steel’ in European plants By Proactive Investors
© Reuters. Provaris Energy welcomes €3 billion EU subsidies for hydrogen-based ‘green steel’ in European plants
As demand for hydrogen in the European Union heats up, Provaris Energy Ltd (ASX:PV1, OTC:GBBLF) is well-positioned to capitalise.
Hot on the heels of independent findings from the Scottish Government that validated PV1’s compression and shipping strategy, the EU has given the green light for the French and German governments to offer up €2.85 billion in subsidies for renewable hydrogen-based green steel projects.
While the plants will use low-carbon blue hydrogen and hydrocarbon-based gas for the first phase of development, the idea is to ramp up green hydrogen use over time, with subsidies directly linked to how much green hydrogen the companies are using.
Provaris’ opportunity
The German green steel project is owned by Thyssenkrupp (ETR:) Steel, Germany’s largest flat steel manufacturer.
The company is targeting the premium green steel market with its tkH2Steel® project at Duisburg and has now launched a tender for up to 151,000 tonnes of annual low-carbon hydrogen supply – either blue or green hydrogen.
It represents a powerful message that hydrogen will indeed serve as an important part of the net-zero energy mix in future, as some of Europe’s largest steelmakers invest in hydrogen-based green steel.
“Provaris is particularly well positioned to capitalise on this tender as it has MoUs with two of Germany’s major energy utilities to evaluate compressed green hydrogen to Germany, including the state-owned giant Uniper,” Provaris Energy managing director and CEO Martin Carolan said.
“Importation of energy into Germany requires a government permit and at the same time, Thyssenkrupp Steel will have a preference for dealing with major utilities with strong balance sheets that already supply to this facility.
“Therefore, Provaris’ existing relationships with the two German utilities are expected to be a major competitive advantage for the company.”
Rapid development of new projects
The steel industry represents between 7.2% and 11% of global carbon emissions at present, and it’s predicted 1 million tonnes of hydrogen per annum would be needed to de-carbonise Germany’s steel industry alone.
If the rest of the world’s steel industry follows Germany and France’s lead – and it’s looking fairly likely in the EU, at least – a new hydrogen offtake market moving vast amounts of the gas may emerge within the next few years.
Thyssenkrupp Steel’s tender is seeking a 10-year contract beginning in 2028. That start date represents an expectation of rapid development of its tkH2Steel® project, offering only about three years to construct and deliver the project.
Provaris believes this rapid advancement to financial investment and tender decisions will be a trend within the industry, stimulating the rapid growth of new green hydrogen projects in Europe, which Provaris is well positioned to benefit from as a joint venture (JV) partner or efficient shipping solution.
