Nel Hydrogen Electrolyser AS, a division of Nel ASA, has received a purchase order for a 20MW alkaline water electrolyzer from Ovako, a leading European manufacturer of engineering steel. The electrolyzer will be installed at Ovako’s existing plant in Hofors, Sweden. The fossil-free hydrogen will replace the use of fossil propane gas currently used in the heating furnaces.
We are excited to announce the delivery of electrolyzer equipment to Ovako. There is huge potential in reducing CO2-emissions from steel-heating processes through green hydrogen. We look forward to working with Ovako and its partners to further develop fossil-free steel production.
The purchase order has a contract value of approximately €11 million with equipment delivery in late 2022. The electrolyzer will produce oxygen and hydrogen for Ovako’s steel-heating process and is a major step towards zero-carbon emission steel production.
The conversion to hydrogen will enable Ovako to reduce its CO2 emissions for steel production in Hofors by 50%.
In June we announced our collaboration with the Volvo Group, Hitachi Energy, H2 Green Steel and Nel Hydrogen with the purpose to invest in fossil-free hydrogen in Hofors. An investment that also got the support from the Swedish Energy Agency. We are very pleased to have reached this important milestone. The electrolyzer technology will enable us to eliminate CO2 for heating steel before rolling.
Ovako is a leading European manufacturer of engineering steel for customers in the bearing, transportation and manufacturing industries, and is a subsidiary of Sanyo Special Steel and part of the Nippon Steel Corporation Group. The company has geographical presence in Europe, North America and Asia, and a steel product line that includes niche products and customized solutions.
Ovako’s production is fully scrap-based, with more than 97% of all iron and alloys used as input material being recycled. The electricity used comes entirely from fossil-free sources. Taken together with efficient processes and many other actions, such as the conversion of heat treatment, these factors mean that Ovako’s carbon footprint from crude steel production is 95% below the global average.
At present, global emissions for the industry are estimated at 1700 kg of CO2 per tonne of crude steel. By contrast, the Ovako figure is on average around 90 kg of CO2 per tonne – vastly lower.
When reviewing these figures in greater detail, Ovako found that the heating of steel offered a very important step towards the carbon neutrality of finished steel products—not just the crude steel. Therefore, Ovako embarked on the hydrogen project together with support from the Swedish Energy Agency, Volvo Group, Hitachi ABB Power Grids Sweden, H2 Green Steel and Nel Hydrogen. Ovako sees this as an opportunity to reduce its core emissions by 50% or more, and at the same time create synergies that benefit society on a broader level.
To support its climate initiatives and new technology investments, Ovako will add a climate surcharge on its steel from January 2022.