British oil and gas company BP has collaborated with German steel manufacturer thyssenkrupp Steel Europe to support the decarbonisation of steel production.

Under the memorandum of understanding (MoU), the firms will focus on developing a long-term supply of low carbon hydrogen and renewable power in steel production.

The two parties will explore supply options for blue and green hydrogen, as well as sign wind and solar power purchase agreements.

The partners also plan to jointly promote policies in Europe to support the development of green steel and low-carbon hydrogen.

In Germany, Thyssenkrupp Steel accounts for 2.5% of the carbon dioxide (CO₂) emissions, primarily at the Duisburg site where it operates coal-fired blast furnaces.

To achieve the 2045 climate-neutral steel production target, the company is planning to replace these blast furnaces with direct reduction plants utilising low-carbon hydrogen.

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BP regions, cities and solutions executive vice-president William Lin said: “As part of our strategy to provide a range of decarbonisation solutions to corporates, bp is already investing in and working to develop a portfolio of industrial-scale hydrogen projects in Germany, the Netherlands, Spain, the UK and Australia.

“With our aligned ambitions and complementary investments, thyssenkrupp Steel and bp can together help this hard-to-abate sector decarbonise faster.”

thyssenkrupp Steel currently has an annual production capacity of 11 million tonnes of crude steel. It aims to produce 400,000 tonnes of CO₂-reduced steel by 2025.

BP plans to produce green hydrogen ‎at its refineries in Lingen, Germany; Castellón, Spain; and Rotterdam, the Netherlands.

The company also intends to develop blue and green hydrogen production projects across the world.

Thyssenkrupp Steel chief technology officer Dr Arnd Köfler said: “The decarbonisation of the steel industry will require enormous quantities of low-carbon and in the long term green hydrogen. This will increasingly require the use of electricity from renewable sources.

“All this can only be achieved through a well-developed hydrogen infrastructure with a supra-regional pipeline network. The MoU is an important milestone for us to set the course with bp for a reliable supply of energy in the future.”