Spain has approved a €60 million grant [1] from EU funds to support the construction of a hydrogen-powered steel mill, recognized by the World Economic Forum as one of the most significant industrial decarbonization projects worldwide. This initiative, led by Hydnum, represents a crucial step toward advancing low-carbon steel production in the country.
Hydnum was specifically founded to build this zero-carbon facility, which is planned for Puertollano, a town in Castile–La Mancha, approximately 100 kilometers south of Madrid. The plant aims to use green hydrogen to manufacture sponge iron, which will then be combined with scrap metal in an electric arc furnace to produce up to 1.5 million tonnes of rolled steel annually. Future phases will expand this capacity to 2.6 million tonnes. Hydnum has emphasized that the facility will feature an advanced digital control system incorporating computer vision, digital twins, predictive analytics, and AI to enhance efficiency, safety, and quality.
Despite the heavy reliance on automation, the project is expected to generate around 1,000 direct jobs. Hydnum has secured a degree of financial stability through a seven-year, €1 billion agreement to supply steel to Spanish fabricator Gonvarri Industries. This long-term deal is seen as a major step in transitioning to a more sustainable industry. The company’s CEO, Eva Maneiro, reaffirmed their commitment to reshaping steelmaking practices, stating that each tonne of green steel produced will contribute to meaningful industrial change.
The development will be carried out in partnership with several industry leaders, including Hamburg-based investment firm Helvella Capital, engineering company Siemens, Madrid-based renewables developer ABEI Energy, and Spanish steel energy specialist Russula. Their collaboration is expected to drive technological innovation and accelerate project execution.
The scheme is currently awaiting regulatory approval, with construction anticipated to begin by the end of 2025 if granted. The funding for the project comes from Spain’s PERTE program, an initiative supporting strategic projects for economic recovery and transformation. This program is backed by the €750 billion Next Generation fund, created by the EU to assist member states in recovering from the economic impact of the COVID-19 pandemic.
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[1] Spain’s ‘globally important’ green steel plant gets €60m https://www.globalconstructionreview.com/spains-globally-important-green-steel-plant-gets-e60m/