GFG Alliance Executive Chairman Sanjeev Gupta has signed a series of agreements with the Romanian government, national gas company Romgaz, and a local bank to help deliver its green steel project for the Galati steelworks, GFG said June 11.

Green steel is produced by melting scrap or direct reduced iron using natural gas or hydrogen. Scrap and/or DRI is melted in electric arc furnaces powered, where possible, by low-emission or renewable energy.

To realize this vision at its Liberty Galati plant in southeast Romania, GFG Alliance said over the next three-five years it would build a 2.5 million mt per year DRI plant initially powered by natural gas, but using hydrogen later on once the production of this new fuel became more cost effective.

Over the same period, GFG Alliance also plans to add two EAFs to cut emissions and dependence on imported raw materials dramatically. Compared with blast-furnace steelmaking, the EAFs would reduce CO2 emissions per ton of steel by up to 80%. Emissions could drop to almost zero once the DRI plant that will produce feedstock for the EAFs is switched to hydrogen from natural gas, making Galati the GFG group's first European primary steel plant to achieve carbon neutrality by 2030, the company said.

One of the EAFs will be used to cast slabs for Galati's plate mill and the other for direct casting of hot rolled coil. The furnaces' combined production capacity could reach 4 million mt/year, close to what Galati used to have before the 2008-09 financial crisis. Back in 2008, the mill made 4.5 million mt of steel.

Liberty Galati is still the largest integrated steel plant in Romania, although its capacity has since halved to 2 million mt/year as the plant operates just one blast furnace of the two it used to run over 10 years ago. It also has three basic oxygen furnaces but does not disclose their capacity and current output for commercial reasons.

Whether these furnaces will retire once the DRI and EAF units come on line or will be integrated in the new layout is not clear at this stage.

Decisions on how and whether they will work together with the new installations will be taken at a later date, according to the spokesman for the Liberty Steel Group, GFG Alliance's global steel manufacturing subsidiary.

He also declined to elaborate on how this reformation will restructure Galati's raw material input composition. "It is too early to comment on the requirements for the DRI/EAFs, while we do not comment on how much raw materials we use now and who we buy it from for commercial reasons," he said.

Galati produces a range of flat products (plates, coils, galvanized and organic coated coils) as well as welded tubular products shipped across the Balkans, Europe and Romania to a variety of industries, including shipbuilding, construction, oil and gas, automotive and renewables.

Apart from signing the memorandum of understanding with Romania's ministry of economy, energy and business environment enlisting the government's support for GFG's investment plans, Gupta also signed a MOU with the CEO of Romanian national gas company Romgaz, Adrian Volintiru. This provides the framework for a possible joint venture to build a gas-fired power plant within the area around Liberty Galati as well as renewable power units, according to Romgaz.