Voestalpine to invest 1.5 billion euros in CO2-reduced steel production

March 22, 202310:15 AM UTCUpdated ago

An illuminated logo of steelmaker Voestalpine stands in front of the steel plant Donawitz in Leoben, Austria, August 09, 2019. REUTERS/Lisi Niesner

March 22 (Reuters) - Voestalpine's (VOES.VI) supervisory board has approved an investment of 1.5 billion euros ($1.62 billion) in CO2-reduced steel production as part of a move to become carbon-neutral by 2050, the Austrian specialty steelmaker said in a statement on Wednesday.

Steel production accounts for about 7% to 9% of global carbon dioxide (CO2) emissions, so efforts to reduce them is one of the key targets in the fight against climate change.

Two electric arc furnaces are to be built in Voestalpine's plants at Linz and Donawitz by 2027, and are foreseen to replace one blast furnace in each of these locations by 2030.

Voestalpine has already secured 100,000 tonnes of green steel in orders, Chief Executive Officer Herbert Eibensteiner said in a call following the announcement.

Though the company expects to receive funding for the electric arc furnaces, it still anticipates having to assume the majority of costs, he added.

The new furnaces will enable Voestalpine to produce around 2.5 million tonnes of CO2-reduced steel per year, thus cutting its Co2 emissions by up to 30% and Austria's overall emissions by 5%, according to the company.

($1 = 0.9284 euros)

Reporting by Tristan Chabba and Anastasiia Kozlova in Gdansk, Editing by Friederike Heine