Spain has approved a €60 million grant from EU funds for the construction of a hydrogen-powered steel mill, which the World Economic Forum has identified as one of the "five most important initiatives for decarbonising industry in the world", Global Construction Review reported.

Hidnum, which was set up specifically to build the zero-carbon plant, announced last year that it plans to build it in the town of Puerto Llanos in the province of Castilla-La Mancha, about 100 km south of Madrid.

The aim is to use green hydrogen to produce iron ore, which will then be mixed with waste in an electric arc furnace to produce up to 1.5 million tons of rolled steel per year.

In later phases of the project, this will be expanded to 2.6 million tons.

Hydnum claims that the plant will have a futuristic management system that will combine computer vision, digital twins, predictive analytics, and artificial intelligence to optimize safety, efficiency, and quality.

Despite the digitized management system, Hidnum believes the plant will create 1,000 direct jobs.

While other European steelmakers are affected by high energy prices and fierce competition from China, Hidnum has some security thanks to a seven-year, €1 billion steel supply contract with Spanish manufacturer Gonvari Industries.

Hidnum said the agreement was "an important step in the transition to a more sustainable industry."

CEO Eva Maniero added that her goal is "to lead the change with every ton of green steel we put on the market and with every innovation that challenges the conventional, to achieve an industry that is truly committed to the future of our planet."

The project will be implemented in partnership with the investment company Helvela Capital from Hamburg, the electrical engineering company Siemens, the renewable energy company ABEI Energy from Madrid, and the Spanish steel energy specialist Rusula.

The plan is currently awaiting regulatory approvals. If these are granted, construction is expected to begin by the end of 2025.

State aid is being provided under the Spanish PERTE program, which stands for "strategic projects for economic recovery and transformation." It is supported by the €750 billion Next Generation fund set up by the EU to help member states recover from the Covid-19 pandemic. |BGNES