Lhyfe and UGITECH, a subsidiary of Swiss Steel Group, have announced the signing of a memorandum of understanding for the creation of a green H₂ production unit near Ugitech’s Ugine site (Savoie, France), to decarbonize part of the steelmaker’s industrial operations and help decarbonize local mobility.

This site, which is to be located in the heart of the French Alps where the 2030 Winter Olympics will be held, should also contribute to a sustainable model of winter tourism. This is the first agreement in Europe to replace fossil fuels with green H₂ in the stainless-steel sector.

As part of its roadmap for decarbonizing its business, Swiss Steel Group, one of the world’s largest producers, processors and distributors of long special steel products, has decided to use green H₂ at the Ugitech plant in Ugine, to replace the natural gas used in some of its thermoprocessing equipment (burners, reheating furnaces, heat treatment furnaces, etc.) and thus decarbonize part of its industrial processes. The steelmaker, which produces around 200,000 tpy of steel, has selected Lhyfe to support it in this energy transition. This project could avoid emitting 16,000 tpy of CO₂.

Lhyfe, which is signing its first memorandum of understanding with a steel manufacturer, already has three production sites and is currently building several sites in Europe.

Lhyfe plans to install a green H₂ production unit with a capacity up to 12 tpd (a maximum electrolysis capacity of 30 MW), at Ugitech’s Ugine plant. This green H₂ would be used mainly at the Ugitech plant, supplied via a pipeline. Lhyfe would also supply H₂ to local mobility and industry players, to help develop the local H₂ ecosystem, particularly in the run-up to the 2030 Winter Olympics.

The two partners are now entering the feasibility study phase of the project. Implementation of the project will be subject to the conclusions of this study, the granting of operating licenses and building permits, and financial investment decisions.

Philippe Desorme, Vice Chief Executive Officer at Lhyfe said, “We are delighted to sign this memorandum of understanding with Ugitech, whose commitment to decarbonization we commend. The steel sector is a major consumer of fossil fuels and is one of the industrial sectors that should be decarbonized as a priority.

“The energy transition is going to become increasingly necessary to ensure the long-term survival of our industries, and green H₂ is emerging as one of the pillars of this transition. It can and must now be deployed as quickly as possible, including in the steel sector.”

Frédéric Perret, Director of Development at Ugitech said, “Ugitech is coordinating the HYDREAMS project, which aims to demonstrate the feasibility of substituting natural gas with decarbonized H₂ in thermal steel transformation processes (reheating and heat treatment furnaces).

“HYDREAMS has nine European partners and has received a grant from the European RFCS fund. Using laboratory tests and industrial demonstrators, this project, which started in April 2023 and ends in October 2027, will verify that H₂ combustion will have no negative impact on processes and products.

“The next step is to roll out this new solution to all systems for which direct electrification is not a compatible option. This is the purpose of this MoU with Lhyfe.”