Tata Steel said on Tuesday it will invest more than €65 million in hydrogen-based steel manufacturing in the Netherlands. Hydrogen has the potential to decarbonise steel manufacturing.

Tata Steel has signed agreements with three companies – McDermott, Danieli and Hatch – to further technically prepare for the production of hydrogen-based steel in the Dutch city of Ijmuiden.

All three companies have their specific capabilities and need to work together to help Tata Steel make hydrogen-based steel.

“The first step, with a development cost of over €65 million, will result in an engineering package that will set the stage for final permitting and project planning,” the company said in a statement.

The entire project is led by Tata Steel’s in-house project and sustainability teams, with close support from key delivery partners.

McDermott is responsible for construction inputs and technical project management support. Danieli will oversee the engineering of the plant and provide the direct reduced iron (DRI) technology, the first step in the ironmaking process.

Hatch is the technology licensor for electric furnaces that melt DRI, helping to reduce oxygen levels further and thus improve the quality of the final steel. The REF and DRI factories are closely integrated to form an integrated production system.

“We recently signed an agreement with two ministries and the province of Noord-Holland on our future. To this end, we commit to being CO2 neutral by 2045 and reducing CO2 emissions by 35 to 40% by 2030.

This will be achieved mainly through the hydrogen route, in which blast furnaces are replaced by modern, clean steelmaking technology that uses hydrogen or natural gas instead of coal,” said Hans van den Berg, CEO of Tata Steel Netherlands.