Germany’s largest steel maker, Thyssenkrupp Steel, expects costs to rise in the construction of its green steel plant in the western city of Duisburg.
“With projects of this magnitude, this cannot be completely ruled out. Everyone involved is aware of this,” Ulrich Greiner Pachter, project manager for the construction of the plant, told the Westdeutsche Allgemeine Zeitung (WAZ) newspaper on Tuesday.
“The construction work – carried out jointly by Thyssenkrupp and SMS – has a contract volume of more than €1 billion [$1.17 billion],” Greiner Pachter said. “It is in the nature of things that not everything runs smoothly on the construction site every day.”
The company is planning for a “risk buffer” to cover possible additional costs.
In addition, there is the potential for increases in operating costs.
“I see the biggest challenges primarily in the operating costs of the plant and less in the construction itself,” Greiner Pachter told the WAZ. “This particularly concerns energy costs and the question of whether and when enough green hydrogen will be available at affordable prices.”
The German government and the state of North Rhine-Westphalia have pledged up to €2 billion for the construction of a direct reduced iron (DRI) plant. Thyssenkrupp intends to contribute €1 billion of its own funds.