Třinecké železárny is launching the largest investment in the Czech steel industry since the 1980s.

Třinecké železárny, the only steel producer in the Czech Republic is facing its largest investment in modern history. To meet the Green Deal targets, it must change its current steel production technology. As a result, CO₂ emissions will be reduced by 55% compared to 1990. This is the largest investment in the Czech steel industry since the 1980s.

The greening of steel production requires investments in new technologies amounting to approximately EUR 1 billion. The most significant and largest investment is the construction of an electric arc furnace, which will consume the majority of the planned amount and replace production in one of the two blast furnaces, whose operation the company will shut down.

"The project will allow us to continue producing a strategic material without the obligation to pay extreme costs for emission allowances, whose free allocation will gradually be phased out. It will not bring us a higher production volume, increased employment, or added value. However, we will meet the demanding requirements for low-emission production. Without significant subsidy support, the project is not feasible," said Roman Heide, CEO of Třinecké železárny. He also considers the short timeframe to be critical, as the company must implement the construction of the key technology under the current subsidy conditions while maintaining full operation of the steelworks.

Since 1996, Třinecké železárny has invested more than CZK 10 billion in environmental improvements. An additional CZK 40 billion has been allocated to the company's development and modern steel production technologies.

"Last year in March, we signed a memorandum with the Czech government, which we perceive as the government standing behind us in decarbonization and supporting us. This gives us the confidence to proceed with and carry out the investments. We are applying for state support in the first quarter of this year." said Roman Heide, CEO of Třinecké železárny. The subsidy support, which is in line with subsidies in neighbouring European countries, is approximately 70%.

According to experts, the key factors for the future functioning of new technology and production in this way will be the availability of zero-emission energy at competitive prices, protection of the European market, and the availability of scrap on the European market, as a key raw material that is currently being exported in large quantities.

"The transformation program of Třinecké železárny is crucial for maintaining the strategic autonomy of the EU and the Czech Republic, ensuring the resilience of value chains for clean technologies, and preserving quality domestic jobs. According to Oxford Economics, each job in the European steel industry creates almost seven additional jobs in the broader economy." said Axel Eggert, Director General, The European Steel Association (EUROFER).

"Our global competitors export millions of tonnes of cheap and carbon-intensive steel to the EU market, which is produced using unfair trade practices, does not comply with binding decarbonization or environmental targets, and fails to meet global labor standards. The successful transformation of Třinecké železárny requires full support from the Czech government. This should align with the EU's goal of stopping global overcapacity in steel through effective trade protection measures, ensuring affordable electricity, and securing financing during the transformation. State subsidies for similar decarbonization projects in the steel industry in Europe have already reached nearly EUR 15 billion, with the average subsidy per project amounting to EUR 1 billion. Comparable support for a project in the Czech Republic would come at the right time for us to achieve our common goals in circular economy, decarbonization, and energy security," emphasized Mr. Eggert.

According to Axel Eggert, the demand for scrap metal, which is a strategically important commodity for the EU's green transformation and energy security enabling a fully circular economy, will massively increase for steel production through electric arc furnaces.

"Currently, there is no concept for the strategic management of scrap: in 2023, nearly 19 million tonnes of European scrap were exported to third countries, where there are no or much lower environmental and labor standards. This represents a lost opportunity to save 35 TWh of electricity and 32 million tonnes of CO2 annually. For comparison, the Czech Republic consumed 57 TWh of electricity and emitted 83 million tonnes of CO2 in 2023," he concluded.

Key Transformation Projects of the Třinecké železárny

• New Electric Arc Furnace is a key investment that will replace half of the current production, amounting to 1.3 million tonnes per year. The process is based on melting scrap using electric energy, increasing the plant’s total electricity consumption by approximately 30% from the current 1 TWh. The company plans to start construction in 2026 and complete it by December 2028. The project includes a wide range of infrastructure developments, from building a new scrap management system and connecting an ultra-high voltage supply from the main transmission network, including a transformer station, to necessary demolitions, construction of several new halls, relocations, and other related works.

 

• Emission-Free Iron Ore Briquetting Line will reduce CO₂ emissions by 70,000 tonnes per year, equivalent to the emissions of 19,000 passenger cars. The construction costs for the line will reach nearly CZK 1 billion, with subsidy support from the Modernization Fund exceeding 50%. The cold briquetting technology is unique in Europe and has no precedent in the metallurgical industry. Construction will begin in the spring of this year, with operations set to start in 2027.

 

• Combine-Cycle Gas Turbine will facilitate the transition from coal to a more environmentally friendly energy source. This investment is crucial for reducing CO₂ emissions. The plant utilizes a combined cycle gas process with the capability to use waste heat for production and hot water supply.

About Steel

Steel Production is a strategic industrial sector and is essential for the functioning of modern society. Steel is a key component of many low-emission and zero-emission solutions, from railway transportation and construction to new energy systems, security, and national independence. Steel is the commodity of the future. It is a 100% recyclable material used across all industrial sectors as well as in everyday products.

About the Třinecké železárny Group

Třinecké železárny are the largest steel company in the Czech Republic. Last year, they produced over 2.4 million tons of steel. The main products of the company include long rolled products such as wire rod, special bar steel, drawn steel, rails, wide steel, seamless pipes, and steel semifinished products. Including detached operations, Třinecké železárny employs nearly 6,800 people. The company is the flagship of the Moravia Steel Group, which employs 12,000 people.