Indonesian, Australian firms team up on zero-emission steel

Leading private Indonesian steelmaker PT Gunung Raja Paksi Tbk (GRP), a member of Gunung Steel Group, is working towards a greener, more inclusive future, with a plan to reduce carbon emissions from the steel industry by replacing natural gas with green hydrogen produced on site using Australian technology. The Indonesian and Australian governments are backing the initiative, with a technical feasibility study now underway through the government-supported business development program Katalis.

If successful, the plan could see GRP replace natural gas at its plant in Cikarang, West Java, with green hydrogen sourced from Australian green energy company Fortescue.

The Technical Feasibility Study was foreshadowed in GRP and Fortescue’s memorandum of understanding signed at the B20 summit in Bali in November 2022. Under the MOU, the two parties agreed to investigate how green hydrogen and green ammonia supplied by Fortescue could be used to help decarbonise GRP’s steelmaking factories, as well as offtake opportunities. These could aid GRP’s ambition to achieve full operational carbon emission reduction in its existing processing plant by 2030 and carbon neutrality by 2050.

Steel production is energy intensive, requiring substantial amounts of gas to power production plants.  Long-term, the plan could see the companies working together to develop a green hydrogen plant within GRP’s steel manufacturing plant in Cikarang, which spans more than 200 hectares. The green hydrogen produced in this plant would potentially replace the natural gas currently used in GRP’s downstreaming process and ensure continued efficiency.

Fortescue is providing technical input into the Katalis-funded study, which will analyse the potential of replacing the burning of carbon-emitting natural gas at GRP’s stationary combustion steel manufacturing operations with green hydrogen gas.