US Steel Košice (USSK) is investing about 900 million euros in the construction of a new electric arc furnace and an air separation unit after signing an agreement with the Slovak government to provide a grant to partially cover the costs.
The commissioning of an electric arc furnace with a capacity of 1.6 million tons per year is scheduled for 2030.
"The investment strengthens the long-term prospects of steel production and employment in Kosice, supports a reliable regional customer base by offering high-quality steel products with gradual CO2 reduction, and confirms USSK's active role in decarbonization and the continued functioning of the Slovak industry," the company said in a statement.
The electric arc furnace will work together with existing blast furnaces. This, according to USSK, will help maintain stable supplies of high-quality steel and at the same time significantly reduce carbon dioxide emissions. The new air separation unit should ensure more reliable operation of the enterprise, increase energy efficiency and further reduce CO2 emissions.
The grant amount will be approximately 350 million euros, of which 310 million euros will be allocated for the electric arc furnace project and 40 million euros for the air separation unit. The financing will be allocated through the EU Modernization Fund, which is topped up by revenues from the European emissions trading system.
The company notes that USSK, being the largest industrial participant in the Slovak EU ETS system, makes the largest contribution to these revenues in the country.
USSK says the project will help preserve industrial potential, strengthen supply reliability, and support the competitiveness of Slovakia and the Central and Eastern European region.
At the same time, the company expects that Europe will rely more heavily on the domestic market and support manufacturers investing in modern decarbonization technologies and producing high-tech products in the region.
Earlier, Nippon Steel announced the transfer of USSK to direct ownership, and from October 1, the division will be renamed Nippon Steel Slovakia.
The project should also take advantage of the tightening of the EU import regime and the high concentration of automakers in Central and Eastern Europe.