Outokumpu invests in a biocarbon plant in Germany to further reduce its direct emissions

Outokumpu invests in a biocarbon plant in Germany to further reduce its direct emissions

Outokumpu, the global leader in sustainable stainless steel, is constantly looking for ways to further reduce climate impact throughout its value chain. Efforts to replace fossil raw materials with economically viable alternatives is a key element in this journey. The company has decided to invest EUR 40 million for building up a high quality biocarbon production plant in Germany. Approximately EUR 10 million of the capital expenditure is included in the CAPEX frame related to Outokumpu’s second strategy phase and the company remains committed to maintaining the maximum CAPEX frame of EUR 600 million between 2023–2025.

The plant will be built in the city of Sassnitz in the state of Mecklenburg-Vorpommern in Northeastern Germany, utilizing existing infrastructure and buildings at the Mukran Port. The planned annual production capacity is 15,000 tonnes of biocarbon⁽¹ using waste wood as raw material. The commissioning of the site is scheduled for the first half of 2026. The new plant will provide feedstock material for biocoke to Outokumpu’s pelletizing plant in Tornio, Finland, which is on schedule and expected to be completed mid-2025. Biocoke is used as a reductant in Outokumpu’s ferrochrome production.

Mukran Port in the state of Mecklenburg-Vorpommern in provides an ideal setting for Outokumpu’s brown-field investment project with excellent logistical connections both to Finland and central Europe. Photo courtesy of Fährhafen Sassnitz GmbH.

Approximately 50% of Outokumpu’s direct emissions could be reduced by replacing fossil coke with biocoke. Investments towards cutting these emissions are essential to prepare Outokumpu to reduce future costs as the free carbon allowances in the European Emissions Trading System are potentially phased out in the future. 

“We are proud that our stainless steel has the lowest carbon footprint in the industry⁽², and we are progressing steadily towards our target to reduce our emission intensity across our direct, indirect and supply chain emissions by 42% by 2030 from a 2016 base year. Currently, biocoke represents the best available technology to decrease our direct emissions and we are investigating also other innovations as well as the use of carbon capture technology to achieve further reductions,” says Stefan Erdmann, Chief Technology Officer at Outokumpu.

Outokumpu has established a roadmap to build up future supply for biocoke and it consists of a mixture of own production, external sourcing, and partnerships. With our pilot plants in Mukran Port, Germany and Tornio, Finland, Outokumpu can further develop the production process, side stream gas utilization and end-product. In addition to biocarbon, side stream gases will be used at the plant in the Mukran Port to generate heat and electricity which offers a financially attractive business case and higher value use for the biomass. 

“Biomass-based raw materials offer exciting possibilities for Outokumpu to cut direct emissions. I’m proud of our team’s innovative thinking in developing an industrial concept that ensures technical readiness and financial viability for the new investment, driving progress in the green transition today. We want to take an active role in developing the biocoke market which will give us scale-up and new business opportunities also going forward, says Timo Huhtala, General Manager, Outokumpu EvoCarbon, unit responsible for building up biocoke supply and investigating new technologies and investments opportunities in carbon capture and new energy projects at Outokumpu.

¹⁾ Raw materials produced using biomass such as waste wood include biocarbon and biocoke. In the first stage, the biomass is burnt in a pyrolysis process into biocarbon and in the second stage it can be pelletized into biocoke (i.e., densified biocarbon). Biocarbon can be used to replace fossil coal or energy sources in different stages of stainless steel production whereas biocoke is specifically used as a reductant in ferrochrome smelting. Ferrochrome is needed to make steel stainless.

²⁾ Outokumpu’s stainless steel has up to 75% lower carbon footprint than the global industry average. Outokumpu stainless steel CO₂ emissions (2023): 1.52 kg CO₂e per kg of stainless steel. Global average CO₂ emissions (2023): 7 kg CO₂e per kg of stainless steel. (Outokumpu’s calculation based on data provided by CRU, worldstainless and Kobolde & Partners AB).

For more information: 

Investors: Linda Häkkilä, Head of Investor Relations, tel. +358 400 719 669 

Media: Päivi Allenius, SVP – Brand & Communications, tel. +358 40 753 7374 or Outokumpu media desk, tel. +358 40 351 9840

Outokumpu Corporation