Developer Modon signs deal for UAE green steel

Modon

• ‘Tentative’ agreement with Emsteel
• Steel plant uses solar energy
• Questions over cost

Abu Dhabi property company Modon is poised to be the first customer of a UAE pilot project to make sustainable steel with green hydrogen.

Modon has entered a tentative agreement to purchase the more environmentally friendly construction material from Emsteel Group, which has been manufacturing it through a partnership with the Emirati renewable energy company Masdar.

“By integrating green steel into our projects, we are taking a significant step towards reducing our carbon footprint and supporting the UAE’s green targets,” said Ibrahim Al Maghribi, chief executive of Modon Real Estate.

The production of conventional steel is estimated to be responsible for eight percent of global carbon dioxide emissions, and nearly a third of all CO2 produced by the construction industry.

The Emsteel-Masdar pilot uses solar energy to power net-zero hydrogen electrolysers and burns the hydrogen, rather than natural gas, to extract iron from iron ore as part of the steel-making process.

Saeed Alghafri, CEO of Emsteel’s subsidiary Emirates Steel, said: “As the first steelmaker in the world to capture its CO2 emissions, and the first steelmaker in the Mena region to demonstrate green hydrogen for green steel production, we believe that our partnership with Modon will play a key role in building on our efforts to decarbonise industry at scale.” 

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The companies did not provide any other details about how and when the new green steel would be incorporated into Modon’s projects.

Modon has largely been focused on projects in Abu Dhabi. However, in October it was appointed by the Abu Dhabi sovereign wealth fund, ADQ, as the developer for the planned multi-billion dollar resort and residential destination in Ras El Hekma, Egypt. ADQ is one of Modon’s largest shareholders. 

The main problem with green steel is that, as with green cement, the cost of production is as much as 25 percent higher than for “standard” steel, which raises questions about the potential for the material to be adopted at scale.

In addition, the availability of green hydrogen to fuel the production of green steel is in doubt, as the Western world cools on further development of green hydrogen production because of concerns about price and demand.