GravitHy Selects Hatch for Low-Carbon Hydrogen Iron Plant

Global engineering firm Hatch to deliver critical design phase

GravitHy has selected Hatch to deliver the Front-End Engineering Design for its low-carbon iron production facility in Fos-sur-Mer, France. The appointment represents a significant step toward establishing Europe’s first large-scale merchant iron facility powered entirely by green hydrogen. For UK businesses watching European industrial decarbonization, this project offers important signals about the emerging market for low-carbon steel feedstock.

The facility will produce 2 million tons per year of Direct Reduced Iron and Hot Briquetted Iron. These iron products serve as low-carbon feedstock for steelmakers transitioning away from traditional blast furnace methods. Consequently, the plant addresses a critical gap in the supply chain for manufacturers committed to reducing embedded carbon in their products.

The plant integrates hydrogen production at scale with a hydrogen-based direct reduction process. It will utilize an electrolyser with approximately 750 MW capacity, making it one of the largest in France. This scale of hydrogen generation marks a shift from pilot projects to commercial production infrastructure.

€2.2 billion investment creates new European industrial capacity

The facility occupies a 75-hectare site within the industrial-port zone of Fos-sur-Mer in southern France. The location provides direct access to maritime infrastructure essential for importing iron ore pellets and exporting finished products. This positioning enables competitive logistics for both raw material sourcing and customer delivery across Europe.

GravitHy’s investment totals €2.2 billion, creating up to 500 direct jobs and approximately 3,000 indirect positions. The economic impact extends beyond construction employment. The plant establishes a new industrial sector in a region seeking to transition traditional heavy industry toward lower-carbon alternatives.

The company secured €60 million in recent funding from investors including Japan Hydrogen Fund, Marcegaglia, Rio Tinto, Siemens Financial Services, and Ecolab. Existing backers Engie New Ventures and InnoEnergy also participated. This investor mix combines steel sector expertise, hydrogen technology specialists, and industrial services companies, reflecting the cross-sector nature of the project.

Founded in June 2022 as a Marseille-based startup, GravitHy expects to reach a final investment decision by 2026. Project execution would then begin in 2028, with operations commencing by the end of 2028 or 2029. This timeline positions the facility among the first wave of commercial-scale green hydrogen industrial applications in Europe.

Hydrogen-based process cuts emissions by up to 90 percent

Traditional iron production relies on carbon-based reducing agents, typically coal or natural gas. These methods generate substantial CO2 emissions as an inherent part of the chemical reduction process. By using hydrogen as the reducing agent instead, the plant can reduce carbon emissions by up to 90 percent compared to conventional methods.

The FEED phase will focus on balancing hydrogen generation, iron reduction operations, and power supply reliability. Maintaining operational flexibility presents a key engineering challenge. Hydrogen production and consumption must be synchronized while managing the intermittency of renewable energy sources that power the electrolyser.

The facility is designed as a first-of-its-kind industrial system demonstrating Europe’s capability to develop large-scale, energy-intensive low-carbon infrastructure. The engineering design must address the integration of three distinct but interdependent processes: electrolysis for hydrogen production, direct reduction of iron ore, and hot briquetting of the reduced iron product.

Direct Reduced Iron and Hot Briquetted Iron differ from pig iron produced in blast furnaces. DRI retains the solid state of iron ore throughout reduction, avoiding the energy-intensive melting stage. HBI is DRI compacted into briquettes for easier handling and transport. Both products are particularly suited for electric arc furnace steelmaking, which is becoming the preferred method for steelmakers reducing their carbon footprint.

European steelmakers transition toward electric arc furnace technology

The project responds to growing demand for low-carbon steel products among European steelmakers. Many are transitioning to electric arc furnace technology, which requires iron feedstock rather than iron ore. However, most existing DRI and HBI production uses natural gas as the reducing agent, still generating significant emissions.

Green hydrogen-based DRI and HBI enable steelmakers to reduce their Scope 3 emissions without requiring full investment in hydrogen-based direct reduction infrastructure themselves. This creates a new merchant market for low-carbon iron products. Steelmakers can purchase the feedstock and focus their capital investment on melting and forming operations.

For UK manufacturers purchasing steel, this matters in two ways. First, access to lower-carbon steel becomes more commercially viable as the supply base expands. Second, the embedded carbon in purchased steel components becomes easier to measure and reduce, supporting carbon reporting compliance requirements.

The facility strengthens European industrial sovereignty by reducing dependence on imported steel. Currently, Europe imports substantial quantities of steel and iron products from regions with higher carbon intensity. Domestic production of low-carbon iron feedstock supports the transition to cleaner steelmaking while maintaining manufacturing capacity within Europe.

GravitHy’s vision extends beyond this flagship facility. The company plans to build additional plants at other locations, establishing DRI and HBI as globally traded commodities with verified low-carbon credentials. This ambition suggests a future where carbon intensity becomes a key commercial differentiator in iron and steel markets.

Five key facts about the Fos-sur-Mer project

• The facility will produce 2 million tons per year of Direct Reduced Iron and Hot Briquetted Iron using green hydrogen instead of carbon-based reducing agents.
• Hatch will deliver the Front-End Engineering Design, balancing hydrogen generation, iron reduction operations, and power supply across the integrated industrial system.
• The €2.2 billion investment includes a 750 MW electrolyser, one of the largest in France, creating up to 500 direct jobs and approximately 3,000 indirect positions.
• GravitHy expects a final investment decision by 2026, with project execution beginning in 2028 and operations starting by the end of 2028 or 2029.
• The plant can reduce carbon emissions by up to 90 percent compared to conventional iron production methods while supplying low-carbon feedstock for electric arc furnace steelmaking.

Supply chain implications for UK businesses

The emergence of commercially viable green hydrogen iron production creates several considerations for UK businesses. Companies with steel in their supply chains should monitor the development of low-carbon feedstock sources. As European steelmakers transition to electric arc furnaces supplied with hydrogen-based DRI and HBI, the carbon intensity of purchased steel products will decrease.

This matters particularly for businesses subject to carbon reporting requirements or those bidding for public sector contracts. The ability to demonstrate lower embedded carbon in products becomes increasingly valuable. Procurement teams should engage with steel suppliers to understand their transition plans and access to low-carbon feedstock.

The scale of investment also signals growing commercial confidence in hydrogen-based industrial processes. While this specific project focuses on iron production, the underlying hydrogen infrastructure could support other industrial applications. UK businesses considering their own decarbonization pathways should watch how these early commercial-scale projects perform operationally and financially.

The timeline presents practical planning opportunities. With operations expected to commence between 2028 and 2029, businesses have several years to prepare for the availability of this feedstock. However, early engagement with the supply chain may secure preferential access or pricing. Manufacturing sectors with high steel intensity, including automotive, construction products, and machinery, should particularly monitor these developments.

GravitHy’s multi-site ambition suggests this is not an isolated development. The company views DRI and HBI as future globally traded commodities. If this vision materializes, businesses could eventually source low-carbon iron products from multiple suppliers across different regions, reducing both carbon intensity and supply chain concentration risk.

For businesses exploring net-zero programs, understanding Scope 3 emissions from purchased goods remains a persistent challenge. Steel and iron products often represent significant embedded carbon. As the market for verified low-carbon alternatives develops, procurement specifications can evolve to include carbon intensity requirements alongside traditional quality and cost criteria.

The project also demonstrates the level of capital investment required for industrial decarbonization. At €2.2 billion for a single facility, the financial scale exceeds what most individual steelmakers would commit to hydrogen-based production. This merchant model, where specialized producers supply multiple customers, may become the dominant approach for capital-intensive clean technologies.

Authoritative sources for further information

GravitHy provides updates on project development and technical details through their official website and announcements. The company’s investor materials offer insights into the commercial model and expansion plans beyond the initial Fos-sur-Mer facility.

The European Commission publishes guidance on industrial decarbonization and hydrogen strategy through its climate action and energy directorates. These resources explain how projects like this align with broader EU carbon neutrality commitments and the regulatory framework supporting low-carbon industrial development.

Industry bodies including the World Steel Association and the International Energy Agency track the transition to low-carbon steelmaking technologies. Their reports provide context on global trends in hydrogen-based iron production and the role of DRI and HBI in the evolving steel sector.

For UK businesses interested in how these European developments affect domestic supply chains, the Department for Energy Security and Net Zero offers guidance on industrial decarbonization and carbon reporting. Similarly, SBS Academy training covers practical approaches to measuring and reducing embedded carbon in purchased materials and products.