Decarbonization of Heavy Industry: Challenges for thyssenkrupp and BASF – CHAR Technologies as a Solution Provider

thyssenkrupp Hits Technological Limits

thyssenkrupp is undergoing an operational realignment in the first quarter of fiscal year 2025/2026. Although the Group reported an increase in adjusted EBIT to EUR 211 million, the Steel Europe segment simultaneously posted an adjusted EBIT loss of EUR 187 million. The Group's order intake fell by 38% to EUR 7.7 billion. A core challenge for the steel division lies in the physics of blast furnace operations. The strategy calls for the construction of hydrogen-based plants for the production of sponge iron. In a traditional blast furnace, however, coke serves not only as a fuel but also performs a sort of supporting function for the ore and enables gas permeation. Hydrogen can be used in the chemical reduction process, but it lacks mechanical stability. Hydrogen injection rates are therefore technically limited. Without a solid, biogenic carbon substitute that replicates both the chemical and physical functions of coke, thyssenkrupp remains dependent on fossil coal.

BASF Pushes for a Circular Economy – With Scaling Challenges

With the ChemCycling project, BASF aims to convert plastic waste into pyrolysis oil through pyrolysis and use this as a raw material within its own production network. In the 2025 fiscal year, the chemical company reported a 2.8% decline in revenue to EUR 59.7 billion and EBITDA before special items of EUR 6.6 billion. One operational goal is to process 250,000 metric tons of recycled and waste-based raw materials annually in the plants starting in 2025. To achieve this volume, a decentralized infrastructure of pyrolysis plants is required, as transporting bulky plastic waste over long distances is uneconomical. The challenge lies in the fact that these decentralized plants must operate energy-autonomously so as not to lose the CO2 benefits through the use of external energy sources. Furthermore, the complex purification of pyrolysis oil to remove impurities remains a cost-intensive process that is currently still hindering the widespread adoption of BASF's technology in industry.

CHAR Technologies Provides the Solution for Heavy Industry

This is where an innovative Canadian company comes into play: CHAR Technologies positions itself as a developer and operator of plants that bridge this technological gap. The company uses a proprietary high-temperature pyrolysis process that operates at over 800 °C in an oxygen-free environment. This process converts organic waste such as wood residues into hydrogen-rich synthesis gas as well as CleanFyre biochar, which has a constant carbon content of over 85% and high mechanical strength. This biochar serves as a direct substitute for metallurgical coal. In January of this year, CHAR began the project phase at its Thorold production facility, which has a capacity of 5,000 tons of biochar per year. Concurrently, the company plans to build a plant with a capacity of 50,000 tons per year as part of the Espanola project. The strategic relevance of the technology is evident in ArcelorMittal's investment. In 2023, the steel group invested CAD 6.6 million for a 12.5% stake in CHAR Technologies to secure rights for trials at the Dofasco plant.

CHAR Technologies: Regulatory Pressure Creates Investment Opportunities

For investors, the focus is shifting from pure-play conglomerates to suppliers of critical raw and basic materials. The introduction of the European CBAM and EU emission allowance prices exceeding EUR 100/t make the use of biogenic carbon an economic necessity for producers in Europe. With its system, CHAR Technologies provides a plant that can operate energy self-sufficiently by using a portion of the produced synthesis gas to heat the reactor, thereby meeting the industry's requirements. In fiscal year 2025, CHAR improved its gross profit by 34.6% to over CAD 850,000 and recorded a profit from joint venture investments of CAD 4.1 million. Platforms such as Tradingview.com estimate the average price target for the stock at CAD 0.55, which, at the current level of around CAD 0.25, represents a theoretical doubling. The low market capitalization of around CAD 33 million does not reflect the company's potential. Investors will find here a stock that is likely to benefit from rising cost pressures related to CO2 emissions.