It did not begin as a search for technology. It began with reading the map. "The project was born out of Azerbaijan's need to take advantage of its strategic location —close to Europe, close to the Middle East— and energy resources to produce virgin metallics," explains Jorge Eugenio Martínez Miramontes, Commercial Director at Tenova HYL. "Given that strategic position, they began to explore the possibility of producing Hot Briquetted Iron, and at some point, they contacted us to understand the key features of our Zero Reformer (ZR) ENERGIRON DRI technology."

ENERGIRON, the DRI technology jointly developed with Danieli, was selected on two counts: process efficiency and carbon emissions. "Their need is to produce metallics efficiently—and to make them low-carbon Hot Briquetted Iron (HBI). The technology also has the flexibility to use different energy sources with that goal," says Martínez.

Led by Azerbaijan Metal Company (AzMC), the plant will have a capacity of 2.0 million tonnes per year and will rise in the Shamkir region, with commissioning expected at the end of 2029. The project will play a strategic role in developing Azerbaijan’s mining and metallurgical industry.

The facility will not feed a captive steel shop. Its output goes to the open market —and that is precisely where its contribution to the energy transition lies.

"The traditional route, with blast furnace and converter, emits double the emissions of the NG-based DRI/HBI-electric furnace route," says Martínez. "The new plant is defined as a merchant plant: the HBI produced will be sold and mainly transported to the Electric Arc Furnace (EAF) users that need Virgin Iron Units (VIU) to dilute the tramp elements contained in the scrap and produce high-purity steel for demanding applications traditionally produced via BF-BOF route with a carbon footprint more than twofold the one of the EAF route. HBI allows cutting the CO₂ generation for reasons that are simply chemical."

"Direct reduction uses methane as an energy source for reduction. Methane (CH₄) contains carbon and hydrogen. So, one part of the reduction is done with the carbon in the CH₄ in the form of Carbon Monoxide (CO), and the other part with the hydrogen (H₂)—compared with the traditional route, which uses coke, so it uses pure carbon. Therefore, direct reduction with carbon monoxide and hydrogen will emit both CO₂ and H₂O, while the traditional route emits mainly CO₂". The ENERGIRON technology features carbon capture, which will further reduce the plant’s carbon footprint and make available high-purity CO₂ to be potentially commercialized and used for other applications.

The Bankable Feasibility Study was completed in June 2026, with results presented at an event in Baku on June 4, clearing the way forward.

"We are currently developing the basic engineering for the plant, scheduled to be completed by the end of this year," says Martínez. "The next step will be the supply contract - the equipment supply, technical assistance, commissioning, plant start-up - to begin production at the end of 2029."

Asked about the difficulties of undertaking this size, his answer is disarmingly direct: "It is a plant capacity and configuration we know, a design we know." What sets this one apart is where it lands. "It will be the first direct reduction plant in the country, although we have had plants in other nearby areas." For Tenova, that is an opening: "This represents a great opportunity to establish ourselves as the preferred technology for the production of virgin metallics —to become the reference technology for HBI production in Central Asia."

Azerbaijan is not an isolated move. "As Tenova HYL, thanks to ENERGIRON technology, we have projects starting in various parts of the world," Martínez says. "We have several in the Middle East, mainly in Oman, and in the United States, with the recent contracts signed for Hyundai and for NEMO Industries. And we also have some in Europe. As a result of this boom in the DRI-HBI market, Tenova HYL has managed to position itself with its ENERGIRON technology and to differentiate itself from other available technologies."

That growth unfolds against a less enthusiastic backdrop: the decarbonization agenda has not reversed, but it has slowed. "Faced with the uncertainty of many things - geopolitics, certain environmental regulations that apply in different regions, CBAM and so on - our answer has always been the flexibility of the technology," he says. The logic is commercial as much as technical. "If we offer a technology that can use different energy sources, such as natural gas or hydrogen, we can address a market where low-carbon steel is seen as a premium product and therefore hydrogen-based direct reduction makes sense. Where that premium is not required, we address the market with a plant that runs on natural gas only but is hydrogen-ready. The same technology we offer in one case, we can offer in the other. But it is ready for it."

It is a pragmatic reading of the transition, and one that suits this case well: the emissions saved will be counted in mills thousands of kilometers away. That is how a country with no steelmaking tradition quietly becomes part of the energy transition's infrastructure.