At the Hanover Trade Fair, Federal Minister of Economics and Technology Robert Habeck and Lower Saxony's Prime Minister Stephan Weil handed over a funding notification worth one billion euros to Gunnar Groebler, Chairman of the Executive Board of Salzgitter AG. The money will be used to support the SALCOS® - Salzgitter Low Carbon Steelmaking program, which aims to use hydrogen in steel production.
On September 15, 2022, the Federal Republic of Germany and the State of Lower Saxony announced their intention to jointly promote SALCOS® . Following approval by the EU Commission under state aid law, the final aid amount, the payment phases and the funding conditions are now available.
With the funding decision, SALCOS® will receive around €700 million in federal funding and €300 million in state funding in its first expansion phase. Together with Salzgitter AG's own funds of more than € 1 billion, which have already been released, the financing of the first expansion phase of SALCOS® is thus secured, according to the steel group. It is to be implemented by the end of 2025.
Hydrogen to be in use from 2025
The first stage, with a crude steel capacity of 1.9 million tons per year, is scheduled to go into operation as early as the end of 2025. A total of two direct reduction plants and three electric furnaces are to be built, successively replacing the three blast furnaces and converters.
This will replace steel production previously based on coking coal with a new hydrogen-based route. This is expected to save around 95% of the annual CO2 emissions of around 8 million tons. This could avoid around 1% of Germany's CO2 emissions.
Keeping Germany a steel location
Vice Chancellor and Federal Minister of Economics Robert Habeck:
"I am delighted to present Salzgitter AG with a funding decision worth around one billion euros. With its ambitious project, the company is demonstrating that it is possible with modern technology to decarbonize the steel sector as the largest industrial CO2 emitter.
At the same time, this can secure the future of Germany as a steel location and thus also numerous jobs in the long term. Salzgitter can now enter the implementation phase and realize this lighthouse project. This is a decisive step on the transformation path to green steel."
Gunnar Groebler, CEO of Salzgitter AG:
"We are already well underway with the implementation of green steel production since we made the investment decision last summer and are working flat out in Salzgitter to realize it. With the final decision, we now also have the politicians completely on board and the long-awaited security for the promotion of SALCOS®."
