Source: energate

Federal economics minister Robert Habeck (Greens), together with Lower Saxony's Minister President Stephan Weil (SPD - Social Democratic Party), handed over the notification for almost one billion euros for the so-called Salcos project to the group at the Hannover Messe. "I just walked in and the first person I met was the Minister President of Lower Saxony. And he said: 'Do you have the money with you?' Of course it's a nice reception here and yes, I have the money with me," said Habeck.

Steel production is extremely CO2-intensive

Salzgitter AG had already received the commitment for the subsidy, of which 300 million euros will come from the state of Lower Saxony, in  March. The money is to flow into the Salcos process ('Salzgitter Low CO2 Steelmaking'), in which the company is converting its extremely CO2-intensive steel production at the Salzgitter site to direct reduction and electric steel furnaces. According to the information, the Salzgitter plant currently causes 10 per cent of Lower Saxony's emissions and one per cent of Germany's CO2 emissions. This means that the company and the German steel industry in general face major challenges in climate protection, Habeck said. At the same time, the steel sector, as an important basic industry, plays a key role in industrial value chains, which is why the Ministry of Economics supports the transformation process.

Direct reduction first with natural gas, then with hydrogen

Greener steel production requires complex new plant technology and energy infrastructure. Instead of a blast furnace fired with coal, direct reduction plants will be used at Salzgitter AG in future. These will initially run on natural gas, later probably on hydrogen. The transmission system operator Gasunie is already planning a new gas pipeline for this. It will run from the existingnetwork to the plant from 2026. Until the connection to a supraregional hydrogen grid is in place, the steel producer wants to examine the options for hydrogen supply together with the Leipzig gas company VNG. This includes, for example, the supply via rail transport with hydrogen derivatives such as ammonia or methanol.

But it is not only the gas infrastructure around Salzgitter that has to be expanded for the project. Direct reduction will also consume enormous amounts of electricity in the future. A new 380 kV line will transport the additional electricity to southern Lower Saxony. In addition, the steelworks has already concluded a 15-year PPA withe the energy supplier EnBW for generation from 50 MW offshore plants. In addition to the hydrogen-capable direct reduction plant, the project, for which Salzgitter itself is spending two billion euros, also includes an electric arc furnace for the production of 1.9 million tonnes of crude steel and a 100-MW electrolyser.

The investment in green steel production is intended not only to secure the future of the site but also to keep numerous jobs in Germany in the long term, Habeck emphasised on the occasion of the handover of the funding.

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