Salzgitter AG’s project receives funding increase
Published by Willow Munz,
Editorial Assistant
Global Hydrogen Review,
Steel production in Lower Saxony contributes more than 10% to the state's greenhouse gas emissions, with almost 8 million tpy of CO2 emitted. Salzgitter AG's key future project, SALCOS (Salzgitter Low CO2 Steelmaking), aims to significantly reduce these emissions and make a substantial contribution to climate protection by producing nearly climate-neutral steel based on renewable electricity and hydrogen.
The German federal government and the state of Lower Saxony are increasing their funding for the first phase of the SALCOS project by approximately €322 million.
As early as October 2022, during the initial state aid approval process, it was determined that the funding gap, calculated taking into account Salzgitter AG's own contribution, exceeded the notified and approved aid of approximately €1 billion. At the time of approval for this first major primary steel project under the European IPCEI hydrogen programme, it was assumed that it could be combined with other instruments, but this proved unfeasible. The now-approved increase in funding, which falls within the funding gap identified in 2022, further secures the project's timely implementation. The European Commission granted state aid approval for the additional funds on6, February 2026. The federal government is contributing two-thirds of the funding for this climate-related transformation project of European significance, and the state of Lower Saxony one-third. Lower Saxony had already provided an additional €96 million through its state investment programme.
“With the now-approved increase to a total of approximately €1.322 billion, the green steel project is further secured. This is a positive and important signal for climate protection and the future development of our economy. Climate-friendly green steel has a future, with Salzgitter AG leading the way,” said Christian Meyer, Lower Saxony’s Energy Minister, who has visited the project site several times in recent years.
“The federal and state governments are now providing the necessary planning certainty for a future project that is central to our steel industry,” added Grant Hendrik Tonne, Lower Saxony’s Economics Minister. “This will strengthen our competitiveness on the global market, and we will continue to benefit from the industrial value creation – both here in Lower Saxony and nationwide.”
The SALCOS project is part of the IPCEI hydrogen initiatives. These initiatives support large scale, cross-value-chain projects involving both federal and state governments in the field of hydrogen technologies and systems. SALCOS is a comprehensive transformation programme for near-climate-neutral steel production. It relies on the direct reduction of iron ore using green hydrogen, which completely replaces the carbon used to date and reduces CO2 emissions by up to 95%. The first phase of development comprises a 100 MW electrolysis plant, a direct reduction plant, and an electric arc furnace, scheduled to go into operation from 2027. SALCOS pursues a Carbon Direct Avoidance strategy, meaning the direct avoidance of CO2 instead of its storage or utilisation. The project is considered a pioneer in industrial decarbonisation and a key component for the hydrogen rollout in Lower Saxony and Germany.
Read the article online at: https://www.globalhydrogenreview.com/hydrogen/24022026/salzgitter-ags-project-receives-funding-increase/
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