Sheet producer Dillinger Hütte and SBQ producer Saarstahl, both part of SHS, started planning earlier this year for the construction of a direct reduction plant and two electric arc furnaces at their sites in Dillingen and Völklingen. The companies already operate two blast furnaces and five basic oxygen converters.
The natural gas initially used in the new DRI plant will be phased out from the steelmaking processes. Ultimately, the new plant will operate predominantly using low-carbon and renewable hydrogen.
SHS plans to organise a competitive tender process to select renewable hydrogen suppliers. The Commission states that the successful bidders will install electrolysers in the vicinity of SHS's plants, thus initiating the development of a renewable hydrogen value chain in the Saarland region. At a later stage, SHS hopes to be connected to the German hydrogen network and thus gain access to hydrogen in larger and cheaper volumes.
The company aims to produce up to 3.5 million tonnes of green steel per year from 2027/2028. The public funding announced for the projected investments of around EUR 3.5 billion is very important, SHS said earlier this month.
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