The project, valued at a total of 2.5 billion EUR(approximately 2.9 billion USD) and supported by a 1 billion EUR government grant, aims to transform the steel production process by using green hydrogen to reduce carbon emissions. The currently ongoing first phase includes a 100-megawatt electrolyzer capacity, a direct reduction plant, and an electric arc furnace. With this phase expected to become operational in 2027, the goal is to reduce CO₂ emissions from steel production by approximately 30%, or 2 million tons.
However, the next phases, which are planned to reduce emissions from steel production—one of the most carbon-intensive industrial processes—by up to 95%, will be delayed. The company plans to revisit investment decisions for the second expansion phase in 2028 or 2029, instead of the initially planned 2026 timeline.
Salzgitter AG CEO Gunnar Groebler stated, “The economic environment is not ready yet. Hydrogen markets are developing more slowly than expected, and the promised regulatory changes are still lacking.”
This delay will free up around 1 billion EUR in capital expenditure, providing short-term financial relief. However, it also raises concerns about Germany’s ability to meet its ambitious climate targets.
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