On Tuesday, the European Commission approved €2.6 billion in state aid to support Germany’s steel industry, partly so that it decarbonises its steel production processes with hydrogen.
“This is outstandingly good news for the industrial transformation in Saarland and throughout Germany,” Germany Economy Minister Robert Habeck said.
According to Germany’s economics ministry, “the companies [in question] want to save around four million tonnes of CO2 emissions per year in the medium term.”
It is planned to replace the existing blast furnaces and oxygen converters with a direct reduction plant and two new electric arc furnaces by 2027. By mainly using low-carbon and renewable hydrogen, the need for natural gas will gradually be phased out of the steel production processes.
“This news is groundbreaking for the Saarland steel industry. [… It] is a victory for climate protection,” said Stefan Rauber, chairman of the Management Board of one of the benefitting steel producers.
Three million tonnes of green steel will be produced annually using 120,000 tonnes of green hydrogen.
This is the third major state aid to fund the decarbonisation of a steel site in Germany as part of the IPCEI hydrogen project. A further project has yet to be approved by the European Commission.
To decarbonise the sector, it is gradually shifting from using fossil fuels to electricity produced from renewable hydrogen.
