The European Commission has approved a substantial €2.6 billion funding to assist Germany in decarbonizing its struggling steel industry through the use of hydrogen. This financial support will be directed towards the steel industry company SHS in Saarland, Germany, to facilitate the transition of the region’s steel production to a more environmentally friendly process.
The allocated funds will be used for steel production in Völklingen and Dillingen in Saarland and will also contribute to the construction of a direct reduction plant and two new electric arc furnaces. These new installations will replace the existing blast furnaces and oxygen converters, with the initial natural gas used in the steel production process being phased out in favor of hydrogen. The new facilities are expected to commence operations in 2026, with an annual production capacity of around 3 million tons of crude steel.
Once completed, the project is anticipated to reduce carbon dioxide emissions by approximately 53 million tons over its lifecycle. This initiative aligns with the EU’s hydrogen strategy, the European Green Deal, the Green Deal Industrial Plan, and the REPowerEU plan, contributing significantly to the region’s efforts to achieve a more sustainable and low-carbon industrial sector.
