(Berlin, Germany) – Salzgitter AG will receive an additional €322 million from the Federal Ministry for Economic Affairs and Energy (BMWi) to implement its project to produce steel using hydrogen. The European Commission has approved the supplementary funds under state aid rules, according to the BMWi.
Salzgitter AG wants to produce green hydrogen using green electricity as part of “Salcos”. This means that sponge iron is produced from iron ore in a direct reduction plant. This in turn produces raw steel in an electric arc furnace for further processing. © Salzgitter AG
The project, named "Salcos " (Salzgitter Low CO2 Steelmaking), had already received a grant of one billion euros in 2023 as an "Important Project of Common European Interest" (IPCEI). The financing is provided 70 percent by the federal government and 30 percent by the state of Lower Saxony.
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The goal is to convert the Salzgitter plant from the traditional blast furnace route to low-CO2 crude steel production in three stages. Three blast furnaces fired with coking coal will be replaced by a combination of direct reduction plants and electric arc furnaces, with increasing use of hydrogen. The hydrogen will be supplied, among other sources, via a specially constructed electrolyzer.
In February 2025, managers from Andritz and Salzgitter AG laid the foundation stone for one of Europe's largest green hydrogen production plants. © Salzgitter AG
A year ago, Salzgitter AG laid the foundation stone for "one of Europe's largest production plants" for green hydrogen ( as we reported ). According to a press release at the time, the Austrian machinery and plant manufacturer Andritz AG was responsible for supplying and installing the 100-megawatt electrolysis plant. The plant will utilize the pressure alkaline technology of the Norwegian manufacturer Hydrogen Pro ASA, in which Andritz has held a 13,8 percent stake since April 2024.
Salzgitter AG stated in response to an inquiry that it is currently "working intensively on the first phase of the Salcos expansion project." The allocation is an important contribution to its implementation. "We look forward to supplying our customers with the first green steel from the Salcos route as early as 2027," said CEO Gunnar Groebler. The funding represents "a clear commitment by the German government to long-term competitive steel production at the Salzgitter site."
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The steel group Salzgitter AG wants to only produce steel that is produced with low CO2050 emissions using green hydrogen by 2. © Salzgitter AG
