Salzgitter secures green hydrogen supply from EWE

European steelmaker Salzgitter will offtake 10,000 tonnes of green hydrogen per year from EWE’s 320MW plant in Emden for its Salcos direct reduced iron (DRI) project at its Flachstahl site in Germany.

Hydrogen will be delivered via Germany’s core pipeline network to Salzgitter Flachstahl, where it will be used in low-carbon steel production.

The seven-year agreement marks the first offtake agreement linked to the Emden facility, which is targeting start-up in 2027.

The volume is expected to cover around 6.5% of Salcos’s future annual hydrogen demand.  Salzgitter plans to produce an additional 9,000 tonnes per annum with an on-site , bringing its total secured supply to around 12% of requirements.

Hydrogen infrastructure build-out is already underway, with two Salzgitter subsidiaries to install 110km of pipes connecting the network to the facility.

Through the Salcos project, Salzgitter is targeting a 95% reduction in carbon dioxide emissions by 2033.

While announcing the offtake, the company also called for “additional inputs and efforts” to ramp up the hydrogen economy in Germany, saying that European guidelines on additionality and electricity procurement will be critical to the project’s delivery.

Gunnar Groebler, Chairman of the Executive Board of Salzgitter, appealed to policymakers, saying “comprehensive measures are still needed to close the cost gap and minimise business risks. Otherwise, this contract will remain an exception.”

Although green hydrogen for DRI could be a key decarbonisation solution, major players have backed away from plans to transition the process amid high costs.

ArcelorMittal, the world’s second-largest steelmaker, delayed final investment decisions on its decarbonisation projects, despite securing some €3.5bn ($4bn) in subsidies for its DRI installations.