The German government has allocated over €1.3 billion to support environmentally friendly steel production, particularly for the development of Salzgitter’s Salcos project, which involves the use of “green” hydrogen. The latest decision includes additional funding of €322 million, complementing the previous package of €1 billion allocated in 2022 under the European initiative for Important Projects of Common European Interest (IPCEI).
This is reported by Finway
Support for Germany’s Steel Industry
The Federal Ministry for Economic Affairs and Energy of Germany (BMWE) has officially confirmed the increase in funding after the European Commission approved additional funds for Salzgitter on February 6. This support is strategically important for the future of the domestic steel industry, providing financial security for the implementation of green technologies, enhancing competitiveness, and creating added value in the country’s economy.
“At the time of approval for this first major primary steel project using hydrogen under IPCEI, it was anticipated that the aid could be combined with other instruments, but this proved impossible. The now approved increase in funding further ensures the timely implementation of the initiative,” the ministry stated.
Development of Green Steel Production Technologies
The Salcos project is key to the decarbonization of the steel sector and involves a gradual transition from traditional blast furnace technology to direct reduction using hydrogen in combination with an electric arc furnace. This solution will significantly reduce carbon emissions and implement modern environmental standards in steel production.
State aid for the implementation of the project was finally approved in October 2022, and the national decision to support it was made in April 2023. The funding is provided by the federal budget (70%) and the government of Lower Saxony (30%). This ensures the project has the necessary financial resources to implement innovative technologies and enhance the environmental safety of production.