Germany offers €2.6 billion for Saarland green steelmaking

German economy minister Robert Habeck announced planned funding this week to the tune of €2.6 billion ($2.8 billion) for the conversion of steel mills in Saarland state towards zero-emission steelmaking.

During a visit to the state, Habeck made the pledge in the presence of state minister president Anke Rehlinger and mill representatives. The grant would be bestowed to the state’s three main operations – plate maker Dillinger Hütte, SBQ maker Saarstahl, and their joint pig iron plant Rogesa. All three operations are encompassed under the roof of Staar-Holding Saar (SHS). The minister’s pledge will still be subject to approval by EU competition authorities, Kallanish understands.

“This is momentous news for Saarland’s steel industry. It enables us to make a historic transition in production,” says Stefan Rauber, chairman of SHS as well as chief executive of Dillinger and Saarstahl.

The transformation project is aiming for climate neutrality by 2045. To achieve this, Dillinger and Saarstahl are focused on the use of hydrogen, on electric steel production and on recycling steel scrap. Taking the funding conditions into account, planning began this year for construction of a direct reduction plant and two electric arc furnaces at the mills’ sites in Dillingen and Völklingen.

The group targets production of up to 3.5 million tonnes/year of green steel starting in 2027/2028. The public funding that has now been announced is essential for the projected investments of around €3.5 billion, SHS says.

Christian Koehl Germany