Andritz to supply 100-MW electrolysis plant for Salzgitter green steel in Germany

Germany’s Salzgitter has ordered a 100-MW electrolysis plant from Andritz to produce green hydrogen, replacing coal in the steel production process at the company’s Salzgitter Flachstahl from 2026, the companies said in statements Sept. 20.

The plant will produce around 9,000 mt/year of hydrogen, with HydrogenPro supplying the high-pressure alkaline electrolyzers, using its 5.5-MW cell stacks, it said in a separate statement.

“This order represents a major milestone for our partnership with ANDRITZ, and the first step in our European expansion,” HydrogenPro CEO Jarle Dragvik said in the statement.

The project is part of Salzgitter’s Salcos program, which it will develop in three stages.

In a first phase from 2026, Salzgitter will commission a direct reduction plant, an electric arc furnace, and the 100-MW electrolysis plant.

The DRI unit will have a production capacity of over 2 million mt/year of direct reduced iron, while the EAF will produce 1.9 million mt/year of steel, according to Salzgitter Flachstahl and engineering company Primetal, which will build the EAF.

It aims to convert its operations to “virtually CO2-free steel production” by the end of 2033.

The first stage of Salcos is backed by subsidies from Germany’s federal government and the state of Lower Saxony, as well as by the company’s own funds.

Salzgitter Flachstahl Chairman Ulrich Grethe said the development of hydrogen infrastructure in Germany was key to unlocking industrial decarbonization.

“In order to enable us to reduce the CO2 footprint of our steel production in the future, it is imperative that we connect to the emerging hydrogen infrastructure as quickly as possible,” Grethe said in the statement.

German gas transmission system operators in July published a draft hydrogen pipeline network map, linking hydrogen production and demand centers, storage facilities, power plants and import corridors across the country.

The proposed network is made up of converted existing natural gas pipelines, along with newly constructed dedicated hydrogen pipes.

The core network will include key infrastructure expected to be operational by 2032, with scope to expand the network further in later stages.

Germany is targeting domestic renewable hydrogen production capacity of 10 GW by 2030, and is also eyeing large-scale imports through schemes such as H2Global.

Platts, part of S&P Global Commodity Insights, assessed the cost of producing renewable hydrogen via alkaline electrolysis in Europe at Eur6.15/kg ($6.58/kg) Sept. 19 (Netherlands, including capex), based on month-ahead power prices. Proton exchange membrane electrolysis production was assessed at Eur7.23/kg.

Author: James Burgess


Salzgitter partners with freight carrier HGK to develop inland shipping for steelmaking needs

HGK Shipping and German steelmaker Salzgitter AG plan to enhance their cooperation and jointly promote and develop sustainable logistics concepts for inland waterways, Salzgitter said Aug. 15.

With Salzgitter’s reliance on inland waterways set to increase as the transition to low-carbon steelmaking progresses, the German steel company will enhance its partnership with HGK Shipping, Europe’s leading inland waterway shipping company, to ramp up its inland cargo shipping volumes to above 1 million mt/year.

HGK Shipping, like Salzgitter native to Lower Saxony, has a fleet of 350 company and chartered vessels and transports 43 million mt/year of freight.

Two subsidiaries of Salzgitter — steel coil manufacturer Salzgitter Flachstahl and distribution company DEUMU-Deutsche Erz- und Metall-Union — have signed memorandums of understanding with HGK Shipping outlining their commitment to developing and establishing low-emission logistics chains as a norm.

Both subsidiaries are aiming to make much greater use of inland waterway shipping in particular, and their co-operation with HGK will focus on setting up paired transport operations.

The aim is to prevent empty runs through generating return loads and optimizing the use of available shipping space by combining transport operations, for instance.

Salzgitter Flachstahl specializes in making flat steel products for vehicle and pipe manufacturers and construction, and DEUMU recycles scrap steel, metals and alloys and acts as a trader for them.

The two are connected to the inland waterway system at numerous sites, with the result being over 1 million mt/year of the Salzgitter group’s steel is transported via European waterways. The steel company believes in it can grow these shipping operations further if the right conditions are in place.

In May, Salzgitter contracted a consortium comprising Tenova, Danieli and DSD Steel Group to build a 2 million mt/year direct reduction plant at Flachstahl, which takes it a step closer to low-CO2 steelmaking.

The first stage of the Salzgitter Low CO2 Steel, or SALCOS, project will go into operation in late 2025 and consist of the direct reduction plant, an electric arc furnace and a 100-MW electrolysis plant for hydrogen production.

With the EAF up and running, the currently blast furnace-based Flachstahl will convert into a mill smelting direct reduced iron, but also steel scrap, hence why it is looking to develop logistics for shipping in significant scrap volumes.

“One key element [of SALCOS as a circular economy project] will involve using scrap to obtain crude steel [and] … having sustainable logistics operations for this very important secondary raw material,” DEUMU Managing Director Sandrina Sieverdingbeck said in a statement Aug. 15.

Author Katya Bouckley

Salzgitter expects safeguard non-renewal, Section 232 reapplication risk

Salzgitter says the extension of EU safeguard measures beyond their current, end-June 2024 expiration deadline is unlikely.

“It will then be possible to import steel products into the EU market from July 1, 2024 onward without any restrictions by tariff quotas, which will likely drive up import volumes,” the steelmaker said in last week’s second-quarter earnings report.

EU steelmakers have in recent months voiced fears over the potential expiration of safeguard measures in mid-2024, with the EU’s Carbon Border Adjustment Mechanism (CBAM) due to come into full force only on 1 January 2026. This would leave an 18-month gap that would see the EU’s market unprotected, Kallanish notes.

According to WTO rules. safeguard measures can be implemented for a maximum of eight years and then must be rescinded for the same duration as they were applied before they can be re-applied.

Their renewal is likely to depend much on whether the EU and US can agree a steel trade pact, the Global Sustainable Steel Agreement (GSSA), which is currently under negotiation. If no deal is agreed by the October deadline, the US could reapply Section 232 duties on EU steel. “The various negotiation positions are currently still very far apart, which makes arriving at a consensus by October 2023 difficult. The loss of preferential market access to the US would considerably hamper exports again,” Salzgitter says.

As for the EU’s sanctions on Russian steel, importing steel products of Russian origin processed in non-EU countries will be prohibited as from October 2023; importing semi-finished products will no longer be possible starting with October 2024.

“Risks arise from the new sanctions to the extent that the long transition periods through to autumn 2024 continue to facilitate Russian steel imports that are frequently offered at prices significantly below the customary market price level. Owing to the complexity of the directive and the difficulty in its implementation, this risk continues to prevail and may lead to distortions in the market on the back of low prices for Russian steel products,” Salzgitter observes.

The German steelmaker saw shipments drop 3% on-year in the second quarter to 1.32 million tonnes.

Adam Smith Poland