Germany’s Saarstahl and Dillinger secure €1.7 billion financing for Power4Steel green steel project
German long-steel producer Saarstahl and German plate producer Dillinger Group, both subsidiaries of Stahl-Holding-Saar (SHS), have announced that they have secured €1.7 billion in financing for their Power4Steel transformation program. The financing ensures full funding for the entire project, enabling SHS to advance large-scale hydrogen-based steelmaking and reach ambitious carbon-reduction milestones.
The Power4Steel initiative involves constructing a direct reduction (DRI) plant and two electric arc furnaces (EAFs) at SHS’s Dillingen and Völklingen sites. These facilities will replace existing blast furnaces and converters, marking SHS’s shift toward hydrogen-based low-carbon steel production.
The €1.7 billion package was arranged through a consortium of leading national and international banks.
It includes:
- export credit agency (ECA) support from OeKB (Austria) and SACE (Italy),
- equity contributions from SHS, and
- direct financial aid from the German federal government and the Saarland regional government under the €2.6 billion transformation program for the Saarland steel industry.
Key environmental targets as part of the Power4Steel project include:
- around 55 percent carbon emissions reduction by 2030,
- full climate neutrality by 2045.
Once operational, SHS aims to become the largest producer of green steel within its peer group, anchoring the Saarland’s transformation into a low-carbon industrial region.
German steel group receives permits for green steel production plants
German Stahl-Holding-Saar Group and its subsidiaries German steel plate producer Dillinger, long steel producer Saarstahl, and its subsidiary ROGESA have obtained federal permits for constructing a direct reduction plant and two electric arc furnace plants in Dillingen and Völklingen. The permits mark a major milestone in their transition to green steel production.
The direct reduction plant in Dillingen will supply both production sites with reduced iron pellets, while the electric arc furnaces will convert these pellets into CO2-reduced steel using scrap metal. The facilities are central components of the Power4Steel decarbonization project, making the companies the first German steelmakers to receive operating licenses for such equipment.
Stefan Rauber, CEO of Dillinger and Saarstahl, said the permits bring the company closer to achieving CO2 neutrality by 2045, with 70 percent of the production volume expected to be CO2-reduced by the early 2030s. The approval process benefited from early public engagement and cooperation with state authorities.
The Power4Steel project aims to establish climate-friendly steel production in Germany’s Saarland region through advanced environmental technologies.
