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Green steel in Germany: Salzgitter AG defies Arcelor-Mittal's regression!
Salzgitter AG invests in green steel and implements strategic projects to reduce CO2, while ArcelorMittal is exiting.
Green steel in Germany: Salzgitter AG defies Arcelor-Mittal's regression!
Things are simmering tremendously in the German steel industry. While Salzgitter AG is working tirelessly on its green steel project, the world's largest steel producer ArcelorMittal has backed down. Again Weser courier reports, ArcelorMittal has stopped the transformation to low-CO2 production methods in Bremen and continues to rely on coal and coke instead. This decision is in stark contrast to the efforts of Salzgitter AG, which will soon be launching a direct reduction plant in Salzgitter.
The Salcos (Salzgitter Low CO2 Steelmaking) project is not only a beacon in green steel production, but also a sign that transformation is possible. Salzgitter is investing over two billion euros, receiving support of 700 million euros from the federal government and 300 million euros from Lower Saxony. The state of Lower Saxony also holds 26.1% of the shares in Salzgitter AG and therefore has influence on company policy. There is also political support for the expansion of renewable energies and hydrogen networks in Lower Saxony, even if the state funding is not used by ArcelorMittal.
Progress from other manufacturers
Like that too Daily Mirror highlights, three German competitors – Thyssenkrupp Steel, Salzgitter AG and Stahl-Holding-Saar (SHS) – are continuing their conversion to more climate-friendly steel production. Thyssenkrupp is planning to commission its direct reduction plant in Duisburg, even if it is currently operating at the limit of profitability. Salzgitter, in turn, is gradually replacing its three coal-fired blast furnaces by replacing them with more environmentally friendly alternatives.
SHS, which includes Dillinger Hüttenwerke and Saarstahl, among others, has also developed ambitious plans for CO2-reduced production. ArcelorMittal, on the other hand, remains resisting in Bremen and Eisenhüttenstadt, despite the opportunity to contribute 1.3 billion euros in funding to the changeover. A setback that is seen as a warning signal for the entire industry.
The challenges of transformation
But the challenges are just as great as the ambitions. According to a report by ZDF A lack of hydrogen infrastructure is hindering the production of green steel. Pipelines and electrolyzers are in short supply, slowing the planned transformation. In addition, companies like Thyssenkrupp expect additional annual costs of 300 to 400 million euros under the new conditions.
The discussion about Germany's future market position in global competition is intensifying. A functioning market for green steel becomes a prerequisite for competitiveness. The lack of binding purchase guarantees further complicates the situation. Andreas Löschel, an economic expert, is also skeptical and calls for clear political framework conditions to make these changes possible.
Political support is being called for from various sides and IG Metall also criticizes ArcelorMittal's withdrawal as short-sighted, with a crisis summit for the industry coming into play. The dream of green steel is fragile, but far from failed. However, Germany's path to sustainable steel production needs bold steps and political clarity now more than ever.