Steelmaker Salzgitter expects policymakers to help fund massive decarbonisation project
Clean Energy Wire
German steelmaker Salzgitter has expressed confidence that policymakers will provide the support necessary to realise a large-scale hydrogen project to decarbonise its steelworks, which are responsible for nearly one percent of the country’s total CO2 emissions. “Yes, that’s my expectation,” said company CEO Heinz Jörg Fuhrmann at the industry trade fair in Hanover. “Many success stories of the present received initial [government] funding – just think of Airbus. I would claim that we are the Airbus of steelmaking and therefore, I’m optimistic,” he added. “We have a very concrete proposal for policymakers […] this project is unique in the world.”
The Salzgitter steelworks currently emit around eight million tonnes of CO2 per year. The company has developed a “technically feasible but not economically viable” concept to replace the fossil fuels used in conventional steelmaking with a rising share of renewable hydrogen in order to reduce emissions, a project dubbed “SALCOS” (Salzgitter Low CO2 steelmaking). Fuhrmann said the project’s first phase, which would cut the company's carbon output by one quarter, could be implemented by 2025 at a cost of around 1.2 billion euros. But he added that Salzgitter needs more than just initial financing. He added lower electricity prices are also required, because otherwise the steel will be much more expensive to make.
Salzgitter said in March that it would build the world’s most powerful steam electrolysis plant, in cooperation with the start-up Sunfire, to generate hydrogen with renewable energy for use in the steelworks.
The steel industry is one of the world’s largest carbon emitters and accounts for around seven percent of global emissions. But decarbonising the sector has barely begun, and it remains one of the most difficult parts of the energy transition. The industry uses carbon to smelt iron ore, and in existing processes, CO2 emissions are unavoidable. At the Hanover fair, Swedish power company Vattenfall also presented plans to replace coking coal with fossil-free electricity and hydrogen in cooperation with Swedish steelmaker SSAB and ore miner LKAB.
