Germany to support SHS’ hydrogen-driven steel production project

European Commission approves €2.6 billion for decarbonisation of steel production, contributing to the EU's green growth strategy.

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The European Commission has approved a €2.6bn ($2.8bn) German measure to support decarbonising steel production via hydrogen.

The measure will contribute to the achievement of the EU Hydrogen Strategy, the European Green Deal, the Green Deal Industrial Plan, and the REPowerEU Plan.

Supporting SHS Stahl-Holding-Saar GmbH & Co KGaA (SHS), the funding will be directed towards steel production in Völklingen and Dillingen, Saarland, where SHS operates two blast furnaces and five basic oxygen converters producing crude steel.

The grant will also fund the construction of a direct reduction plant and two new electric arc furnaces which will replace the existing blast furnaces and oxygen converters. Natural gas initially used in the steel production process will be gradually phased out and transitioned to hydrogen.

New steel production installations are expected to start operating in 2026, producing over three million tonnes of crude steel per year. Once completed, it is anticipated that the project will avoid the release of about 53 million tonnes of carbon dioxide over the project lifetime.

Germany selected the SHS project in the context of an open call to from an Important Projects of Common European Interest (IPCEI) on hydrogen technologies and systems. The Treaty on the Functioning of the European Union (TFEU) also enables Member States to support the development of certain economic activities, and the Guidelines on State aid for climate, environmental protection and energy 2022 (CEEAG).

The guidelines aid Member States in providing the necessary support to reach the Green Deal objectives in a targeted and cost-effective manner.
Source: https://www.h2-view.com/