Salzgitter Gets Around $1 Billion in German Aid for Decarbonization

By Pierre Bertrand

Salzgitter AG on Tuesday said that it received almost a billion euros ($1.09 billion) in government aid for its low-carbon, hydrogen-based steel production project.

The funding from the German government, to which the state of Lower Saxony contributed 30%, will go toward the company's Salcos project, the federal government said in a statement.

The assistance assures the financing for the first stage of the project which is scheduled to be operational by the end of 2025, Salzgitter said in a statement.

Salcos involves the construction of hydrogen-capable direct reduction plant, an electric arc furnace and a 100-megawatt electrolyzer plant for the production of 1.9 million tons of crude steel, Salzgitter said.

Salzgitter will advance its Salcos project in two more stages and intends, by 2033, to have built two direct-reduction plants and three electric arc furnaces to replace its previous production process based on coking coal.

The government aid adds to the more than EUR1 billion the company had already earmarked for the project, the company said.

Last month Salzgitter increased its anticipated budget for the first phase of the Salcos project to between EUR2.2 billion and EUR2.4 billion, up from between EUR1.5 billion and EUR2 billion.

Write to Pierre Bertrand at [e-mail]

(END) Dow Jones Newswires

April 18, 2023 10:51 ET (14:51 GMT)

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