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Investment of EUR 3.5 billion to transform the steel industry in the Saarland

by David Fleschen

The Supervisory Boards of SHS – Stahl-Holding-Saar, Saarstahl AG and Aktien-Gesellschaft der Dillinger Hüttenwerke (Dillinger), the Board of Trustees of Montan-Stiftung-Saar, and the Board of Management of SHS – Stahl-Holding-Saar have jointly resolved to invest EUR 3.5 billion – subject to the approval of public funds – to transform the steel industry in the Saarland and enable production of green steel. The decision by the Supervisory Boards enables the decarbonization of Saarland’s steel industry. Starting as early as 2027, up to 3.5 million tons of low-carbon steel will be produced annually in Saarland and carbon emissions will be cut by 4.9 million tons.

This decision bolsters the pioneering role of Saarland’s steel industry in switching production to “green” steel. It is the declared goal of SHS to become the European model for industrial carbon reduction. For this project, Montan-Stiftung-Saar trust and SHS – Stahl-Holding-Saar are relying on public funding, as the planned investment of EUR 3.5 billion poses significant challenges for Saarland’s steel industry. The necessary documents have been submitted, but the approval process has not yet been completed. With their decision to grant the official signal to proceed, the Supervisory Boards have now made it possible to nonetheless achieve the EU climate targets for 2030 (carbon emissions at least 55 percent below 1990 levels).

Over the next few years leading up to 2027, in addition to the established blast furnace route, the new production line with an electric arc furnace (EAF) will be built at the Völklingen site and an EAF and direct reduced iron (DRI) plant for the production of sponge iron will be built at the Dillinger plant site. Transformation branding has also been developed to visually represent the transformation: “Pure Steel +”. The message of "Pure Steel +” is that Saarland’s steel industry will retain its long-established global product quality, ability to innovate, and culture, even in the transformation. The “+” refers to the carbon-neutrality of the products.

The availability of green hydrogen at competitive prices is a basic precondition for this ambitious project to succeed, along with prompt funding commitments from Berlin and Brussels. Local production of hydrogen will therefore be established as a first step together with the local energy suppliers, before connecting to the European hydrogen network to enable use of hydrogen to be increased to approx. 80 percent. The Saarland steel industry is thus laying the foundation for a new hydrogen-based value chain in the Saarland, in addition to decarbonizing its own production. In this way, SHS – Stahl-Holding-Saar is supporting Saarland on its path to becoming a model region for transformation.

Source: Saarstahl, Photo: Fotolia

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