German energy company EWE and Salzgitter Flachstahl GmbH, a subsidiary of German steelmaker Salzgitter AG, announced the signing of a long-term agreement covering the annual supply of 10,000 tons of green hydrogen, which marks a significant step forward for both the German hydrogen economy and the decarbonization of steel production.
The agreement represents represents the first major contract for the supply of hydrogen produced at the EWE 320 plant. The MW electrolysis plant in Emden, which is currently under construction. This is also Salzgitter AG's first large-scale external hydrogen procurement agreement.
Hydrogen supplies are scheduled to begin in 2030 through Germany's core hydrogen network and will continue over an initial seven-year contract period.
Hydrogen to support the transition of low-carbon steel production SALCOS®
Green hydrogen will play a key role at Salzgitter AG The SALCOS® (Salzgitter Low CO₂ Steelmaking) program aims to replace traditional blast furnace steelmaking with low-carbon direct reduction technology. According to the companies, the contracted volume will cover approximately 6.5 percent of the hydrogen demand required for the SALCOS® project.
The transformation strategy is designed to significantly reduce carbon emissions from steel production. The Salzgitter direct reduction plant can already reduce carbon dioxide emissions by about 60 percent by running on natural gas instead of coal and coke. The company's long-term goal is to transition to 100% green hydrogen-based steel production, where water becomes the main by-product instead of carbon dioxide.
Salzgitter estimates that its fully developed SALCOS® direct reduction plant will require up to 150,000 tons of hydrogen per year. To partially meet this demand, the company plans to produce about 9,000 tons of green hydrogen per year using a 100 MW electrolyser currently planned to be installed at its steel plant. However, the majority of future hydrogen demand will need to be met from external suppliers.
Regulatory framework remains a key challenge
Despite the growing momentum for hydrogen investment, both companies stressed that project economics remain heavily dependent on regulatory conditions. Particular concern was expressed regarding the certification system
