A good quarter of the entire site has been given over to the construction of sustainable production plants – an area equivalent to 210 football pitches. A direct reduction plant, an electric arc furnace and an electrolysis unit for the production of hydrogen are being built simultaneously. Salzgitter AG, Lower Saxony’s state government and Germany’s federal government are investing around 2.5 billion euros in this project. It is envisaged that CO2 -reduced steels will be available to customers from 2027 onwards.

Even though the topic of sustainability appears to have slipped out of the spotlight lately, experts largely agree that reducing greenhouse gases is a must. Carbon pricing and regulatory instruments are driving the transformation. The markets are slowly starting to gear themselves up for green steel.

THINGS ARE LOOKING GOOD FOR GREEN STEEL

Green steel grades are still more expensive than conventional steels at present. In the longer term, though, things are certainly looking good for green steel in market forecasts. Although some of these forecasts are still vague, high growth rates are definitely expected in the coming years. For example, consulting firm Deloitte is predicting a market share of approximately 20 percent for green steel in the EU by 2030, which corresponds to around 12 to 13 million metric tons per year. Key anchor sectors have already taken their first steps. Leading automotive manufacturers such as BMW, Mercedes-Benz, Volkswagen and Volvo have pronounced themselves in favour of using green steel in their vehicles and have signed relevant contracts and agreements with producers.

STAHLO – A MARKET ENABLER

However, simply switching primary production is no guarantee of market success. The right partners are needed if green steel grades are to be made accessible to a wide range of customer segments. Like Salzgitter AG, Stahlo has been quick to commit to green steel. “The family-owned Friedhelm Loh Group firmly believes in green steel and the approach Salzgitter AG is taking, and that’s why we have got involved with SALCOS®,” says Oliver Sonst, CEO of Stahlo.

The steel service centre has acted quickly to safeguard its ability to supply these steel grades by building up an international green steel network of plants. “We can meet any level of customer demand, whether this relates to physical green steel or use of a carbon accounting method,” he explains. “If customers are looking to get started with green steel right now, we can supply everything from the physical product to emissions information they can use in the context of Scope 3 reporting or CBAM regulations, for instance,” Sonst adds. Besides being a material supplier, Stahlo is therefore also providing information, ensuring planning certainty and building trust.

To make certain it can indeed supply green steel, the steel service centre needs dependable partners. “Salzgitter AG is an ideal partner for us. This company’s regional proximity, its clear commitment to the transformation and the imminent availability of CO₂ -reduced steel are all good reasons for our partnership,” emphasises Sonst.

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  3 QUESTIONS FOR

  GUNNAR GROEBLER
  CEO of Salzgitter AG

  “WE ARE ALREADY SEEING CONCRETE DEMAND FOR GREEN STEEL.”

  Mr. Groebler, what convinced Salzgitter AG to undertake the systematic transformation to green steel?

  Both the EU and Germany have set themselves ambitious climate targets. This means it will no longer be economically viable to continue producing grey steel in the medium term, and European steel producers will need to take prompt action to decarbonise their production processes due to the rising costs associated with CO2 . Our SALCOS® programme is looking at future technology requirements and making us a decarbonisation pioneer.

  What makes you confident that a viable market for CO2 reduced steel will emerge?

  We are already seeing concrete demand for green steel, as shown by volume commitment agreements between our company and many of our customers. For most customers, addressing steel consumption is the simplest way of making substantial CO 2 savings. During a transitional phase, however, political support will be required to help with the additional costs for the new plants that are already being commissioned and to ensure their competitiveness in the early years. This includes building up green lead markets and an efficient hydrogen infrastructure. Competitive energy prices and effective protection against unfair competition will be just as important.

  What role do partnerships play in the project’s economic success and scalability?

  It goes without saying that good partners are needed to implement SALCOS®. No company can tackle industrial decarbonisation alone, because this calls for systemic changes – from new infrastructure and technological breakthroughs to modified supply chains. Partnerships such as the one with Stahlo make it possible to pool different areas of expertise in this process and ensure coordinated development of the necessary ecosystems throughout the entire supply chain.